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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	

For the quarterly period ended September 30, 2002	

OR	

o	
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	

Commission file number 1-7933	

Aon Corporation
 (Exact Name of Registrant as Specified in its Charter)

DELAWARE 
(State or Other Jurisdiction of
Incorporation or Organization)	 	36-3051915 
(IRS Employer
Identification No.)	

200 E. RANDOLPH STREET, CHICAGO, ILLINOIS 
(Address of Principal Executive Offices)	
 	
60601 
(Zip Code)	

(312) 381-1000 
(Registrant's Telephone Number)	

        Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes /x/        No / /
        Number of shares of common stock outstanding:

Class
	 	No. Outstanding
as of 9-30-02

$1.00 par value Common	
 	
272,965,071	

 PART I

FINANCIAL INFORMATION
Item 1.    Financial Statements

 Aon CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(millions)
	 	As of
Sept. 30, 2002
	 	As of
Dec. 31, 2001
	 	
 	 	(Unaudited)
	 	 	 	
Assets	 	 	 	 	 	 	 	
Investments	 	 	 	 	 	 	 	
 	Fixed maturities at fair value	 	$	1,941	 	$	2,149	 	
 	Equity securities at fair value	 	 	147	 	 	382	 	
 	Short-term investments	 	 	3,594	 	 	2,975	 	
 	Other investments	 	 	584	 	 	640	 	
 	 		 		 	
 	 	Total investments	 	 	6,266	 	 	6,146	 	

Cash	

927	

439	

Receivables	

 	

 	
 	
 	Insurance brokerage and consulting services	 	 	7,905	 	 	7,033	 	
 	Other receivables	 	 	979	 	 	863	 	
 	 		 		 	
 	 	Total receivables	 	 	8,884	 	 	7,896	 	

Goodwill (net of accumulated amortization: 2002—$698; 2001—$698)	

3,998	

3,842	

Other intangible assets (net of accumulated amortization: 2002—$748; 2001—$710)	

204	

242	

Other assets	

4,044	

3,765	

Total Assets	 	$	24,323	 	$	22,330	 	

Liabilities and Stockholders' Equity	

 	

 	

Insurance Premiums Payable	
 	
$	
9,648	
 	
$	
8,233	

Policy Liabilities	

 	

 	
 	
 	Future policy benefits	 	 	1,292	 	 	1,266	 	
 	Policy and contract claims	 	 	1,156	 	 	937	 	
 	Unearned and advance premiums and contract fees	 	 	2,340	 	 	1,974	 	
 	Other policyholder funds	 	 	263	 	 	813	 	
 	 		 		 	
 	 	Total policy liabilities	 	 	5,051	 	 	4,990	 	

General Liabilities	

 	

 	
 	
 	General expenses	 	 	1,693	 	 	1,770	 	
 	Short-term borrowings	 	 	320	 	 	257	 	
 	Notes payable	 	 	1,862	 	 	1,694	 	
 	Other liabilities	 	 	1,186	 	 	1,071	 	
 	 		 		 	
 	 	Total Liabilities	 	 	19,760	 	 	18,015	 	

Commitments and Contingent Liabilities	

 	

 	

Redeemable Preferred Stock	

50	

50	

Company-Obligated Mandatorily Redeemable Preferred Capital Securities of Subsidiary Trust Holding Solely the Company's Junior Subordinated Debentures	

800	

800	

Stockholders' Equity	

 	

 	
 	
 	Common stock—$1 par value	 	 	295	 	 	293	 	
 	Paid-in additional capital	 	 	1,647	 	 	1,654	 	
 	Accumulated other comprehensive loss	 	 	(389	)	 	(535	)	
 	Retained earnings	 	 	3,119	 	 	3,021	 	
 	Less—Treasury stock at cost	 	 	(784	)	 	(786	)	
 	 	Deferred compensation	 	 	(175	)	 	(182	)	

Total Stockholders' Equity	

3,713	

3,465	

 	 	
Total Liabilities and Stockholders' Equity	
 	
$	
24,323	
 	
$	
22,330	

See the accompanying notes to the condensed consolidated financial statements.
2

 Aon CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 	 	Third Quarter Ended
	 	Nine Months Ended
	 	
(millions except per share data)
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	
Revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Brokerage commissions and fees	 	$	1,551	 	$	1,297	 	$	4,505	 	$	3,925	 	
 	Premiums and other	 	 	607	 	 	510	 	 	1,780	 	 	1,510	 	
 	Investment income	 	 	88	 	 	105	 	 	171	 	 	205	 	
 	 		 		 		 		 	
 	 	Total revenue	 	 	2,246	 	 	1,912	 	 	6,456	 	 	5,640	 	

Expenses	

 	

 	

 	

 	
 	
 	General expenses	 	 	1,652	 	 	1,384	 	 	4,786	 	 	4,303	 	
 	Benefits to policyholders	 	 	350	 	 	271	 	 	1,055	 	 	823	 	
 	Interest expense	 	 	32	 	 	31	 	 	91	 	 	98	 	
 	Amortization of intangible assets (Note 7)	 	 	13	 	 	40	 	 	38	 	 	118	 	
 	Unusual charges (credits)—World Trade Center (Note 3)	 	 	(18	)	 	53	 	 	(18	)	 	53	 	
 	 		 		 		 		 	
 	 	Total expenses	 	 	2,029	 	 	1,779	 	 	5,952	 	 	5,395	 	

Income Before Income Tax and Minority Interest	

217	

133	

504	

245	
 	
 	Provision for income tax	 	 	79	 	 	51	 	 	186	 	 	95	 	
 	 		 		 		 		 	
Income Before Minority Interest	 	 	138	 	 	82	 	 	318	 	 	150	 	
 	Minority interest—8.205% trust preferred capital securities	 	 	(10	)	 	(10	)	 	(30	)	 	(30	)	
 	 		 		 		 		 	
Net Income	 	$	128	 	$	72	 	$	288	 	$	120	 	
 	 		 		 		 		 	
 	Preferred stock dividends	 	 	(1	)	 	(1	)	 	(2	)	 	(2	)	
 	 		 		 		 		 	
Net Income Available for Common Stockholders	 	$	127	 	$	71	 	$	286	 	$	118	 	

Basic Net Income Per Share	
 	
$	
0.46	
 	
$	
0.26	
 	
$	
1.04	
 	
$	
0.44	

Dilutive Net Income Per Share	
 	
$	
0.46	
 	
$	
0.26	
 	
$	
1.03	
 	
$	
0.44	

Cash dividends per share paid on common stock	
 	
$	
0.225	
 	
$	
0.225	
 	
$	
0.675	
 	
$	
0.67	

Dilutive average common and common equivalent shares outstanding	

277.1	

275.4	

277.2	

271.0	

See the accompanying notes to the condensed consolidated financial statements.
3

 Aon CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 	 	Nine Months Ended
	 	
(millions)
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	 	
 	Net income	 	$	288	 	$	120	 	
 	Adjustments to reconcile net income to cash provided by operating activities	 	 	 	 	 	 	 	
 	 	Insurance operating assets and liabilities, net of reinsurance	 	 	289	 	 	90	 	
 	 	Amortization of intangible assets	 	 	38	 	 	118	 	
 	 	Depreciation and amortization of property, equipment and software	 	 	150	 	 	134	 	
 	 	Income taxes	 	 	(38	)	 	(93	)	
 	 	Special and unusual charges and purchase accounting liabilities	 	 	8	 	 	86	 	
 	 	Valuation changes on investments, income on disposals and impairments	 	 	96	 	 	101	 	
 	 	Other receivables and liabilities—net	 	 	218	 	 	122	 	
 	 		 		 	
 	 	 	Cash Provided by Operating Activities	 	 	1,049	 	 	678	 	
 	 		 		 	
Cash Flows from Investing Activities:	 	 	 	 	 	 	 	
 	Sale of investments	 	 	 	 	 	 	 	
 	 	Fixed maturities	 	 	 	 	 	 	 	
 	 	 	Maturities	 	 	128	 	 	93	 	
 	 	 	Calls and prepayments	 	 	68	 	 	73	 	
 	 	 	Sales	 	 	1,367	 	 	712	 	
 	 	Equity securities	 	 	247	 	 	257	 	
 	 	Other investments	 	 	62	 	 	93	 	
 	Purchase of investments	 	 	 	 	 	 	 	
 	 	Fixed maturities	 	 	(1,169	)	 	(817	)	
 	 	Equity securities	 	 	(19	)	 	(178	)	
 	 	Other investments	 	 	(27	)	 	(58	)	
 	Short-term investments—net	 	 	(491	)	 	(558	)	
 	Acquisition of subsidiaries	 	 	(40	)	 	(101	)	
 	Property and equipment and other—net	 	 	(196	)	 	(166	)	
 	 		 		 	
 	 	 	Cash Used by Investing Activities	 	 	(70	)	 	(650	)	
 	 		 		 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	
 	Treasury and common stock transactions—net	 	 	29	 	 	30	 	
 	Issuance (payments) of short-term borrowings—net	 	 	43	 	 	(116	)	
 	Issuance of long-term debt	 	 	166	 	 	—	 	
 	Repayment of long-term debt	 	 	—	 	 	(136	)	
 	Interest sensitive, annuity and investment-type contracts	 	 	 	 	 	 	 	
 	 	Deposits	 	 	—	 	 	20	 	
 	 	Withdrawals	 	 	(555	)	 	(265	)	
 	Cash dividends to stockholders	 	 	(186	)	 	(179	)	
 	 		 		 	
 	 	 	Cash Used in Financing Activities	 	 	(503	)	 	(646	)	
 	 		 		 	
Effect of Exchange Rate Changes on Cash	 	 	12	 	 	(2	)	
 	 		 		 	
Increase (Decrease) in Cash	 	 	488	 	 	(620	)	
Cash at Beginning of Period	 	 	439	 	 	1,118	 	
 	 		 		 	
Cash at End of Period	 	$	927	 	$	498	 	
 	 		 		 	
See the accompanying notes to condensed consolidated financial statements.
4

 Notes to the Condensed Consolidated Financial Statements
1.    Statement of Accounting Principles
        The financial results included in this report are stated in conformity with accounting principles generally accepted in the United States and are unaudited but include all normal recurring adjustments which the Registrant ("Aon") considers necessary for a fair presentation of the results for such periods. These interim figures are not necessarily indicative of results for a full year as further discussed below.
        Refer to the consolidated financial statements and notes in the Annual Report on Form 10K/A for the year ended December 31, 2001 for additional details of Aon's financial position, as well as a description of the accounting policies that have been continued without material change, except for the adoption of Financial Accounting Standard Board's (FASB) Statements No. 141 and 142.
        Certain amounts in prior year's condensed consolidated financial statements have been reclassified to conform to the 2002 presentation.
Other Than Temporary Impairments on Investments Recognition Policy
        Declines in the market value of invested assets below cost are evaluated for other than temporary impairment losses on a quarterly basis.
        Impairment losses for declines in value of fixed maturity investments and equity securities below cost attributable to issuer-specific events are based upon all relevant facts and circumstances for each investment and are recognized when appropriate in accordance with SAB 59, FASB Statement No. 115 and related guidance. For fixed maturity investments with unrealized losses due to market conditions or industry-related events where the Company has the positive intent and ability to hold the investment for a period of time sufficient to allow a market recovery or to maturity, declines in value below cost are not assumed to be other than temporary.
        Aon's policy for equity securities is to recognize impairment losses on specific securities that have had continuous material unrealized losses for more than three consecutive quarters or less, due to market conditions or industry-related events.
2.    Accounting and Disclosure Changes
        Effective January 1, 2002, Aon adopted FASB Statement No. 142, Goodwill and Other Intangible Assets . As a result of adopting Statement No. 142, the Company's goodwill is no longer amortized. Pursuant to Statement No. 142, goodwill must be periodically tested for impairment and the new standard provided six months to complete the impairment review. In first quarter 2002, Aon completed its impairment review that indicated that there was no impairment as of January 1, 2002, (see note 7).
        Aon also has adopted FASB Statement No. 141, Business Combinations . In accordance with Statement No. 141, other intangible assets that do not meet the criteria for recognition apart from goodwill (as defined by Statement No. 141) are to be classified as goodwill upon adoption of the statement. Aon has reclassified $287 million of these intangibles, net of accumulated amortization, to goodwill as of January 1, 2002. The December 31, 2001 consolidated statement of financial position has been reclassified for this item.
        Aon also adopted FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets , effective January 1, 2002. The adoption of Statement No. 144 did not have a material impact on Aon's consolidated financial statements.
        In June 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Statement No. 146 supercedes Emerging Issues Task Force (EITF) Issue No. 94-3,
5

Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). Statement No. 146 is effective January 1, 2003. The adoption of this statement is not expected to have a material impact on Aon's consolidated financial statements.
3.    Unusual Charges (Credits)—World Trade Center
        In the third quarter 2001, Aon recorded pretax unusual charges of $53 million, net of insurance and reinsurance recoveries, related to losses sustained as a result of the destruction of the World Trade Center on September 11, 2001 and the death of 175 employees. Costs incurred in this period included $29 million of destroyed depreciable assets at net book value and $30 million for salaries and benefits for missing employees and other costs. Offsetting these expenses were estimated insurance recoveries of $51 million as of third quarter 2001. These costs also included $192 million of insurance benefits paid by Aon's Combined Insurance Company of America subsidiary (CICA) under life insurance policies issued for the benefit of deceased employees, which were partially offset by reinsurance recoveries of $147 million. Reinsurers have disputed their liability as to approximately $90 million of reinsurance recoveries under a Business Travel Accident (BTA) policy issued by CICA to cover U.S.-based employees of subsidiaries of Aon, and legal actions have been filed by both parties. In fourth quarter 2001, Aon recorded a pretax $90 million allowance for a potentially uncollectible receivable related to this dispute. On September 11, 2002, CICA's action with respect to the BTA policy was dismissed by the Court for the lack of subject matter jurisdiction. CICA is seeking an expedited appeal.
        In third quarter 2002, a partial settlement was reached with Aon's property insurance carriers regarding reimbursement for depreciable assets destroyed. This settlement resulted in a pretax credit of $18 million, which is reported as an unusual credit—World Trade Center in the condensed consolidated statements of income.
4.    Planned Divestiture of Underwriting Business
        In April 2001, Aon's Board of Directors approved, in principle, a plan to spin-off its current underwriting businesses to Aon's common stockholders, creating two independent, publicly traded companies. The company was named Combined Specialty Group, Inc. (Combined Specialty). In August 2002, Aon announced it was investigating alternative options for Combined Specialty, including a sale of all or part of Combined Specialty and/or a spin-off of part of Combined Specialty. At that time, a prompt sale of all or part of Aon's underwriting operations, at an acceptable price was believed to be achievable within a reasonable timeframe. However, due to adverse market conditions for mergers and acquisitions, Aon announced on October 31, 2002 that it has decided not to sell, or spin-off, its major underwriting subsidiaries. However, during the fourth quarter 2002 the Company will have costs associated with the winddown of the expanded corporate and underwriting staff that was added in contemplation of the spin-off.
        In the first nine months of 2002, Aon incurred $8 million of expenses related to the proposed divestiture. These expenses primarily represent outside professional fees and have been recorded in general expenses in the condensed consolidated statements of income.
6

