Exhibit 4.12
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CAPITAL SECURITIES GUARANTEE AGREEMENT
Between
AON CORPORATION
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
May 20, 1997
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CROSS-REFERENCE TABLE*
Section of Trust Section of Capital Securities
Indenture Act of 1939, as amended Guarantee Agreement
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310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1(c)
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.4
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
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* This Cross-Reference Table does not constitute part of the Capital
Securities Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS....................................................... 2
SECTION 1.1. Definitions........................................ 2
ARTICLE II. TRUST INDENTURE ACT.............................................. 4
SECTION 2.1. Trust Indenture Act; Application................... 4
SECTION 2.2. List of Holders.................................... 4
SECTION 2.3. Reports by the Guarantee Trustee................... 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee.......... 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent... 5
SECTION 2.6. Events of Default; Waiver.......................... 5
SECTION 2.7. Event of Default; Notice........................... 5
SECTION 2.8. Conflicting Interests.............................. 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............. 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee......... 6
SECTION 3.2. Certain Rights of Guarantee Trustee................ 7
SECTION 3.3. Compensation....................................... 9
SECTION 3.4. Indemnity.......................................... 9
ARTICLE IV. GUARANTEE TRUSTEE................................................ 9
SECTION 4.1. Guarantee Trustee: Eligibility.................... 9
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee..................................10
ARTICLE V. GUARANTEE.........................................................11
SECTION 5.1. Guarantee..........................................11
SECTION 5.2. Waiver of Notice and Demand........................11
SECTION 5.3. Obligations Not Affected...........................11
SECTION 5.4. Rights of Holders..................................12
SECTION 5.5. Guarantee of Payment...............................12
SECTION 5.6. Subrogation........................................12
SECTION 5.7. Independent Obligations............................13
SECTION 5.8. Merger or Consolidation of Guarantor...............13
ARTICLE VI. SUBORDINATION....................................................13
SECTION 6.1. Subordination......................................13
SECTION 6.2. Pari Passu to Similar Guarantees...................14
ARTICLE VII. TERMINATION.....................................................14
SECTION 7.1. Termination........................................14
SECTION 7.2. Termination of Old Guarantee.......................14
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ARTICLE VIII. MISCELLANEOUS................................................. 14
SECTION 8.1. Successors and Assigns............................ 14
SECTION 8.2. Amendments........................................ 14
SECTION 8.3. Notices........................................... 15
SECTION 8.4. Benefit........................................... 16
SECTION 8.5. Interpretation.................................... 16
SECTION 8.6. Governing Law..................................... 16
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CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of May 20, 1997
(the "Guarantee Agreement"), is executed and delivered by Aon Corporation, a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Aon Capital A, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, the Administrative Trustees named therein and the holders,
from time to time, of undivided beneficial interests in the assets of the
Issuer, the Issuer issued $800,000,000 aggregate Liquidation Amount (as defined
in the Trust Agreement) of its 8.205% Capital Securities, Liquidation Amount
$1,000 per Capital Security (the "Old Capital Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the proceeds from the issuance of the Old Capital Securities,
together with the proceeds from the issuance of the Issuer's Common Securities
(as defined in Section 1.1), were used to purchase the Debentures (as defined in
the Trust Agreement) of the Guarantor which were deposited with The Bank of New
York, as Property Trustee, under the Trust Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Old Capital
Securities, the Guarantor irrevocably and unconditionally agreed, to the extent
set forth in that certain Capital Securities Guarantee Agreement dated as of
January 13, 1997 (the "Old Guarantee Agreement") between the Guarantor and the
Guarantee Trustee, for the benefit of the Holders of the Old Capital Securities,
to pay to the Holders of the Old Capital Securities the Guarantee Payments (as
defined therein) (the "Old Guarantee") and to make certain other payments on the
terms and conditions set forth therein;
WHEREAS, pursuant to that certain Guarantee Exchange and Registration
Rights Agreement, dated as of January 13, 1997 (the "Guarantee Exchange and
Registration Rights Agreement"), among the Guarantor, the Issuer and certain
Purchasers named therein, the Guarantor and the Issuer agreed that if the
Guarantor and the Issuer file a registration statement (the "Registration
Statement") to exchange the Old Capital Securities for a like aggregate
Liquidation Amount of new 8.205% Capital Securities, Liquidation Amount $1,000
per Capital Security (the "New Capital Securities" and, together with the Old
Capital Securities, the "Capital Securities"), then the Guarantor and the Issuer
will simultaneously include in the Registration Statement an offer to exchange
the Old Guarantee for the Guarantee (as defined herein) for the benefit of the
Holders of the Capital Securities;
WHEREAS, on March 28, 1997, the Registration Statement was declared
effective under the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Guarantee Exchange and Registration Rights
Agreement, the Guarantor and the Issuer wish to exchange the Old Guarantee for
the Guarantee;
WHEREAS, the Guarantee is substantially identical to the Old Guarantee
except that the Guarantee is registered under the Securities Act pursuant to the
Registration Statement and the Guarantee will not contain provisions restricting
transfer in the absence of registration under the Securities Act; and
WHEREAS, as required by the Guarantee Exchange Registration Rights
Agreement, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments (as defined in Section 1.1) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, as required by the Guarantee Exchange Registration
Rights Agreement, the Guarantor executes and delivers this Capital Securities
Guarantee Agreement and pursuant to Section 5.1 hereof extends the Guarantee for
the benefit of the Holders from time to time of the Capital Securities.