5.    Comprehensive Income
        The components of comprehensive income, net of related tax, for the third quarter and nine months ended September 30, 2002 and 2001 are as follows:

 	 	Third Quarter
Ended September 30,
	 	Nine Months
Ended September 30,
	 	
(millions)
					 	
	 	2002
	 	2001
	 	2002
	 	2001
	 	
Net income	 	$	128	 	$	72	 	$	288	 	$	120	 	
Net derivative gains (losses)	 	 	4	 	 	7	 	 	17	 	 	(5	)	
Net unrealized investment gains	 	 	7	 	 	13	 	 	55	 	 	35	 	
Net foreign exchange gains (losses)	 	 	(20	)	 	16	 	 	74	 	 	(30	)	
 	 		 		 		 		 	
Comprehensive income	 	$	119	 	$	108	 	$	434	 	$	120	 	
 	 		 		 		 		 	
        The components of accumulated other comprehensive loss, net of related tax are as follows:

(millions)
	 	September 30,
2002
	 	December 31,
2001
	 	
Net derivative gains	 	$	17	 	$	—	 	
Net unrealized investment gains (losses)	 	 	13	 	 	(42	)	
Net foreign exchange losses	 	 	(251	)	 	(325	)	
Net additional minimum pension liability	 	 	(168	)	 	(168	)	
 	 		 		 	
Accumulated other comprehensive loss	 	$	(389	)	$	(535	)	
 	 		 		 	
6.    Business Segments
        Aon classifies its businesses into three operating segments based on the types of services and/or products delivered. There is also a fourth non-operating segment, Corporate and Other. The Insurance Brokerage and Other Services segment consists primarily of Aon's retail, reinsurance and wholesale brokerage operations, as well as related insurance services, including claims services, underwriting management, captive insurance company management services and premium financing. Certain service businesses related to insurance underwriting operations are also reflected in this segment. The Consulting segment is Aon's human capital consulting organization that utilizes five major practices: employee benefits, compensation, management consulting, outsourcing and communications. The Insurance Underwriting segment provides specialty insurance products including supplemental accident, health and life insurance coverages, extended warranty and other specialty property and casualty insurance products. Corporate and Other segment revenue consists primarily of investment income from equity, fixed maturity and short-term investments that are assets primarily of the insurance underwriting subsidiaries that exceed net policyholders' liabilities. Revenues are derived from investment income from certain investments (which include non-income producing equities), valuation changes in remaining limited partnership investments, and gains and losses on disposals of all securities and other than temporary impairment losses, including those pertaining to assets maintained by the operating segments. Corporate and Other expenses include general expenses, including administrative and certain information technology costs, interest expense and, in 2001, goodwill amortization.
        Amounts reported in the tables for the four segments, when aggregated, total to the amounts in the accompanying condensed consolidated financial statements. Revenues are attributed to geographic areas based on the location of the resources producing the revenues. There are no material inter-segment amounts to be eliminated.
7

        Selected information reflecting Aon's operating segments follows:

 	 	Insurance Brokerage
and Other Services
	 	 	 	 	 	Insurance
Underwriting
	 	
 			 	Consulting
			 	
Third Quarter ended Sept. 30
(millions):
							 	
	 	2002
	 	2001
	 	2002
	 	2001
	 	2002
	 	2001
	 	
Revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	United States	 	$	676	 	$	597	 	$	186	 	$	161	 	$	465	 	$	409	 	
 	United Kingdom	 	 	278	 	 	227	 	 	39	 	 	37	 	 	91	 	 	75	 	
 	Continent of Europe	 	 	197	 	 	149	 	 	23	 	 	15	 	 	41	 	 	30	 	
 	Rest of World	 	 	172	 	 	139	 	 	21	 	 	19	 	 	49	 	 	51	 	
 	 		 		 		 		 		 		 	
Total revenue	 	$	1,323	 	$	1,112	 	$	269	 	$	232	 	$	646	 	$	565	 	
 	 		 		 		 		 		 		 	
Income before income taxes	 	$	201	(1)	$	145	(2)	$	26	 	$	29	 	$	41	 	$	35	(3)	

(1)
Includes $18 million of unusual credits—World Trade Center.

(2)
Includes $8 million of unusual charges—World Trade Center.

(3)
Includes $45 million of unusual charges—World Trade Center.

 	 	Insurance Brokerage
and Other Services
	 	 	 	 	 	Insurance
Underwriting
	 	
 			 	Consulting
			 	
Nine months ended Sept. 30
(millions):
							 	
	 	2002
	 	2001
	 	2002
	 	2001
	 	2002
	 	2001
	 	
Revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	United States	 	$	1,906	 	$	1,740	 	$	503	 	$	453	 	$	1,363	 	$	1,208	 	
 	United Kingdom	 	 	783	 	 	670	 	 	112	 	 	110	 	 	261	 	 	225	 	
 	Continent of Europe	 	 	652	 	 	550	 	 	71	 	 	53	 	 	109	 	 	91	 	
 	Rest of World	 	 	506	 	 	423	 	 	64	 	 	57	 	 	168	 	 	156	 	
 	 		 		 		 		 		 		 	
Total revenue	 	$	3,847	 	$	3,383	 	$	750	 	$	673	 	$	1,901	 	$	1,680	 	
 	 		 		 		 		 		 		 	
Income before income taxes	 	$	530	(1)	$	349	(2)	$	76	 	$	77	(3)	$	103	(4)	$	158	(5)	

(1)
Includes $18 million of unusual credits—World Trade Center and $6 million of credits related to business transformation.

(2)
Includes $187 million of expenses related to business transformation and $8 million of unusual charges—World Trade Center.

(3)
Includes $7 million of expenses related to business transformation.

(4)
Includes $8 million of spin-off expenses related to the planned divestiture of Combined Specialty.

(5)
Includes $45 million of unusual charges—World Trade Center and $24 million of expenses related to business transformation.
8

        Selected information for Aon's Corporate and Other segment follows:

 	 	Third Quarter Ended
Sept. 30,
	 	Nine Months Ended
Sept. 30,
	 	
Corporate and Other
(millions)
					 	
	 	2002
	 	2001
	 	2002
	 	2001
	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Limited partnership investments	 	$	—	 	$	7	 	$	14	 	$	(56	)	
Income from marketable equity securities and other investments	 	 	8	 	 	2	 	 	14	 	 	6	 	
 	 		 		 		 		 	
Revenue before one-time items and loss on
    disposals / write-downs and related expenses	 	 	8	 	 	9	 	 	28	 	 	(50	)	
Interest on tax refund	 	 	—	 	 	—	 	 	48	 	 	—	 	
Loss on disposals / write-downs and related expenses*	 	 	—	 	 	(6	)	 	(118	)	 	(46	)	
 	 		 		 		 		 	
 	Revenue	 	 	8	 	 	3	 	 	(42	)	 	(96	)	
 	 		 		 		 		 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	General expenses	 	 	27	 	 	18	 	 	72	 	 	57	 	
 	Interest expense	 	 	32	 	 	31	 	 	91	 	 	98	 	
 	Amortization of goodwill	 	 	—	 	 	30	 	 	—	 	 	88	 	
 	 		 		 		 		 	
Loss before income tax	 	$	(51	)	$	(76	)	$	(205	)	$	(339	)	

*
Includes other than temporary investment impairment write-downs of $11 million and $1 million for the third quarter ended September 30, 2002 and 2001, respectively, and $120 million (including $56 million or $0.13 per share for the cumulative adjustment for other than temporary impairments that existed in prior financial reporting periods, of which $5 million pertains to first quarter 2002) and $34 million for the nine months ended September 30, 2002 and 2001, respectively.
7.    Goodwill and Other Intangible Assets
        In accordance with FASB Statement No. 142, all of Aon's goodwill will no longer be amortized. Goodwill and other intangible assets are allocated to various reporting units, which are either at its operating segments or one reporting level below the operating segment. In prior years, goodwill amortization has been systematically expensed in the Corporate and Other segment. Statement No. 142 requires Aon to compare the fair value of the reporting unit to its carrying value on an annual basis to determine if there is potential impairment of goodwill. If the fair value of the reporting unit is less than its carrying value at the valuation date, an impairment loss would be recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than the recorded amount of goodwill. Fair value is estimated based on various valuation metrics, including revenue multiples, earnings before interest, taxes, depreciation and amortization and discounted cash flows.
9

        A reconciliation of the prior year's quarter and nine months year-to-date reported net income to adjusted net income had Statement No. 142 and the reclassification provisions of Statement No. 141 been applied as of January 1, 2001 follows:

 	 	Third Quarter Ended Sept. 30, 2001
	 	Nine Months Ended Sept. 30, 2001
	 	
(millions, except per share amounts)
	 	Amount
	 	Basic Net Income Per Share
	 	Dilutive Net Income Per Share
	 	Amount
	 	Basic Net Income Per Share
	 	Dilutive Net Income Per Share
	 	
Reported net income	 	$	72	 	$	0.26	 	$	0.26	 	$	120	 	$	0.44	 	$	0.44	 	

Add back amortization (net of tax):	

 	

 	

 	

 	

 	

 	
 	
 	Goodwill	 	 	26	 	 	0.10	 	 	0.10	 	 	77	 	 	0.28	 	 	0.28	 	
 	Intangible assets reclassified to goodwill	 	 	3	 	 	0.01	 	 	0.01	 	 	8	 	 	0.03	 	 	0.03	 	
Less amortization (net of tax):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Other intangible assets—change in amortization periods	 	 	(2	)	 	(0.01	)	 	(0.01	)	 	(4	)	 	(0.02	)	 	(0.02	)	
 	 		 		 		 		 		 		 	
 	 	$	99	 	$	0.36	 	$	0.36	 	$	201	 	$	0.73	 	$	0.73	 	
 	 		 		 		 		 		 		 	
Reported net income and net income per share for the third quarter and nine months ended Sept.  30, 2002	 	$	128	 	$	0.46	 	$	0.46	 	$	288	 	$	1.04	 	$	1.03	 	
 	 		 		 		 		 		 		 	
        The changes in the net carrying amount of goodwill for the nine months ended September 30, 2002 are as follows:

(millions)
	 	Insurance
Brokerage
and Other
Services
	 	Consulting
	 	Insurance
Underwriting
	 	Total
	
Balance as of December 31, 2001 (note 2)	 	$	3,239	 	$	366	 	$	237	 	$	3,842	
Goodwill acquired during the period	 	 	33	 	 	4	 	 	—	 	 	37	
Foreign currency revaluation	 	 	117	 	 	1	 	 	1	 	 	119	
 	 		 		 		 		
Balance as of September 30, 2002	 	$	3,389	 	$	371	 	$	238	 	$	3,998	
 	 		 		 		 		
        Amortizable intangible assets by asset class follow:

(millions)
	 	Customer
Related and
Contract Based
	 	Present Value
of Future
Profits
	 	Marketing,
Technology
and Other
	 	Total
	
Balance as of December 31, 2001	 	$	86	 	$	80	 	$	76	 	$	242	

Balance as of September 30, 2002	
 	
$	
75	
 	
$	
62	
 	
$	
67	
 	
$	
204	

Range of years amortized	

3 - 29	

4 - 13	

3 - 25	

 	
 	 		 		 		 	 	 	
        Amortization expense for amortizable intangible assets for the years ending December 31, 2002, 2003, 2004, 2005 and 2006 is estimated to be $52 million, $51 million, $41 million, $28 million and $26 million, respectively.
8.    Capital Stock
        During the first nine months 2002, Aon issued or reissued 2,457,000 shares of common stock for employee benefit plans and 317,000 shares in connection with the employee stock purchase plan. Aon purchased 74,000 shares of its common stock at a total cost of $2.9 million during the first nine months
10

of 2002. There were 22.4 million shares of common stock held in treasury at September 30, 2002, of which all but 32,000 shares are restricted as to their reissuance.
9.    Capital Securities
        In 1997, Aon Capital A, a subsidiary trust of Aon, issued $800 million of 8.205% mandatorily redeemable preferred capital securities (capital securities). The sole asset of Aon Capital A is $824 million aggregate principal amount of Aon's 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027.
10.    Business Combinations
        For the third quarter and nine months 2002, Aon made payments of $3 million and $8 million, respectively, on restructuring charges and purchase accounting liabilities relating to business combinations.
        In 1996 and 1997, Aon recorded pretax special charges of $60 million and $145 million, respectively, related to management's commitment to a formal plan of restructuring Aon's brokerage operations as a result of the acquisition of Alexander & Alexander Services, Inc. (A&A). Also in 1997, following management's commitment to a formal plan of restructuring the A&A and Bain Hogg brokerage operations, Aon recorded $264 million in costs to restructure those acquisitions. Together, these costs were primarily related to termination benefits of $152 million, lease abandonments and other exit costs of $280 million, and asset impairments of $37 million. All termination benefits have been paid. The remaining liability of $53 million is for lease abandonments and other exit costs.
        The following table sets forth recent activity relating to these liabilities:

(millions)
	 	 	 	
Balance at December 31, 2000	 	$	78	 	
Cash payments in 2001	 	 	(19	)	
Cash payments in 2002	 	 	(8	)	
Foreign currency revaluation	 	 	2	 	
 	 		 	
Balance at September 30, 2002	 	$	53	 	
 	 		 	
        All of Aon's unpaid liabilities relating to acquisitions are reflected in general expense liabilities in the condensed consolidated statements of financial position.
11.    Business Transformation Plan
        In fourth quarter 2000, after formal approval by its Board of Directors, Aon began a comprehensive business transformation plan designed to enhance client service, improve productivity through process redesign and accelerate growth. Costs of the plan include special charges and transition costs. In connection with the overall plan and strategic initiatives, the Company recorded total net expenses of $294 million in 2002, 2001 and 2000, of which $6 million of income and $218 million of expenses were recorded for the nine months ended September 30, 2002 and 2001, respectively, and are reflected in general expenses in the condensed consolidated statements of income.
        For the first nine months of 2001, expenses included costs related to termination benefits of $109 million, covering notification to 3,150 employees. Other costs to exit an activity of $21 million were incurred, which included $10 million for abandoned leases and $11 million for direct costs necessary to complete portions of the business transformation plan, cash settlements necessary to exit contractual obligations and other costs.
        Other expenses of $88 million were recorded in the first nine months of 2001. The Company has acted as a servicing agent for a limited partnership affiliated with automobile dealerships to provide
11

auto financing to dealerships on a cooperative basis through various financing conduit facilities. The Company also has a general partnership interest in the limited partnership. Continued competition from financing provided by the financing arms of automobile manufacturers caused the Company to evaluate whether it wished to continue in this servicing partner relationship. In first quarter 2001, the Company elected to cease new servicing business and run off its existing service obligation. The limited partnership affiliated with automobile dealerships established allowances for uncollectible loan balances. In conjunction with the decision to discontinue new auto financing receivables, the limited partners are not obligated to contribute additional capital beyond what they have already provided for any shortfall in the reserves for their individual book of business. The Company is required to fund any shortfalls in accordance with the Company's limited recourse to the funding facility arranged by the servicing agent. The servicing agent estimated the liability that the Company would have for the existing shortfall at the time the Company decided to discontinue new auto loan financing under the facility. The Company recorded a charge to establish this obligation in accordance with FASB Statement No. 5, which amounted to an expense of $44 million. For the year 2000, the last full year of operation, these servicing operations, which were part of the Company's brokerage segment, generated revenue of $42 million and pretax income of $3 million.
        During the first nine months of 2001 the Company exited four other joint venture operations as a part of its business transformation process. For the year 2000, the last full year of operation, these joint ventures, which were part of the Company's brokerage segment, generated less than $1 million of revenue and incurred nearly $3 million of pretax losses. The total cost to exit these four joint ventures was $12 million. Additional expenses in the first nine months of 2001 included a provision of $14 million for discontinuing supplemental accident and health insurance business operations in Mississippi. The expense included severance costs and expenses associated with the reassignment of agents, as well as estimated costs for resolving asserted and unasserted claims and suits. A $5 million expense was recorded relating to the write-down of certain agent receivables in conjunction with the restructuring of a worksite marketing agent commission pay structure and operations.
        Further fixed asset impairments of $10 million (of which $9 million related to information systems assets) were taken in the first nine months of 2001, as well as $3 million of other costs.
        In the second quarter 2002, $6 million of pretax costs previously incurred in connection with the business transformation plan in the U.S. were reversed and included as a credit to general expenses.
        Approximately 3,900 employees have either departed voluntarily or have positions that have been eliminated. Most of the terminations have occurred and are related to the Insurance Brokerage and Other Services segment in the U.S. and the U.K.
        For the third quarter and first nine months of 2002, Aon made payments of $9 million and $31 million, respectively, related to the business transformation plan.
12

        The following table sets forth the activity related to the liability for termination benefits and costs to exit an activity:

(millions)
	 	Termination
Benefits
	 	Other Costs
to Exit an
Activity
	 	Total
	 	
Expense charged in 2000	 	$	54	 	$	6	 	$	60	 	
Cash payments in 2000	 	 	(13	)	 	(3	)	 	(16	)	
Expense charged in 2001	 	 	109	 	 	21	 	 	130	 	
Cash payments in 2001	 	 	(73	)	 	(20	)	 	(93	)	
Cash payments in 2002	 	 	(29	)	 	(2	)	 	(31	)	
Credit to expense in 2002	 	 	(6	)	 	—	 	 	(6	)	
Foreign currency revaluation	 	 	1	 	 	—	 	 	1	 	
 	 		 		 		 	
Balance at September 30, 2002	 	$	43	 	$	2	 	$	45	 	
 	 		 		 		 	
        All of Aon's unpaid liabilities relating to business transformation plan are reflected in general expense liabilities in the condensed consolidated statements of financial position.
12.    Income Per Share
        Income per share is calculated as follows:

 	 	Third Quarter Ended
September 30,
	 	Nine Months Ended
September 30,
	 	
(millions except per share data)
					 	
	 	2002
	 	2001
	 	2002
	 	2001
	 	
Net income	 	$	128	 	$	72	 	$	288	 	$	120	 	
Redeemable preferred stock dividends	 	 	(1	)	 	(1	)	 	(2	)	 	(2	)	
 	 		 		 		 		 	
Net income for dilutive and basic	 	$	127	 	$	71	 	$	286	 	$	118	 	

Basic shares outstanding	

276	

272	

275	

268	
 	
Common stock equivalents	 	 	1	 	 	3	 	 	2	 	 	3	 	
 	 		 		 		 		 	
Dilutive potential common shares	 	 	277	 	 	275	 	 	277	 	 	271	 	
 	 		 		 		 		 	
Basic net income per share	 	$	0.46	 	$	0.26	 	$	1.04	 	$	0.44	 	
Dilutive net income per share	 	$	0.46	 	$	0.26	 	$	1.03	 	$	0.44	 	
 	 		 		 		 		 	
13.    Alexander & Alexander Services Inc. (A&A) Discontinued Operations
        Prior to its acquisition by Aon, A&A discontinued its property and casualty insurance underwriting operations in 1985, some of which were then placed into run-off, with the remainder sold in 1987. In connection with those sales, A&A provided indemnities to the purchaser for various estimated and potential liabilities, including provisions to cover future losses attributable to insurance pooling arrangements, a stop-loss reinsurance agreement and actions or omissions by various underwriting agencies previously managed by an A&A subsidiary.
        In January 2002, Aon settled certain of these liabilities. The settlements had no material effect on the condensed consolidated financial statements. As of September 30, 2002, the liabilities associated with the foregoing indemnities were included in other liabilities in the condensed consolidated statements of financial position. These A&A related liabilities amounted to $49 million, net of reinsurance recoverables and other assets of $99 million.
13

14.    Contingencies
        Aon and its subsidiaries are subject to numerous claims, tax assessments and lawsuits that arise in the ordinary course of business. The damages that may be claimed are substantial, including in many instances claims for punitive or extraordinary damages. Accruals for these items have been provided to the extent that losses are deemed probable and are estimable.
        In the second quarter of 1999, Allianz Life Insurance Company of North America, Inc. ("Allianz") filed an amended complaint in Minnesota adding a brokerage subsidiary of Aon as a defendant in an action which Allianz brought against three insurance carriers reinsured by Allianz. These three carriers provided certain types of workers' compensation reinsurance to a pool of insurers and to certain facilities managed by Unicover Managers, Inc. ("Unicover"), a New Jersey corporation not affiliated with Aon. Allianz alleges that the Aon subsidiary acted as an agent of the three carriers when placing reinsurance coverage on their behalf. Allianz claims that the reinsurance it issued should be rescinded or that it should be awarded damages, based on alleged fraudulent, negligent and innocent misrepresentations by the carriers, through their agents, including the Aon subsidiary defendant.
        On August 30, 2002, two of the three carriers referred to above filed a complaint in the United States District Court for the District of Connecticut against the Aon brokerage subsidiary. The two carriers are currently involved in an arbitration proceeding with Allianz, related to the original litigation, in which Allianz seeks the recission of the reinsurance placements. These carriers also seek to recover from the Aon brokerage subsidiary any damages, costs and expenses, including legal fees, suffered by such carriers as a result of an adverse arbitration award. Aon believes that the Aon subsidiary has meritorious defenses and the Aon subsidiary intends to vigorously defend this claim. The remaining Unicover issues are complex, and therefore, the timing and amount of resolution cannot be determined at this time. In early October 2002, there was reportedly an award made by arbitrators in an arbitration held in New York among Unicover Managers, Inc., Unicover pool members and the three carriers referred to above. Aon has not received a copy of the arbitration award and therefore cannot make an informed statement as to its content.
        Certain U.K. subsidiaries of Aon have been required by their regulatory body, the Personal Investment Authority (PIA), to review advice given by those subsidiaries to individuals who bought pension plans during the period from April 1988 to June 1994. These reviews have resulted in a requirement to pay compensation to clients based on guidelines issued by the PIA. Aon's ultimate exposure from the private pension plan review, as presently calculated, is subject to a number of variable factors including, among others, general level of pricing in the equity markets, the interest rate established quarterly for calculating compensation, and the precise scope, duration and methodology of the review, including whether recent regulatory guidance will have to be applied to previously settled claims. These variable factors are ones that the U.K. Financial Services Authority, the current governing body in the U.K., has used as a basis in the past for establishing the calculation tables to determine redress or compensatory amounts. Because the Company is unable to predict if, or how, regulators may change these tables or if, or how, they may apply future regulatory guidance to previous claims, the Company has been, and will continue to be, unable to determine a range or estimate of additional possible exposure.
        One of Aon's insurance subsidiaries is a defendant in several lawsuits in Mississippi. The lawsuits generally allege misconduct by the subsidiary in the solicitation and sale of insurance policies. Attorneys representing the plaintiffs in these lawsuits have advised the subsidiary that approximately 2,700 other current or former policyholders may file similar claims. Each lawsuit includes, and each threatened claim could include, a request for punitive damages. Aon's insurance subsidiary has been litigating the pending suits and investigating the claims. In the second quarter 2002, Aon negotiated a compromise of several of the lawsuits and approximately 2,000 of the claims. In the third quarter of 2002, the settlement of approximately 1,000 of these claims has been concluded. The remainder of the
14

settlements are still in the process of being documented and finalized, but Aon is not certain that the plaintiff's attorney will be able to deliver all of the releases promised. If not, the settlement may not be concluded. If this settlement is concluded, there will still be at least 2,700 threatened claims outstanding. Each of the remaining lawsuits and any threatened claim is being investigated and vigorously defended.
        On August 8, 2002, Daniel & Raizel Taubenfeld, a purported Aon stockholder, filed a putative class action lawsuit in the United States District Court in the Northern District of Illinois, Eastern Division, on behalf of purchasers of Aon Common Stock between May 4, 1999 and August 6, 2002. The complaint names Aon, Patrick G. Ryan, Chairman and Chief Executive Officer, and Harvey N. Medvin, Executive Vice President and Chief Financial Officer, as defendants, and contains allegations of violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated under such Act relating to Aon's press release issued on August 7, 2002. The plaintiff seeks, among other things, class action certification, compensatory damages in an unspecified amount and an award of costs and expenses, including counsel fees. Aon intends to defend the action vigorously.
        There have been nine other putative class action lawsuits filed against Aon and certain of its officers and directors in the United States District Court in the Northern District of Illinois and that each is substantially similar to the lawsuit described in the immediately preceding paragraph. All of these actions have been consolidated with the Taubenfeld action and a lead plaintiff has been appointed by the court. Aon intends to defend each of these actions vigorously.
        Aon has also received a complaint which purports to be a shareholder's derivative action against the Company and each of the Company's directors. This complaint, which is styled Bernard Stern v. Patrick Ryan, et al. was filed in the United States District Court for the Northern District of Illinois on September 13, 2002. This lawsuit makes allegations which are substantially similar to the Taubenfeld lawsuit. Aon intends to defend this action vigorously.
        Although the ultimate outcome of all matters referred to above cannot be ascertained and liabilities in indeterminate amounts may be imposed on Aon or its subsidiaries, on the basis of present information, amounts already provided, availability of insurance coverages and legal advice received, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the consolidated financial position of Aon. However, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable resolution of these matters.
15.    Unconsolidated Special Purpose Entities (SPEs) excluding PEPS I
        Certain of Aon's subsidiaries make loans to businesses for the financing of insurance premiums and then securitize the finance receivables through securitization transactions that meet the criteria for sale accounting in accordance with FASB Statement No. 140. These premium financing securitizations are accomplished through the use of special purpose entities which are considered qualifying SPEs ("QSPEs") pursuant to FASB Statement No. 140, and commercial paper bank conduits (multi-seller non-qualified SPEs). FASB Statement No. 140 provides that a QSPE should not be consolidated in the financial statements of a transferor or its affiliates (Aon's subsidiaries). Based on an analysis of the qualitative and quantitative factors of the multi-seller, non-qualified SPEs, Aon has determined that it is not the sponsor of the SPEs. Additionally, independent third parties (i) have made substantial equity investments in the SPEs, (ii) have voting control of the SPEs and (iii) generally have the risks and rewards of ownership of the assets of the SPEs. Based on these factors, Aon has determined non-consolidation to be the appropriate accounting treatment in accordance with current accounting guidance.
15