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Board of Directors" means either the board of directors of the
Guarantor or any committee of that board duly authorized to act hereunder.
"Capital Securities" has the meaning set forth in the preamble to
this Guarantee Agreement.
"Common Securities" means the 8.205% Common Securities (Liquidation
Amount $1,000 per Common Security) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
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"Guarantee" has the meaning set forth in Section 5.1.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accrued and
unpaid Distributions to but excluding the date of redemption (the "Redemption
Price") with respect to any Capital Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, dissolution,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000
per Capital Security plus accumulated and unpaid Distributions on the Capital
Securities to but excluding the date of payment, to the extent the Issuer shall
have funds on hand available therefor at such time, and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of January 13, 1997 between
the Guarantor and The Bank of New York, as trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as may be further
supplemented or amended from time to time.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, any Vice Chairman of the Board,
the Chief Executive Officer, the President, any Vice Chairman or any Vice
President (whether or not designated by a number or a word or words added before
or after the title Vice President), and by the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Assistant Treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Guarantee Trustee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, not more than five days after January 15 and
July 15 of each year, beginning with July 15, 1997, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
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addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (ii) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with the obligations imposed
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act as if it were subject to the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders
such documents, reports and information, if any, as required by Section 314(a)
of the Trust Indenture Act and the compliance certificate required by Section
314 of the Trust Indenture Act, in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may
be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first-class postage prepaid, to the
Holders, notices of all Events of Default
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known to the Guarantee Trustee, unless such defaults have been cured or waived
before the giving of such notice, provided that, except in the case of a default
in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected
in withholding such notice if and so long as the Board of Directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except to a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting in the Successor Guarantee Trustee and cessation of right, title
and interest with respect to the Guarantee Trustee shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
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(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act (were it
applicable hereto) are specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it under the terms of this Guarantee Agreement.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
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(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, bond, debenture, note, other evidence
of indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have offered
to the Guarantee Trustee such adequate security or indemnity against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided that nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it
by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or
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attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it hereunder;
provided, however, that the Guarantee Trustee shall be responsible for its
own negligence with respect to the selection of any such agent or attorney
appointed by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, liability, damage, claim or expense
incurred without negligence or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
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ARTICLE IV.
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or the requirements of its
supervising or examining authority, then, for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an
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instrument of resignation, the resigning Guarantee Trustee may petition, at the
expense of the Guarantor, any court of competent jurisdiction for appointment of
a Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert other than
the defense of payment (the "Guarantee"). The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Capital Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Capital Securities;
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(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) to the fullest extent permitted by law, any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a proceeding against the
Guarantee Trustee, the Issuer or any other Person. The Guarantor waives any
right to require that any action be brought first against the Issuer or any
other Person or entity before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Issuer)
or upon distribution of Debentures to Holders as provided in the Trust
Agreement.
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SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive of Section 5.3 hereof.
SECTION 5.8. Merger or Consolidation of Guarantor.
The Guarantor covenants that it will not consolidate with or merge
into any other Person, or transfer, convey or lease all or substantially all of
its assets or properties to any other Person, and no other Person shall
consolidate with or merge into the Guarantor, or transfer, convey or lease all
or substantially all of its assets to the Guarantor, unless (i) either the
Guarantor shall be the continuing corporation, or the successor shall be a
Person organized and existing under the laws of the United States of America or
a State thereof or the District of Columbia and such successor shall expressly
assume the Guarantor's obligations under this Guarantee Agreement by written
instrument satisfactory to the Trustee, executed and delivered to the Trustee by
such successor, (ii) immediately after such merger or consolidation, or such
transfer, conveyance or lease, no Event of Default hereunder, and no event
which, after notice or lapse of time or both would become an Event of Default,
shall have happened and be continuing, and (iii) such consolidation, merger,
transfer, conveyance or lease is permitted under the Trust Agreement and
Indenture and does not give rise to any breach or violation of the Trust
Agreement or Indenture.
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Subordination
The obligations of the Guarantor under this Guarantee Agreement
constitute unsecured obligations of the Guarantor and rank subordinate and
junior in right of payment to all other liabilities of the Guarantor (including
obligations under the Debentures) except (a) those liabilities which expressly
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by their terms are made pari passu or subordinate to the obligations of the
Guarantor under this Guarantee Agreement and (b) liabilities arising under
similar guarantee agreements as described in Section 6.2 hereof.
SECTION 6.2. Pari Passu to Similar Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred securities or capital securities issued by any Aon Trust (as defined
in the Indenture).
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon the earliest of (i) full payment of the Redemption Price of all
Capital Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Capital Securities or this
Guarantee Agreement. Sections 3.3 and 3.4 shall survive the termination of the
Guarantee Agreement.
SECTION 7.2. Termination of Old Guarantee.
The Old Guarantee Agreement is hereby terminated and shall have no
further force and effect except insofar as required by Section 7.1 therein.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Section 5.8 of this
Guarantee Agreement, the Guarantor shall not assign its obligations hereunder.
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SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of all the outstanding Capital Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and personally delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders:
Aon Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
(b) If given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
Aon Capital A
c/o Aon Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
with a copy to:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
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All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or three days after being mailed
by first class mail, postage prepaid.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise specified;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Senior Investment Officer
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President and Controller
THE BANK OF NEW YORK
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By: /s/ Xxxx Xx Xxxxxx
------------------------------------
Name: Xxxx Xx Xxxxxx
Title: Assistant Vice President