        At September 30, 2002, Aon's maximum credit risk under recourse provisions was approximately $97 million, which represents the extent of the limited recourse.
        Aon is also a general partner in a limited partnership ("LP") that purchased automobile installment contracts from automobile dealers and subsequently securitized these contracts through securitization transactions in accordance with the requirements of FASB Statement No. 140. Effective April 1, 2001, the LP ceased purchasing and securitizing new automobile installment contracts. Aon continues to service the LP's existing portfolio. Aon uses the equity method of accounting to record its share of the net income or loss of the LP. As of September 30, 2002, the amount of financing outstanding in this LP was $603 million with $153 million subject to limited recourse to Aon. The amounts for the LP have been included in Aon's disclosure because Aon has guaranteed a portion of the LP's maximum recourse obligations.
16.    Subsequent Events
        On October 31, 2002, the Company announced that its board of directors had declared a quarterly cash dividend of $0.15 per share payable on November 20, 2002 to common stockholders of record as of November 8, 2002. This was a reduction from the last quarterly dividend of $0.225 per share.
        On November 7, 2002, Aon completed a public offering of 36.8 million shares of its common stock at $17.18 per share, raising net proceeds of approximately $607 million. The offering was made pursuant to an existing shelf registration statement. Also on November 7, Aon completed a separate private offering of $300 million aggregate principal amount of 3.5% convertible senior debentures due 2012. Net proceeds from this offering were approximately $292 million. The debentures are unsecured obligations and, under certain circumstances, convertible into Aon common stock at an initial conversion price of approximately $21.475 per common share. The debentures were sold to qualified institutional buyers. The company has used the net proceeds from these two offerings to repay outstanding commercial paper and other short-term debt. A portion of the funds were invested and will be utilized to repay debt that is maturing in 2003.
        The expedited appeal referred to in Note 3 was recently granted.
        The settlement of the other approximately 1,000 claims referred to in Note 14 has not been concluded. Aon has taken the position that the plaintiff's attorney failed to deliver all of the promised releases and that the settlement is therefore rescinded.
16

 Aon CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2002
General
        Aon has three operating segments: Insurance Brokerage and Other Services, Consulting and Insurance Underwriting. These segments are based on the type of client and the services or products delivered. Aon has a fourth, non-operating segment, Corporate and Other.
        References to organic revenue growth exclude the impact of acquisitions, dispositions, transfers, investment income, foreign exchange and other unusual items. Within the Insurance Underwriting segment, written premiums are the basis for the measurement of organic growth. References to income before income tax are before minority interest related to the issuance of 8.205% mandatorily redeemable preferred capital securities.
Information Concerning Forward-Looking Statements
        This quarterly report may contain certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, rating agency actions, the cost and availability of financing, changes in commercial property and casualty premium rates, the competitive environment, the actual cost of resolution of contingent liabilities and other loss contingencies, the ultimate impact of the business transformation plan, and the timing and resolution of related insurance and reinsurance issues relating to the events of September 11, 2001.
Planned Divestiture of Underwriting Business
        As previously disclosed, in April 2001, Aon's Board of Directors approved, in principle, a plan to spin-off its insurance underwriting businesses to Aon's common stockholders, creating two independent, publicly traded companies.
        When Aon reported second quarter 2002 results, the Company announced it was continuing to study alternatives to sell or partially spin-off its underwriting operations. At that time, a prompt sale of all or part of Aon's underwriting operations, at an acceptable price, was believed to be achievable within a reasonable timeframe, especially given unsolicited buying interest in the past. While Aon received indications of interest in its underwriting businesses, none was in an acceptable price range due to the unfavorable mergers and acquisitions environment. Proceeds from a sale of such businesses would have allowed the company to pay down short-term debt but it would have resulted in unacceptable dilution. A spin-off of part of Aon's underwriting operations was also determined to be impractical due to capital requirements. The Company in fourth quarter 2002 will have costs associated with the winddown of the expanded corporate and underwriting staff that was added in contemplation of the spin-off.
        During the first nine months of 2002, Aon incurred $8 million of expenses related to the planned divestiture. These expenses, recorded in general expenses in the condensed consolidated statements of income, primarily represent outside professional fees.
17

Business Transformation Plan
        In fourth quarter 2000, after final approval by its Board of Directors, Aon began a comprehensive business transformation plan designed to enhance client service, improve productivity through process redesign, and accelerate revenue growth. The majority of the plan costs relate to the Insurance Brokerage and Other Services segment, principally in the U.S. and the United Kingdom, where most of Aon's offices and employees are located. Outside of U.S. retail brokerage, the business transformation plan has been substantially implemented and has delivered the expected benefits, including improved revenue growth and enhanced productivity. In U.S. retail brokerage, the plan entailed extensive process redesign following the rollout of a new policy management and accounting system (completed in 2000), and substantial job redesign based on functional expertise and the creation of four new client service centers. There were unexpected delays in implementing components of the plan due to challenges in handling higher volumes of information transfers between field operations and the client service centers as well as the destruction of Aon's largest and most advanced client service center, which was housed in the World Trade Center. This delay also adversely affected new business production, as attention was diverted from generating new accounts to completing client conversions and maintaining service to existing New York region clients from Aon's offices throughout the U.S. Expenses have been higher than expected, due in part to additional temporary employee expense necessary to complete the account conversions to the client service centers, as well as increased compensation for certain brokerage employees and the hiring of employees with specialized skills. The changing dynamics of the insurance marketplace following the World Trade Center disaster have also increased the time requirements and expense for handling certain job functions.
        The implementation and results of the Company's business transformation plan for the Company's U.S. retail brokerage operations can only be fully understood in the context of the unprecedented events that occurred during the implementation of the plan:
•
The Company's largest U.S. retail brokerage office, then located in the World Trade Center, was destroyed on September 11, 2001;

•
1,100 of the Company's employees worked in the World Trade Center, including employees from all of the Company's major businesses;

•
250 additional employees either worked in other lower Manhattan offices or were visiting the World Trade Center from around the world on September 11th, which demonstrates the significance of this office to the Company's global operations;

•
175 of the Company's employees died in the World Trade Center attack on September 11th;

•
Displaced World Trade Center employees had to be relocated to other New York City metropolitan offices;

•
The Company's largest and most advanced retail brokerage client service center—an important element of the business transformation that had been built and staffed just months before—was destroyed on September 11th and had to be rebuilt in Manhattan while client work was rerouted to the remaining three client service centers in the U.S.;

•
Regular client servicing was referred to other offices of the Company for handling over varying periods of time until employees had proper temporary work facilities;

•
The September 11th attacks thrust the insurance industry into the most tumultuous period in its recent history;

•
Client demand for risk management advice and services has grown dramatically since September 11th;

•
Premium rates have accelerated to their highest levels in decades;
18

•
Insurance capacity has been restricted and policy coverage has tightened;

•
Workloads for insurance brokers to complete similar tasks have significantly increased; and

•
Competitive demand for risk management professionals has risen along with compensation requirements.
        A summary of the business transformation costs by calendar year follows, with more complete descriptions following the summary table. The 2001 costs were incurred in the nine months ended September 30, 2001, but no costs were incurred in the third quarter ended September 30, 2001. The credit was recorded in the second quarter ended June 30, 2002.

(millions except per share data and employees data)
	 	2000
	 	2001
	 	2002
	 	Plan
Total
	
Business Transformation Costs	 	 	 	 	 	 	 	 	 	 	 	 	
 	Pretax expense (credit)	 	$	82	 	$	218	 	$	(6	)	$	294	
 	After-tax expense (credit)	 	 	50	 	 	133	 	 	(4	)	 	179	
 	Dilutive EPS	 	 	0.19	 	 	0.49	 	 	(0.01	)	 	0.67	

Pretax Expense by Type:	

 	

 	

 	

 	
 	Termination benefits	 	$	54	 	$	109	 	$	(6	)	$	157	
 	# of employees (approximate)	 	 	750	 	 	3,150	 	 	—	 	 	3,900	
 	Exit Costs, Impairments and Other Expenses	 	$	28	 	$	109	 	 	—	 	$	137	
 	 	Abandoned real estate or equipment losses	 	 	2	 	 	10	 	 	—	 	 	12	
 	 	Impairment of fixed assets	 	 	20	 	 	10	 	 	—	 	 	30	
 	 	Obligations related to automobile dealer partnerships	 	 	—	 	 	44	 	 	—	 	 	44	
 	 	Exit of certain joint venture operations	 	 	—	 	 	12	 	 	—	 	 	12	
 	 	Litigation matters and discontinuance of A&H business in one state	 	 	—	 	 	14	 	 	—	 	 	14	
 	 	Commission receivable write-off	 	 	—	 	 	5	 	 	—	 	 	5	
 	 	Direct costs to complete transformation, cash settlements and other costs	 	 	6	 	 	14	 	 	—	 	 	20	
 	 		 		 		 		
 	 	 	 	Total pretax expense (credit)	 	$	82	 	$	218	 	$	(6	)	$	294	
 	 		 		 		 		
        In connection with the overall plan and other strategic initiatives, the Company recorded total net expenses of $294 million: $82 million ($50 million after tax or $0.19 per share) in 2000, $218 million ($133 million after tax or $0.49 per share) in the first nine months of 2001 and a credit of $6 million ($4 million after tax or $0.01 per share) in second quarter 2002. In recording these expenses, the Company followed the accounting guidance from EITF 94-3, SAB 100, FASB Statement No. 121 and FASB Statement No. 5. The expenses incurred under the guidance contained in EITF 94-3 and SAB 100 were recorded in the fourth quarter 2000 and first two quarters of 2001. In each quarter that the Company recorded accruals for either termination benefits and/or other costs to exit an activity, the Company had met all of the requirements contained in EITF 94-3 and SAB 100 prior to recording an accrual, although the Company's board approved the high-level plan in the fall of 2000. The reason that these expenses were incurred over three quarters was that different Company units completed detailed plans and satisfied the employee notification requirements in different timeframes. The $294 million excludes both transition costs primarily relating to parallel system processing and increased compensation for certain U.S. retail brokerage employees. These transition costs amounted to $30 million in 2001 and $10 million in 2002. The expenses pertaining to the Company's U.S. retail brokerage operation were approximately 19% of the total charge. The Company does not anticipate any additional one-time expenses from the business transformation plan.
        Expense amounts of $54 million and $109 million for termination benefits were included in 2000 and 2001, respectively, covering notification of approximately 750 employees in 2000 and
19

3,150 employees in 2001. A portion of the overall employment reduction was expected to be accomplished through normal attrition and, therefore, no expense was attributable to those reductions.
        When the overall business transformation plan was announced in late 2000, the Company estimated a net reduction in personnel of 3,000 - 3,500. This range included an estimated new hire level of 500 people. By June 30, 2001, the last of the three consecutive quarters that the execution of the detailed plans occurred and termination benefits and other costs were incurred, the Company's charges included termination benefits for 3,900 employees. The new hire level has grown to approximately 900 people related to the business transformation plan; this heightened level of rehires is causing the Company to reach the lower end of the net reduction range. The gross employee reduction level, which is the number tied to the charge for termination benefits, has remained consistent since the commitment date, with the exception of approximately 200 U.S. retail employees discussed below.
        Of the 3,900 notified employees, more than 3,050 had been removed from the payroll as of December 31, 2001. Approximately 500 and 150 of the remaining notified/not terminated employees are associated with international and domestic business units, respectively, where the exit plans included later termination dates. Employment laws in certain countries require extended periods before a notified employee can be terminated. These exit plans were sufficient in detail as to specific employee groups and, in some cases, specific employees. The employee groups were, at or before the expense accrual date, properly notified and were given adequate information about severance benefits. The plans are being completed in accordance with the original exit plans. The run-off of the associated liability will trail the completion of the plan primarily because the Company's policy is to pay severance ratably over the eligible period, rather than in a lump sum amount, whenever possible.
        Approximately 200 of the remaining notified/not terminated employees were to have their jobs terminated under a U.S. retail brokerage exit plan; however, the events of September 11 caused an unforeseeable delay in progress under this exit plan and ultimately reduced the total number of employees whose employment was to be terminated.
        Included in the total expense of $294 million are approximately $27 million in other costs to exit an activity. Of that amount, $6 million was incurred in 2000, including $2 million in abandoned real estate or equipment leases and $4 million of direct costs necessary to complete portions of the business transformation plan, cash settlements necessary to exit contractual obligations and other costs. In 2001, $21 million of expenses were recorded to exit an activity, which included $10 million for abandoned leases and $11 million for direct costs necessary to complete portions of the business transformation plan, cash settlements necessary to exit contractual obligations and other costs.
        As part of the business transformation and other strategic initiatives, other expenses of $110 million were incurred. Of this total, $22 million was recorded in 2000. Impairment of fixed assets accounted for $20 million of the 2000 expense, including $16 million for information systems assets. The net book value of these assets was written off, as these assets no longer had value to the Company. The assets were considered impaired due to: (1) the system being removed from service or (2) the system being under development and the decision to abandon development occurred as a result of the transformation. The other fixed assets, comprised of certain technology infrastructure equipment, were deemed to be impaired as they ceased to have any value to the Company due to the outsourcing of the relevant function to an outside party and the abandonment of the assets. There was $2 million of other costs.
        Other expenses of $88 million were recorded in 2001. The Company has acted as a servicing agent for a limited partnership affiliated with automobile dealerships to provide auto financing to dealerships on a cooperative basis through various financing conduit facilities. The Company also has a general partnership interest in the limited partnership. Continued competition from financing provided by the financing arms of automobile manufacturers caused the Company to evaluate whether it wished to continue in this servicing partner relationship. In first quarter 2001, the Company elected to cease new servicing business and run off its existing service obligation. The limited partnership affiliated with
20

automobile dealerships establishes allowances for uncollectible loan balances. In conjunction with the decision to discontinue new auto financing receivables, the limited partners are not obligated to contribute additional capital beyond what they have already provided for any shortfall in the reserves for their individual book of business. The Company is required to fund any shortfalls in accordance with the Company's limited recourse to the funding facility, arranged by the servicing agent. The servicing agent estimated the liability that the Company would have for the existing shortfall at the time the Company decided to discontinue new auto loan financing under the facility. The Company recorded a charge to establish this obligation in accordance with FASB Statement No. 5, which amounted to an expense of $44 million. For the year 2000, the last full year of operation, these servicing operations, which were part of the Company's brokerage segment, generated revenue of $42 million and pretax income of $3 million.
        During 2001, the Company exited four other joint venture operations as a part of its business transformation process. For the year 2000, the last full year of operation, these joint ventures, which were part of the Company's brokerage segment, generated less than $1 million of revenue and incurred nearly $3 million of pretax losses. The total cost to exit these four joint ventures was $12 million. Additional expenses in 2001 included a provision of $14 million for discontinuing supplemental accident and health insurance business operations in Mississippi. The charge included severance costs and expenses associated with the reassignment of agents, as well as estimated costs for resolving asserted and unasserted claims and suits. A $5 million expense was recorded relating to the write-down of certain agent receivables in conjunction with the restructuring of a worksite marketing agent commission pay structure and operations.
        Further fixed asset impairments of $10 million (of which $9 million related to information systems assets) were taken in 2001, as well as $3 million of other costs.
        The insurance brokerage industry has experienced significant expansion since September 11th with increased client demand for risk management services that was not anticipated at the origination of the business transformation. This unanticipated expansion has also caused some of the delay in the implementation of the plan. The Company has incurred additional spending, which partially explains the offset in savings, to take advantage of this industry expansion. However, revenue growth has not yet achieved expected levels as a result of this additional spending.
World Trade Center
        In the third quarter 2001, Aon recorded pretax unusual charges of $53 million, net of insurance and reinsurance recoveries, related to losses sustained as a result of the destruction of the World Trade Center on September 11, 2001 and the death of 175 employees. Costs incurred for this period included $29 million of destroyed depreciable assets at net book value and $30 million for salaries and benefits for missing employees and other costs. Offsetting these expenses were estimated insurance recoveries of $51 million as of third quarter 2001. These costs also included $192 million of insurance benefits paid by Aon's Combined Insurance Company of America subsidiary (CICA) under life insurance policies issued for the benefit of deceased employees, and is partially offset by reinsurance recoveries of $147 million. Reinsurers have disputed their liability as to approximately $90 million of reinsurance recoveries under a Business Travel Accident (BTA) policy issued by CICA to cover U.S.-based employees of subsidiaries of Aon, and legal actions have been filed by both parties. In fourth quarter 2001, Aon recorded a pretax $90 million allowance for a potentially uncollectible receivable related to this dispute. On September 11, 2002, CICA's action with respect to the BTA policy was dismissed by the Court for the lack of subject matter jurisdiction. CICA is seeking an expedited appeal.
        In third quarter 2002, a partial settlement was reached with Aon's insurance carriers regarding reimbursement for depreciable assets destroyed. This settlement resulted in a pretax credit of $18 million, which is reported as an unusual credit—World Trade Center in the condensed consolidated statements of income.
21

Consolidated Results
        The consolidated results of operations follows:

 	 	Three months ended
	 	Nine months ended
	 	
(millions)
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Brokerage commissions and fees	 	$	1,551	 	$	1,297	 	$	4,505	 	$	3,925	 	
 	Premiums and other	 	 	607	 	 	510	 	 	1,780	 	 	1,510	 	
 	Investment income	 	 	88	 	 	105	 	 	171	 	 	205	 	
 	 		 		 		 		 	
 	Total consolidated revenue	 	 	2,246	 	 	1,912	 	 	6,456	 	 	5,640	 	
 	 		 		 		 		 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	General expenses*	 	 	1,652	 	 	1,384	 	 	4,786	 	 	4,303	 	
 	Benefits to policyholders	 	 	350	 	 	271	 	 	1,055	 	 	823	 	
 	Interest expense	 	 	32	 	 	31	 	 	91	 	 	98	 	
 	Amortization of intangible assets	 	 	13	 	 	40	 	 	38	 	 	118	 	
 	Unusual charges (credits)—	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	World Trade Center	 	 	(18	)	 	53	 	 	(18	)	 	53	 	
 	 		 		 		 		 	
 	Total expenses	 	 	2,029	 	 	1,779	 	 	5,952	 	 	5,395	 	
 	 		 		 		 		 	
Income before income tax	 	$	217	 	$	133	 	$	504	 	$	245	 	
 	 		 		 		 		 	
Pretax margin	 	 	9.7	%	 	7.0	%	 	7.8	%	 	4.3	%	

*
Includes $8 million in expenses for the nine months ended September 30, 2002 related to efforts to spin-off the underwriting business and $6 million of income and $218 million of expenses for the nine months ended September 30, 2002 and 2001, respectively, related to business transformation.
        Total revenue increased $334 million or 17% when compared to third quarter 2001. Excluding the effect of foreign exchange rates, revenues rose 15% over third quarter 2001, attributable principally to growth in brokerage commissions and fees and an increase in premiums and other which more than offset a decline in investment income, due to higher impairment write-downs along with lower interest rates. For the first nine months of 2002, revenues rose $816 million, or 14% over last year. Foreign exchange rates were not a factor in the nine month comparison. Increases occurred in brokerage commissions and fees and premiums and other. Investment income declined year over year as higher impairment write-downs in 2002 more than offset a one-time tax related item of $48 million and a positive valuation change in limited partnerships in 2002 versus reduced valuations last year.
        Brokerage commissions and fees increased $254 million or 20% in third quarter 2002 and $580 million or 15% on a year over year basis. This improvement was primarily from organic growth (including the impact of increased premium rates, increased new business and outsourcing contracts), and to a lesser extent, 2001 business combination activity, especially First Extended, Inc. and ASI Solutions Incorporated (ASI).
        Premiums and other is primarily related to insurance underwriting operations. Premiums and other improved $97 million over third quarter 2001 and rose $270 million or 18% in the first nine months of 2002. For both periods, growth in the accident and health lines, new business initiatives and new specialty property and casualty lines was somewhat offset by the impact of the prior loss of some accounts in the warranty business.
        Investment income, which includes related expenses and income or loss on disposals and impairments, decreased by 16% in the third quarter 2002 when compared to prior year. Other than temporary impairment write-downs for certain directly owned investments were $10 million higher than last year. In addition, income decreased due to lower returns resulting from reductions in short-term
22

interest rates from 2001. In December 2001, Aon sold the vast majority of its limited partnership (LP) portfolio. The remaining LP's posted a positive change in valuation versus reduced valuations in 2001, somewhat offsetting the decline. Year-to-date, investment income declined by $34 million. The Company has always had a policy of reviewing the investment portfolio of its subsidiaries for potential impairments. As a result of comments from the staff of the Securities and Exchange Commission, the Company is recognizing other than temporary impairments over a shorter time horizon with respect to equity and certain below investment grade fixed maturity securities which have been trading below cost. The Company took a $56 million charge in second quarter 2002 for other than temporary impairments to date under this new policy and has agreed to modify its policy prospectively. See note 1 for the revised impairment recognition policy. Investment income was also impacted by the receipt in first quarter 2002 of $48 million due to a tax related settlement. Investment income from Insurance Brokerage and Other Services and Consulting segments, primarily relating to fiduciary funds, decreased $7 million and $39 million in third quarter and nine months 2002, respectively, compared to similar periods in 2001, primarily as a result of declines in rates.
        Total expenses increased $250 million or 14% over third quarter 2001. Expenses in 2002 include an $18 million credit due to a partial settlement with the Company's insurance carriers regarding reimbursement for depreciable assets destroyed in the World Trade Center. Expenses in 2001 include $53 million in unusual charges also related to the World Trade Center (see note 3). Total expenses, excluding these items, rose 19%. General expenses increased $268 million or 19% in the quarter, reflecting growth of the businesses, risk management and litigation reserve items in the insurance brokerage and other services segment, and higher overall pension plan costs. Benefits to policyholders rose $79 million or 29% due to higher loss ratios and an increased payout ratio of benefits to policyholders versus net premiums earned. Interest expense was up slightly as lower short-term interest rates were offset by an increase in total debt outstanding. Amortization of intangible assets declined $27 million from 2001 as goodwill was not amortized in 2002 in accordance with FAS 142 (see note 7).
        For nine months 2002, total expenses increased $557 million or 10% over 2001. In addition to the World Trade Center items noted above, year-to-date expenses include $8 million of costs related to the planned divestiture of Combined Specialty and a credit of $6 million reflecting the reversal of certain termination benefits previously incurred as part of the business transformation plan. In 2001, $218 million of expenses were recognized for the business transformation plan. Total expenses, excluding the above expenses, rose 16%. General expenses increased $483 million or 11% for the first nine months 2002. Excluding the items related to the divestiture of Combined Specialty, the reversal of termination benefits, and the business transformation plan, general expenses rose 17% over the first nine months 2001. This increase is primarily due to the growth of the business, higher costs in the U.S. retail brokerage business in the first half of the year, risk management and non-claim litigation reserves, increased bad debt allowance due to National Program Services, Inc. (NPS), and higher pension plan costs. Benefits to policyholders rose 28% to $1.1 billion, reflecting higher loss ratios, issues related to NPS and an increased payout ratio of benefits to policyholders versus net premiums earned. Interest expense fell $7 million or 7%, driven by lower short-term interest rates. Amortization of intangible assets decreased $80 million as goodwill was not amortized in 2002.
        For the quarter, income before income tax increased $84 million to $217 million. Excluding the one-time items discussed above, income before income tax increased 7% from last year. For the first nine months 2002, income before income tax rose from $245 million to $504 million. Excluding the one-time items discussed above, income before tax decreased 5% from $516 million to $488 million.
        Third quarter 2002 net income rose to $128 million ($0.46 per both dilutive and basic shares) compared to $72 million ($0.26 per both dilutive and basic shares) in 2001. Year-to-date, 2002 net income rose to $288 million ($1.03 per dilutive share) compared to $120 million ($0.44 per dilutive share) in 2001. Basic net income per share was $1.04 and $0.44 for the first nine months of 2002 and 2001, respectively. Dividends on the redeemable preferred stock have been deducted from net income to compute income per share. The exclusion of goodwill amortization in 2002 contributed to Aon's
23

effective tax rate declining to 37% for both the third quarter and first nine months 2002 from 39% in both comparable periods for 2001.
Operating Segments
        The operating segment results of operations follows:

 	 	Three months ended
	 	Nine months ended
	 	
(millions)
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	Sept. 30,
2002
	 	Sept. 30,
2001
	 	
Operating segment revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Insurance brokerage and other services	 	$	1,323	 	$	1,112	 	$	3,847	 	$	3,383	 	
 	Consulting	 	 	269	 	 	232	 	 	750	 	 	673	 	
 	Insurance underwriting	 	 	646	 	 	565	 	 	1,901	 	 	1,680	 	
 	 		 		 		 		 	
Total operating segments	 	 	2,238	 	 	1,909	 	 	6,498	 	 	5,736	 	
 	 		 		 		 		 	
Income before income tax:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Insurance brokerage and other services	 	 	201	(A)	 	145	(B)	 	530	(C)	 	349	(D)	
 	Consulting	 	 	26	 	 	29	 	 	76	 	 	77	(E)	
 	Insurance underwriting	 	 	41	 	 	35	(F)	 	103	(G)	 	158	(H)	
 	 		 		 		 		 	
Total income before income tax—operating segments	 	$	268	 	$	209	 	$	709	 	$	584	 	
 	 		 		 		 		 	
Pretax Margins:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Insurance brokerage and other services	 	 	15.2	%	 	13.0	%	 	13.8	%	 	10.3	%	
 	Consulting	 	 	9.7	 	 	12.5	 	 	10.1	 	 	11.4	 	
 	Insurance underwriting	 	 	6.3	 	 	6.2	 	 	5.4	 	 	9.4	 	
Total operating segments	 	 	12.0	%	 	10.9	%	 	10.9	%	 	10.2	%	

(A)
Includes $18 million of unusual credits—World Trade Center.

(B)
Includes $8 million of unusual charges—World Trade Center.

(C)
Includes $18 million of unusual credits—World Trade Center and $6 million of credits related to business transformation.

(D)
Includes $8 million of unusual charges—World Trade Center and $187 million of expenses related to business transformation.

(E)
Includes $7 million of expenses related to business transformation.

(F)
Includes $45 million of unusual charges—World Trade Center.

(G)
Includes $8 million of spin-off expenses related to the planned divestiture of Combined Specialty.

(H)
Includes $45 million of unusual charges—World Trade Center and $24 million of expenses related to business transformation.
Insurance Brokerage and Other Services
        The Insurance Brokerage and Other Services segment consists principally of Aon's retail, reinsurance and wholesale brokerage operations as well as related insurance services, including claims services, underwriting management, captive insurance company management services and premium financing. This segment represented 59% of Aon's total operating segment revenues for both the third quarter and first nine months 2002, respectively.
        Third quarter 2002 Insurance Brokerage and Other Services revenue was $1.3 billion, up 19% over last year. Excluding foreign exchange, revenues rose 16%. Year-to-date, revenues of $3.8 billion improved 14% over the previous year. Excluding foreign exchange, revenues grew 13%. Organic
24

revenue growth was 18% in the quarter and 13% for first nine months 2002. U.S. and international retail, reinsurance and wholesale brokerage all posted solid revenue growth for both periods. Reported revenues were impacted by a decline in investment income of $6 million and $36 million for the third quarter and first nine months 2002, respectively, due to lower interest rates.
        U.S. revenue of $676 million for the quarter was up 13% from 2001. For the first nine months, revenues climbed 10% to $1.9 billion. The increase for both periods reflects fundamental growth, improved pricing and the impact of acquisitions, all of which more than offset a fall off of investment income due to lower interest rates. U.S. and international retail, reinsurance and wholesale brokerage performed well. U.S. retail's organic growth rose significantly over 2001 for both the quarter and year-to-date periods. Commercial property and casualty premium rate increases were evident for most lines of coverage and client demand for risk retention programs and services has risen along with the upward trend in premium rates. U.K. and Continent of Europe revenues of $475 million for the third quarter and $1.4 billion for the first nine months 2002 increased 26% and 18%, respectively, from 2001, primarily due to organic growth. Rest of world revenue increased $33 million or 24% over third quarter 2001 and $83 million or 20% over the first nine months 2001, reflecting solid organic growth resulting from new business, good renewal rates and the positive impact of hardening insurance markets.
        Pretax income was $201 million for the third quarter 2002, an increase of 39% from 2001. Excluding a 2002 credit of $18 million due to a partial settlement with Aon's insurance carriers related to the World Trade Center and a 2001 unusual charge resulting from the destruction of the World Trade Center of $8 million, pretax income rose 20% from 2001. Pretax margins were 15.2% in the quarter compared to 13.0% in 2001. Excluding the above items, pretax margins were flat to last year at 13.8%. Improvements in U.S. retail and worldwide reinsurance were offset by lower investment income and higher pension costs. Year-to-date, pretax income was $530 million. Excluding the impact of the items discussed above, a 2002 credit of $6 million for the reversal of expenses previously incurred for termination benefits and 2001 business transformation plan expenses, pretax income of $506 million declined $38 million or 7% from nine months 2001. Pretax margins were 13.8% and 10.3% for the first nine months of 2002 and 2001, respectively. Excluding impact of the one-time items noted above, pretax margins were 13.2% and 16.1% for 2002 and 2001, respectively. Higher costs in certain parts of the U.S. retail business, due to delays in the business transformation process, including expense to run parallel systems longer than expected, along with increased compensation costs, including higher pension costs, contributed to the margin decline. Additional impacts in the year-to-date comparison include the decline in investment income, lower claims handling and managing general underwriting revenue. These items more than offset strong organic growth and business transformation savings.
Consulting
        The consulting segment provides a full range of human capital management services. These services are delivered to a predominately corporate clientele utilizing five practices: employee benefits, compensation, management consulting, outsourcing and human resource communications. This segment accounted for 12% of Aon's total operating segment revenues for both the third quarter and first nine months 2002.
        Third quarter 2002 revenue increased 16% to $269 million. Excluding foreign exchange rate impact, revenues grew 14%. For the first nine months, revenues of $750 million represent a 11% increase over 2001. Foreign exchange rates did not have an impact. Revenue grew 15% and 8% on an organic basis for the third quarter and first nine months 2002, respectively. On a global basis, the improvement in revenue was influenced by organic growth as well as acquisition activity, especially the inclusion of ASI, acquired in the second quarter 2001. The AT&T human resources outsourcing agreement (the AT&T agreement), which began in the second quarter of 2002, was a significant contributor to organic revenue growth in the third quarter. Client demand for solutions that enhance workforce productivity continued. However, the worsening economy has put some pressure on organic revenue growth.
25

        For the quarter, U.S. revenue of $186 million was up 16% from 2001. For the first nine months, revenues climbed 11% to $503 million. The improvement primarily reflects the AT&T agreement, especially for the third quarter. U.K. and Continent of Europe revenue rose $10 million for the quarter and $20 million for the first nine months, compared to 2001, driven by organic revenue growth. Rest of World revenue rose $2 million for the quarter and $7 million for nine months compared to 2001.
        Pretax income was $26 million for the quarter, a 10% decrease over last year. Year-to-date, pretax income was $76 million, a 1% decline from the previous year. Excluding the impact of the business transformation plan, year-to-date pretax income fell $8 million or 10%. Pretax margins in this segment were 9.7% in the quarter compared to 12.5% in 2001. Year-to-date, the pretax margin was 10.1% versus 11.4% in 2001. Adjusted to exclude the business transformation plan, the margin in 2001 was 12.5%. For both periods, margin comparisons were negatively influenced by sizeable new human resources outsourcing contracts. These contracts are expected to provide very favorable returns over the life of the multi-year agreements. However, up-front investment costs to support the new business causes margins to be significantly lower in the early years compared with the later years when margins increase. In addition, the deferment of discretionary projects by clients, as well as the effects of a weak economy hurt pretax margins.
Insurance Underwriting
        The Insurance Underwriting segment provides supplemental accident and health and life insurance coverage through several distribution networks, most of which are directly owned by Aon's subsidiaries, and specialty property and casualty insurance, including extended warranty products. This segment represented 29% of Aon's total operating segment revenues for both the third quarter and nine months 2002, respectively.
        Revenue was $646 million in the third quarter 2002, an increase of 14% from 2001. Excluding the impact of exchange rates, revenues rose 11% for the quarter. Year-to-date, revenues of $1.9 billion in 2002 were a 13% increase over 2001. Foreign exchange rates were not a factor in the year-to-date period. For both periods, improvement over last year principally reflects the impact of strong organic growth, along with acquisitions. Organic revenue growth in the underwriting segment was 10% for the quarter. New specialty property and casualty insurance business and newer accident and health insurance programs factored into the reported revenue increase. Partially offsetting core business growth was lower investment income as well as the prior loss of several accounts in the extended warranty business.
        U.S. revenue increased $56 million in the third quarter 2002 to $465 million. For nine months 2002, revenues rose 13% from 2001 to $1.4 billion. The increase in both periods was driven by higher revenues reflecting new product initiatives and, for the year-to-date period, increased revenues for traditional accident and health products. U.K. and Continent of Europe revenue increased $27 million or 26% for the quarter and $54 million or 17% for the first nine months 2002, respectively, compared to 2001. Rest of World revenue was $49 million for the third quarter, a decline of $2 million from 2001. Year-to-date, revenue of $168 million represents a $12 million improvement over 2001.
        The pretax income for the quarter was $41 million, an increase of 17% from 2001. Excluding the unusual charge of $45 million in 2001 related to the World Trade Center, pretax income declined 49% from 2001.    Pretax margins for the quarter were 6.3% and 6.2% for 2002 and 2001, respectively. Excluding charges related to the World Trade Center in 2001, pretax margins were 14.2% for 2001. The decline in margins for the quarter was due in part to staff build up costs for specialty property and casualty insurance underwriting. The costs related to adding new resources exceeded specialty property and casualty premiums earned. Many of these expenses will continue into the fourth quarter 2002. In addition, the loss of certain warranty accounts, the decline in investment income and an increased payout of benefits compared to net premiums earned contributed to the margin declines. For the first nine months, pretax income of $103 million decreased from $158 million in 2001. Excluding expenses
26

related to the planned divestiture of $8 million in 2002 and expenses related to both the World Trade Center and the business transformation in 2001, pretax income was $111 million in 2002, a 51% decline from $227 million in 2001. Pretax margins were 5.4% in 2002 and 9.4% in 2001. Excluding the items discussed above, margins were 5.8% and 13.5% in 2002 and 2001, respectively. The principal causes of the decline in pretax income and margins for year-to-date were an increased payout ratio of benefits to policyholders versus premiums earned, issues involving NPS, as discussed below, a decline in investment income, and staff build up costs for specialty property and casualty underwriting. During the fourth quarter 2002, additional costs will be incurred associated with the winddown of the underwriting staff that was added in contemplation of the spin-off.
        In December 2000, one of the Company's subsidiaries, Combined Specialty Insurance Company (formerly Virginia Surety Company, Inc.) ("CSIC"), and NPS signed an agreement in which NPS agreed to act as a managing general agent for CSIC. Under the terms of the agreement, NPS was responsible for underwriting, quoting, binding, premium collection, claims adjusting and other servicing related to general liability insurance policies issued by CSIC for apartment owners.
        In March 2002, NPS informed CSIC that it needed some accommodation in order to meet its payment obligations to CSIC. Based on discussions with NPS at that time, CSIC believed that the amounts receivable from NPS as of March 31, 2002 would be paid, although most likely over a longer period of time. However, based on preliminary information provided in these discussions, CSIC commenced a more in depth review of the NPS situation and a legal evaluation of whether NPS had breached its contractual obligations.
        In May 2002, CSIC filed a lawsuit against NPS alleging breach of contract and failure to perform its obligations under the managing general agent agreement. Among other relief, CSIC sought an order restraining NPS from withdrawing or using funds paid to NPS on behalf of policyholders for insurance coverage with CSIC and requiring NPS to produce accounting records and other documents for an immediate audit by CSIC. On May 3, 2002, the court entered a Consent Order granting the injunctive relief requested by CSIC.
        NPS ceased handling CSIC business in May 2002. CSIC is now running off the remaining business placed by NPS with CSIC and overseeing the handling of the related claims. During the process of running off the existing business, CSIC representatives determined that due to the mix of actual policies issued, individual risk selection decisions and premium credits granted, the net exposures were somewhat greater and actual premium rates charged were less than the original estimates. In second quarter 2002 an additional $21 million was provided to increase the loss ratios and for other expenses. CSIC has also recorded an allowance against the $15 million receivable owed by NPS. No cash has been received to date directly from NPS. However, during third quarter 2002, CSIC collected approximately $4 million on surety bonds that secured certain accounts receivable for business placed through NPS.
        Based upon information currently available to CSIC, all policies identified to date have been recorded in the appropriate accounting period. However, to the best of CSIC's current knowledge, no policies have been issued by NPS for CSIC that have not been recorded and all claims that have been made to date relate to a policy for which there is a properly issued policy. If there are any such policies and if they have losses, those losses could impact future results.
27

Non-Operating Segment
Corporate and Other
        Revenue in this category consists primarily of investment income (including income or loss on disposals, including impairment losses) which is not otherwise reflected in the results of the operating segments. Invested assets and related investment income not directly required to support the insurance brokerage and consulting businesses, together with the assets in excess of net policyholder liabilities of the underwriting businesses and related income, are allocated to the Corporate and Other segment. Corporate and Other expenses encompass general expenses, which include administrative and certain information technology costs, interest expense and, in 2001, goodwill amortization.
        Corporate and Other revenue for the third quarter 2002 was $8 million compared to $3 million in the third quarter 2001 reflecting realized gains from investments. Total realized gains were partially offset by losses on certain derivative hedges and realized losses in the international markets. In the third quarter, other than temporary impairments of $11 million were recognized. In December 2001, Aon sold the vast majority of its limited partnership (LP) portfolio to PEPS I. The remaining LP's provided a positive change in valuation versus reduced valuations in 2001. For the first nine months, negative revenue of $42 million was a significant improvement over negative revenue of $96 million in 2001. The improvement in revenue was driven by a positive change in the valuation of the remaining LP's in 2002 versus reduced valuations in 2001, as well as $48 million of interest income received in the first quarter due to the settlement of a prior year tax related issue. These items were somewhat offset by increased other than temporary investment impairments of $86 million, which includes a $56 million cumulative effect of the change in policy for recognizing other than temporary impairments, of which $5 million pertains to first quarter 2002, taken in the second quarter.
        The fixed-maturity portfolio had a $41 million gross unrealized loss at September 30, 2002, including $6 million related to deferred amortizable derivative losses, and is subject to interest rate risk, market risk and credit risk. The equity portfolio is comprised of non-redeemable preferred stocks and private and publicly-traded common stocks. The non-redeemable preferred stock portfolio had a $1 million gross unrealized loss and is subject to interest rate risk, market risk, credit risk and illiquidity risk. The common stock portfolio had no gross unrealized loss at September 30, 2002 and is subject to illiquidity risk, concentration risk, and operating performance risk relative to private equities and market risk relative to publicly-traded stocks. Aon's portfolios are highly diversified but remain exposed to market, equity and credit risk.
        The following table contains an analysis of Aon's investment positions with unrealized losses segmented by quality and period of continuous unrealized loss (excluding deferred amortizable derivative losses of $6 million) as of September 30, 2002:
28

Investment Positions with Unrealized Losses Segmented by Quality and Period of Continuous Unrealized Loss*
As of September 30, 2002

 	 	Investment Grade
	 	Non-Investment Grade
	 	Not Rated
	 	 	 	
($ in millions)
	 	0-6
Months
	 	6-12
Months
	 	> 12
Months
	 	Total
	 	0-6
Months
	 	6-12
Months
	 	> 12
Months
	 	Total
	 	0-6
Months
	 	6-12
Months
	 	> 12
Months
	 	Total
	 	Grand Total
	 	
FIXED MATURITIES	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	# of positions	 	 	24	 	 	6	 	 	42	 	 	72	 	 	15	 	 	1	 	 	3	 	 	19	 	 	—	 	 	—	 	 	—	 	 	—	 	 	91	 	
 	Fair Value	 	$	75	 	$	25	 	$	243	 	$	343	 	$	34	 	$	6	 	$	1	 	$	41	 	$	—	 	$	—	 	$	—	 	$	—	 	$	384	 	
 	Cost or Amortized Cost	 	 	77	 	 	26	 	 	268	 	 	371	 	 	40	 	 	7	 	 	1	 	 	48	 	 	—	 	 	—	 	 	—	 	 	—	 	 	419	 	
 	Unrealized Loss	 	 	(2	)	 	(1	)	 	(25	)	 	(28	)	 	(6	)	 	(1	)	 	—	 	 	(7	)	 	—	 	 	—	 	 	—	 	 	—	 	 	(35	)	

EQUITIES; PREFERRED	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	
 	
 	# of positions	 	 	6	 	 	—	 	 	1	 	 	7	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	7	 	
 	Fair Value	 	$	19	 	$	—	 	$	—	 	$	19	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	19	 	
 	Cost	 	 	20	 	 	—	 	 	—	 	 	20	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	20	 	
 	Unrealized Loss	 	 	(1	)	 	—	 	 	—	 	 	(1	)	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	(1	)	

EQUITIES; COMMON	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	
 	
 	# of positions	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	1	 	 	5	 	 	6	 	 	6	 	
 	Fair Value	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	1	 	$	3	 	$	4	 	$	4	 	
 	Cost	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	1	 	 	3	 	 	4	 	 	4	 	
 	Unrealized Loss	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	

OTHER	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	
 	
 	# of positions	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	1	 	 	—	 	 	—	 	 	1	 	 	1	 	
 	Fair Value	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	10	 	$	—	 	$	—	 	$	10	 	$	10	 	
 	Cost	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	27	 	 	—	 	 	—	 	 	27	 	 	27	 	
 	Unrealized Loss	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	(17	)	 	—	 	 	—	 	 	(17	)	 	(17	)	

TOTAL	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	

 	
 	
 	# of positions	 	 	30	 	 	6	 	 	43	 	 	79	 	 	15	 	 	1	 	 	3	 	 	19	 	 	1	 	 	1	 	 	5	 	 	7	 	 	105	 	
 	Fair Value	 	$	94	 	$	25	 	$	243	 	$	362	 	$	34	 	$	6	 	$	1	 	$	41	 	$	10	 	$	1	 	$	3	 	$	14	 	$	417	 	
 	Cost or Amortized Cost	 	 	97	 	 	26	 	 	268	 	 	391	 	 	40	 	 	7	 	 	1	 	 	48	 	 	27	 	 	1	 	 	3	 	 	31	 	 	470	 	
 	Unrealized Loss	 	 	(3	)	 	(1	)	 	(25	)	 	(29	)	 	(6	)	 	(1	)	 	—	 	 	(7	)	 	(17	)	 	—	 	 	—	 	 	(17	)	 	(53	)	
 	% of Total Unrealized Loss	 	 	6	%	 	2	%	 	47	%	 	55	%	 	11	%	 	2	%	 	0	%	 	13	%	 	32	%	 	0	%	 	0	%	 	32	%	 	100	%	

*
For categorization purposes, the Company considers any rating of Baa or higher by Moody's (or equivalent rating agency) to be investment grade.
29

        At September 30, 2002, Aon's diversified fixed-maturity portfolio of $1.9 billion had 91 positions and $35 million of total gross unrealized losses, excluding deferred amortizable derivative losses. No single position had an unrealized loss greater than $3 million. Aon's total fixed-maturity portfolio is 94% investment grade based on market value. Fixed-maturity securities with an unrealized loss are 89% investment grade and have a weighted average rating of "A" based on amortized cost.
        At September 30, 2002, Aon's equity portfolio of $147 million, including non-redeemable preferred stocks, had 13 positions and $1 million of total gross unrealized losses.
        Investments classified as other investments in the condensed consolidated statements of financial position had a $17 million gross unrealized loss at September 30, 2002. The gross unrealized loss relates to preferred stock interests of PEPS I, a QSPE, acquired on December 31, 2001. These preferred stock interests represent beneficial interests in securitized limited partnership investments. The fair value of the private preferred stock interests is dependent on the value of the limited partnership investments held by PEPS I. Management assesses other than temporary declines in the fair value below cost using a financial model that considers the value of the underlying limited partnership investments of PEPS I and the nature and timing of the cash flows from the underlying limited partnership investments of PEPS I.
        Aon's non publicly-traded fixed maturity portfolio had a carrying value of $156 million at September 30, 2002, including $115 million in notes received from PEPS I on December 31, 2001 related to the securitization of limited partnerships and $31 million in notes issued by PEPS I to Aon during the first nine months of 2002. Valuations of these securities primarily reflect the fundamental analysis of the issuer and current market price of comparable securities.
        Management periodically reviews securities with material unrealized losses and tests for other than temporary impairments. Management analyzes various risk factors and determines if any specific asset impairments exist. Once a determination has been made that a specific asset impairment exists, a realized loss is incurred and the cost basis of the impaired asset is adjusted to its fair value.
        Corporate and Other expenses for the quarter were $59 million, down $20 million from the same period last year. Goodwill amortization was $30 million for the third quarter 2001. In accordance with Statement No. 142, which Aon adopted on January 1, 2002, Aon no longer amortizes goodwill. However, Aon is required to test annually for impairments. General expenses rose $9 million over the previous year due in part to expenses related to new management personnel for Combined Specialty. Interest expense for the third quarter was up slightly compared to the prior year, as lower interest rates were offset by higher average debt levels. For the first nine months of 2002, Corporate and Other expenses were $163 million, compared to $243 million last year. Goodwill amortization was $88 million in 2001. General expenses increased $15 million due in part to expenses related to the corporate function of Combined Specialty. Interest expense declined $7 million, reflecting lower interest rates.
        The revenue and expense comparisons discussed above contributed to the overall Corporate and Other pretax loss of $51 million in the quarter versus a loss of $76 million last year. The year-to-date loss of $205 million in 2002 was $134 million better than 2001.
Cash Flow and Financial Position
at the End of Third Quarter 2002
        Cash flows from operating activities represent the net income earned by Aon in the reported periods adjusted for non-cash charges as well as changes in assets and liabilities. Cash flows provided by operating activities for the first nine months 2002 were $1.1 billion, a $371 million increase over the same period in 2001. Net income rose $168 million from 2001, driven by World Trade Center and business transformation costs taken last year. Insurance operating assets and liabilities, net of reinsurance contributed $199 million additional cash flow this year. This increase is primarily due to the
30

specialty property and casualty group (which includes extended warranty) having increased its insurance retention position with several programs, new specialty property and casualty business in the third quarter 2002 and growth in new accident and health insurance programs. Other receivables and liabilities increased $96 million over last year, driven by timing of the collection of brokerage receivables and payment of insurance premiums payables and the timing of accruals.
        Investing activities used cash of $70 million, versus cash used of $650 million in 2001. The net sale of investments provided cash of $657 million during the first nine months of 2002. This was offset by the net purchase of short-term investments of $491 million. In 2001, purchases of short-term investments used $558 million, while net sales of investments generated cash of $175 million.
        Cash of $503 million was used during the first nine months of 2002 for financing activities, which was $143 million less than was utilized in 2001. The lower usage of cash from last year is primarily due to an increase in both short and long-term debt issued in 2002 versus $252 million of debt paid down in 2001. In 2001, a significant amount of U.S. commercial paper was repaid, in part due to utilizing cash from a dividend received from one of Aon's insurance company subsidiaries. No such dividend was received in 2002 to date. Partially offsetting this reduction were increased redemptions of investment-type contracts over 2001.
        Aon's operating subsidiaries anticipate that there will be adequate liquidity to meet their operational needs in the foreseeable future. The liquidity needs of Aon, as the parent company, are primarily for servicing its debt (including the payment of maturities) and for the payment of dividends on common and preferred stock and capital securities. Aon accesses the medium-term note and commercial paper markets for working capital needs and other purposes. Aon has back-up lines of credit with banks supporting its commercial paper program. These lines would be available in the event of a lack of access to the commercial paper market. Aon's borrowing costs increase in the event of credit rating downgrades.
        On October 31, 2002, Moody's Investors Service lowered its rating on Aon's senior debt to the current rating of Baa2 from Baa1. Moody's also placed the rating of Aon's senior debt and the P-2 rating of the company's commercial paper under review for possible future downgrade. On November 14, 2002, Moody's affirmed its rating and removed its rating on Aon from Credit Watch to stable outlook. On November 8, 2002, Standard & Poor's Ratings Services affirmed its A- rating on Aon's senior debt and classified the outlook as stable. As a result of the actions taken by the rating agencies on October 31 and November 8, 2002, Aon has been required, in lieu of its existing guarantees, to fund an aggregate of approximately $43 million with respect to its automobile finance securitization. A further downgrade in the credit ratings of Aon's senior debt and commercial paper will increase the company's borrowing costs and reduce its financial flexibility.
        Any such further downgrade may trigger a further obligation of the company to fund an aggregate of up to $265 million, mainly with respect to its premium finance and automobile finance securitizations, which amount Aon expects will decline over time as the outstanding automobile finance loan securitization portfolio runs down. Moreover, some of the company's debt instruments, such as the floating rate notes due 2003 ($150 million of which are outstanding) and the 6.20% notes due 2007 ($250 million of which are outstanding), expressly provide for interest rate increases in the case of certain ratings downgrades. Similarly, any such downgrade would increase Aon's commercial paper interest rates or may result in an inability to access the commercial paper market altogether. If Aon cannot access the commercial paper market, although the company has committed backup lines in excess of currently outstanding commercial paper borrowings, Aon cannot assure that it would not adversely affect the company's financial position.
        The decline of worldwide financial markets has negatively impacted the fair value of the assets included in Aon's pension plans. Aon currently estimates that this will cause an after-tax increase to the minimum pension liability and a commensurate reduction in year end 2002 stockholders' equity of
31

$450 million to $550 million. Aon measures the pension obligations for the international pension plans using a September 30 measurement date, and for U.S. plans a November 30 measurement date. This non-cash adjustment will not affect 2002 earnings. For 2003, Aon's pension expense is projected to increase by $130 to $160 million as compared to amounts recorded in 2002. Cash contributions for the defined benefit pension plans are expected to be $60 million to $90 million for 2003. In addition, under certain circumstances Aon may be required to contribute significant additional amounts to its pension plans to satisfy certain provisions of the principal credit facility which supports Aon's commercial paper program. Aon expects, however, to amend or replace such credit facilities.
        On November 7, 2002, Aon completed a public offering of 36.8 million shares of its common stock at $17.18 per share, raising net proceeds of approximately $607 million. The offering was made pursuant to an existing shelf registration statement. Also on November 7, Aon completed a separate private offering of $300 million aggregate principal amount of 3.5% convertible senior debentures due 2012. Net proceeds from this offering were approximately $292 million. The debentures are unsecured obligations and, under certain circumstances, convertible into Aon common stock at an initial conversion price of approximately $21.475 per common share. The debentures were sold to qualified institutional buyers. The company has used the net proceeds from these two offerings to repay outstanding commercial paper and other short-term debt. A portion of the funds were invested and will be utilized to repay debt that is maturing in 2003.
        Due to the contractual nature of its insurance policyholder liabilities, which are primarily intermediate to long-term in nature, Aon has invested primarily in fixed maturities. With a carrying value of $1.9 billion, Aon's total fixed maturity portfolio is invested primarily in investment grade holdings (94%) and has a fair value that is 101% of amortized cost at September 30, 2002.
        Total assets of $24.3 billion increased $2.0 billion since year-end 2001. Invested assets at September 30, 2002 increased $120 million from year-end levels. The amortized cost of less than investment grade fixed maturity investments at September 30, 2002 was $123 million. The carrying value of non-income producing investments in Aon's portfolio at September 30, 2002 was $19 million, or 0.3% of total invested assets.
        Short-term borrowings increased at the end of third quarter 2002 by $63 million when compared to year-end 2001 due to higher domestic borrowings, which offset lower international debt. At the end of third quarter 2002, notes payable increased by $168 million when compared to year-end 2001. The increase was due primarily to higher U.S. commercial paper borrowings of $183 million, as additional cash was needed at quarter end in anticipation of repaying $100 million of long-term debt maturing in October 2002. A portion of commercial paper borrowings have been included in notes payable based on Aon's intent and ability to maintain or refinance these obligations on a long-term basis through 2005.
        Stockholders' equity increased $248 million during the first nine months of 2002, reflecting net income before preferred dividends of $288 million. Partially offsetting the increase were dividends paid to stockholders of $186 million. Accumulated other comprehensive loss improved $146 million since December 31, 2001. Net foreign exchange losses improved by $74 million due primarily to the weakening of the U.S. dollar versus certain foreign currencies in the second quarter. Net unrealized investment gains of $13 million was a $55 million increase over year-end, driven principally by the recognition of $120 million pretax ($76 million after tax) write-downs of other than temporary impairments in the condensed consolidated statement of income during the nine months ended September 30, 2002. There was no impact to aggregate stockholders' equity for these write-downs.
        At September 30, 2002, stockholders' equity per share was $13.60, up from $12.82 at December 31, 2001 as the higher stockholders' equity balance more than offset the increased number of shares outstanding since year-end.
32

 Item 4.    Controls and Procedures
        The Company's management, including the Chief Executive Officer and Chief Financial Officer, performed an evaluation (the "Evaluation") of the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days of the filing of this quarterly report on Form 10-Q and have determined that such controls and procedures are designed in such a way to ensure that all material information required to be filed in this Form 10-Q has been made known to them in a timely fashion. There were no significant changes in the Company's internal controls, or in other factors that could significantly affect these controls, subsequent to the date the Evaluation was completed.
Review by Independent Auditors
        The condensed consolidated financial statements at September 30, 2002, and for the three and nine months then ended have been reviewed, prior to filing, by Ernst & Young LLP, Aon's independent auditors, and their report is included herein.
33

INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Stockholders
Aon Corporation
        We have reviewed the accompanying condensed consolidated statement of financial position of Aon Corporation as of September 30, 2002, and the related condensed consolidated statements of income for the three-month and nine-month periods ended September 30, 2002 and 2001 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2002 and 2001. These financial statements are the responsibility of the Company's management.
        We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
        Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.
        We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated statement of financial position of Aon Corporation as of December 31, 2001, and the related consolidated statements of income, stockholders' equity, and cash flows (as restated) for the year then ended, not presented herein, and in our report dated February 12, 2002, except as to Note 1 as to which the date is August 14, 2002, we expressed an unqualified opinion on those consolidated financial statements (as restated). In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2001, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.
ERNST & YOUNG LLP
Chicago, Illinois
November 11, 2002
34

 PART II

OTHER INFORMATION
Item 6.    Exhibits and Reports on Form 8-K
(a)
Exhibits —The exhibits filed with this report are listed on the attached Exhibit Index.

(b)
Reports on Form 8-K —The Registrant filed four current reports on Form 8-K during the quarter ended September 30, 2002 and 3 additional current reports thereafter.
(i)
The Registrant filed a Current Report on Form 8-K dated August 7, 2002, announcing its results of operations for the quarter and six months ended June 30, 2002 and other matters. The following exhibit was included in the report: Exhibit 99—Portions of press release issued on August 7, 2002.

(ii)
The Registrant filed a Current Report on Form 8-K dated August 14, 2002, announcing that the Registrant has resolved all SEC comment letter items and other matters. The following exhibit was included in the report: Exhibit 99—Press release issued August 14, 2002.

(iii)
The Registrant filed a Current Report on Form 8-K dated August 14, 2002, announcing that both its Principal Executive Officer and Principal Financial Officer submitted to the Securities and Exchange Commission a sworn statement pursuant to Securities and Exchange Commission Order No. 4-460. The following exhibits were included in the report: Exhibit 99.1 and 99.2—Statement Under Oath of Principal Executive Officer and Principal Financial Officer Regarding Facts and Circumstances Relating to Exchange Act Filings.

(iv)
The Registrant filed a Current Report on Form 8-K dated September 20, 2002, announcing that on September 20, 2002 the Board of Directors of Aon Corporation amended Aon's By-Laws to establish an advance notice procedure for stockholders to nominate director candidates or bring other business before an annual meeting of stockholders. The following exhibit was included in the report: Exhibit 3.2—By-Laws of the Registrant.

(v)
The Registrant filed a Current Report on Form 8-K dated October 31, 2002, announcing its results of operations for the quarter and nine months ended September 30, 2002 and other matters. The following exhibit was included in the report: Exhibit 99—Portions of press release issued on October 31, 2002.

(vi)
The Registrant filed a Current Report on Form 8-K dated November 4, 2002, announcing its intention to offer convertible debt in a private placement. The following exhibit was included in the report: Exhibit 99—Press Release issued on November 4, 2002.

(vii)
The Registrant filed a Current Report on Form 8-K dated November 7, 2002, announcing the completion of its common stock offering and separate private offering of convertible debentures. The following exhibit was included in the report: Exhibit 99—Press Release issued November 7, 2002.
35

 SIGNATURE
        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 	 	AON CORPORATION
(Registrant)	

November 14, 2002	
 	
By:	
 	
/s/   HARVEY N. MEDVIN       

Harvey N. Medvin 
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)	
36

 CERTIFICATIONS
I, Patrick G. Ryan, the Chief Executive Officer of Aon Corporation, certify that:
        1.    I have reviewed this quarterly report on Form 10-Q of Aon Corporation;
        2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
        3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)
evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
        6.    The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002	 	    /s/   PATRICK G. RYAN       

Patrick G. Ryan
Chief Executive Officer	
37

I, Harvey N. Medvin, the Chief Financial Officer of Aon Corporation, certify that:
        1.    I have reviewed this quarterly report on Form 10-Q of Aon Corporation;
        2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
        3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)
evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
        6.    The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002	 	    /s/   HARVEY N. MEDVIN       

Harvey N. Medvin
Chief Financial Officer	
38

Aon CORPORATION
Exhibit Number
In Regulation S-K
Item 601 Exhibit Table

*3(d)	
 	
Amended By-laws of the Registrant—incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed October 4, 2002.	

4(a)	
 	
Indenture dated as of November 7, 2002 between the Registrant and The Bank of New York, as trustee (including form of note).	

4(b)	
 	
Registration Rights Agreement dated as of November 7, 2002 between the Registrant and Morgan Stanley & Co. Incorporated.	

10(x)	
 	
Three Year Credit Agreement dated as of February 8, 2002 among Aon Corporation, the Lenders named therein, Bank One, NA, as Agent and Citibank N.A., ABN AMRO Bank N.V. and First Union National Bank, as Syndication Agents.	

10(y)	
 	
364-Day Credit Agreement dated as of February 8, 2002 among Aon Corporation, the Lenders name therein, Bank One, NA, as Agent and Citibank, N.A., ABN AMRO Bank N.V. and First Union National Bank, as Syndication Agents.	

10(z)	
 	
Credit Agreement dated September 24, 2001 relating to (i) a multicurrency revolving loan facility of euro 250,000,000 and (ii) a 364 days facility of euro 250,000,000 among Aon Corporation, as Guarantor, Aon Finance Limited, Aon France S.A., Aon Group Nederland B.V., Aon Holdings B.V. and Aon Jauch & Hübener Holdings GmbH, as Borrowers, the Lenders named therein, Citibank International plc as Agent and Salomon Brothers International Limited as Arranger.	

(12)	
 	
Statements regarding Computation of Ratios.	

 	
(a)	
 	
Statement regarding Computation of Ratio of Earnings to Fixed Charges.	

 	
(b)	
 	
Statement regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.	

(15)	
 	
Letter re: Unaudited Interim Financial Information	

(99.1)	
 	
Certification of CEO Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.	

(99.2)	
 	
Certification of CFO Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.	
* Previously filed
39

QuickLinks
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Notes to the Condensed Consolidated Financial Statements
 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 4. Controls and Procedures
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
 CERTIFICATIONS

Exhibit 4(a)

AON CORPORATION
To
THE BANK OF NEW YORK,
 as Trustee
INDENTURE
Dated as of
November 7, 2002

3 1/2 % CONVERTIBLE SENIOR DEBENTURES DUE 2012

TABLE OF CONTENTS

                                                                                              PAGE

                                    ARTICLE 1
                                   DEFINITIONS

SECTION 1.01.  DEFINITIONS......................................................................1

                                    ARTICLE 2
             ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES

SECTION 2.01.  DESIGNATION AMOUNT AND ISSUE OF DEBENTURES.......................................8
SECTION 2.02.  FORM OF DEBENTURES...............................................................9
SECTION 2.03.  DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST.......................10
SECTION 2.04.  EXECUTION OF DEBENTURES.........................................................11
SECTION 2.05.  EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES; RESTRICTIONS ON
         TRANSFER..............................................................................12
SECTION 2.06.  MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.................................18
SECTION 2.07.  TEMPORARY DEBENTURES............................................................20
SECTION 2.08.  CANCELLATION OF DEBENTURES......................................................20
SECTION 2.09.  CUSIP NUMBERS...................................................................20

                                    ARTICLE 3
                     REDEMPTION AND REPURCHASE OF DEBENTURES

SECTION 3.01.  REDEMPTION OF DEBENTURES........................................................21
SECTION 3.02.  NOTICE OF OPTIONAL REDEMPTION; SELECTION OF DEBENTURES..........................21
SECTION 3.03.  PAYMENT OF DEBENTURES CALLED FOR REDEMPTION BY THE COMPANY......................23
SECTION 3.04.  CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION...................................24
SECTION 3.05.  REDEMPTION AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE.......................24
SECTION 3.06.  REPURCHASE OF DEBENTURES BY THE COMPANY AT OPTION OF THE HOLDER.................27
SECTION 3.07.  COMPANY REPURCHASE NOTICE.......................................................28
SECTION 3.08.  EFFECT OF REPURCHASE NOTICE.....................................................29
SECTION 3.09.  DEPOSIT OF PURCHASE PRICE.......................................................30
SECTION 3.10.  DEBENTURES REPURCHASED IN PART..................................................30
SECTION 3.11.  REPAYMENT TO THE COMPANY........................................................30

                                    ARTICLE 4
                               CONTINGENT INTEREST

SECTION 4.01.  CONTINGENT INTEREST.............................................................31	

SECTION 4.02.  PAYMENT OF CONTINGENT INTEREST..................................................31
SECTION 4.03.  CONTINGENT INTEREST NOTIFICATION................................................31

                                    ARTICLE 5
                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 5.01.  PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST......................................32
SECTION 5.02.  MAINTENANCE OF OFFICE OR AGENCY.................................................32
SECTION 5.03.  APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE..............................32
SECTION 5.04.  PROVISIONS AS TO PAYING AGENT...................................................33
SECTION 5.05.  EXISTENCE.......................................................................34
SECTION 5.06.  MAINTENANCE OF PROPERTIES.......................................................34
SECTION 5.07.  PAYMENT OF TAXES AND OTHER CLAIMS...............................................34
SECTION 5.08.  RULE 144A INFORMATION REQUIREMENT...............................................35
SECTION 5.09.  STAY, EXTENSION AND USURY LAWS..................................................35
SECTION 5.10.  COMPLIANCE CERTIFICATE..........................................................35
SECTION 5.11.  LIQUIDATED DAMAGES NOTICE.......................................................36
SECTION 5.12.  CONTINGENT DEBT TAX TREATMENT...................................................36
SECTION 5.13.  CALCULATION OF ORIGINAL ISSUE DISCOUNT..........................................37

                                    ARTICLE 6
               DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SECTION 6.01.  DEBENTUREHOLDERS' LISTS.........................................................37
SECTION 6.02.  PRESERVATION AND DISCLOSURE OF LISTS............................................38
SECTION 6.03.  REPORTS BY TRUSTEE..............................................................38
SECTION 6.04.  REPORTS BY COMPANY..............................................................38

                                    ARTICLE 7
               REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT

SECTION 7.01.  EVENTS OF DEFAULT...............................................................39
SECTION 7.02.  PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR................................41
SECTION 7.03.  APPLICATION OF MONIES COLLECTED BY TRUSTEE......................................42
SECTION 7.04.  PROCEEDINGS BY DEBENTUREHOLDER..................................................43
SECTION 7.05.  PROCEEDINGS BY TRUSTEE..........................................................44
SECTION 7.06.  REMEDIES CUMULATIVE AND CONTINUING..............................................44
SECTION 7.07.  DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
         DEBENTUREHOLDERS......................................................................45
SECTION 7.08.  NOTICE OF DEFAULTS..............................................................45
SECTION 7.09.  UNDERTAKING TO PAY COSTS........................................................45

                                    ARTICLE 8
                                   THE TRUSTEE

SECTION 8.01.  DUTIES AND RESPONSIBILITIES OF TRUSTEE..........................................46

                                       ii	

SECTION 8.02.  RELIANCE ON DOCUMENTS, OPINIONS, ETC............................................47
SECTION 8.03.  NO RESPONSIBILITY FOR RECITALS, ETC.............................................49
SECTION 8.04.  TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN DEBENTURES.......49
SECTION 8.05.  MONIES TO BE HELD IN TRUST......................................................49
SECTION 8.06.  COMPENSATION AND EXPENSES OF TRUSTEE............................................49
SECTION 8.07.  OFFICERS' CERTIFICATE AS EVIDENCE...............................................50
SECTION 8.08.  CONFLICTING INTERESTS OF TRUSTEE................................................50
SECTION 8.09.  ELIGIBILITY OF TRUSTEE..........................................................50
SECTION 8.10.  RESIGNATION OR REMOVAL OF TRUSTEE...............................................51
SECTION 8.11.  ACCEPTANCE BY SUCCESSOR TRUSTEE.................................................52
SECTION 8.12.  SUCCESSION BY MERGER............................................................53
SECTION 8.13.  PREFERENTIAL COLLECTION OF CLAIMS...............................................53

                                    ARTICLE 9
                              THE DEBENTUREHOLDERS

SECTION 9.01.  ACTION BY DEBENTUREHOLDERS......................................................53
SECTION 9.02.  PROOF OF EXECUTION BY DEBENTUREHOLDERS..........................................54
SECTION 9.03.  WHO ARE DEEMED ABSOLUTE OWNERS..................................................54
SECTION 9.04.  COMPANY-OWNED DEBENTURES DISREGARDED............................................54
SECTION 9.05.  REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND....................................55

                                   ARTICLE 10
                          MEETINGS OF DEBENTUREHOLDERS

SECTION 10.01.  PURPOSE OF MEETINGS............................................................55
SECTION 10.02.  CALL OF MEETINGS BY TRUSTEE....................................................56
SECTION 10.03.  CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS................................56
SECTION 10.04.  QUALIFICATIONS FOR VOTING......................................................56
SECTION 10.05.  REGULATIONS....................................................................57
SECTION 10.06.  VOTING.........................................................................57
SECTION 10.07.  NO DELAY OF RIGHTS BY MEETING..................................................58

                                   ARTICLE 11
                             SUPPLEMENTAL INDENTURES

SECTION 11.01.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTUREHOLDERS....................58
SECTION 11.02.  SUPPLEMENTAL INDENTURE WITH CONSENT OF DEBENTUREHOLDERS........................60
SECTION 11.03.  EFFECT OF SUPPLEMENTAL INDENTURE...............................................61
SECTION 11.04.   NOTATION ON DEBENTURES........................................................61
SECTION 11.05.  EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO
         TRUSTEE...............................................................................61

                                      iii	

                                   ARTICLE 12
                  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 12.01.  COMPANY MAY CONSOLIDATE ON CERTAIN TERMS.......................................61
SECTION 12.02.  SUCCESSOR TO BE SUBSTITUTED....................................................62
SECTION 12.03.  OPINION OF COUNSEL TO BE GIVEN TRUSTEE.........................................63

                                   ARTICLE 13
                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 13.01.  DISCHARGE OF INDENTURE.........................................................63
SECTION 13.02.  DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE................................64
SECTION 13.03.  PAYING AGENT TO REPAY MONIES HELD..............................................64
SECTION 13.04.  RETURN OF UNCLAIMED MONIES.....................................................64
SECTION 13.05.  REINSTATEMENT..................................................................64

                                   ARTICLE 14
            IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 14.01.  INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS..........................65

                                   ARTICLE 15
                            CONVERSION OF DEBENTURES

SECTION 15.01.  RIGHT TO CONVERT...............................................................65
SECTION 15.02.  EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION;
         NO ADJUSTMENT FOR INTEREST OR DIVIDENDS...............................................68
SECTION 15.03.  CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.....................................70
SECTION 15.04.  CONVERSION RATE................................................................70
SECTION 15.05.  ADJUSTMENT OF CONVERSION RATE..................................................70
SECTION 15.06.  EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE......................80
SECTION 15.07.  TAXES ON SHARES ISSUED.........................................................81
SECTION 15.08.  RESERVATION OF SHARES, SHARES TO BE FULLY PAID; COMPLIANCE WITH
         GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK....................................81
SECTION 15.09.  RESPONSIBILITY OF TRUSTEE......................................................82
SECTION 15.10.  NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.....................................83
SECTION 15.11.  FUTURE STOCKHOLDER RIGHTS PLANS................................................83

                                   ARTICLE 16
                            MISCELLANEOUS PROVISIONS

SECTION 16.01.  PROVISIONS BINDING ON COMPANY'S SUCCESSORS.....................................84
SECTION 16.02.  OFFICIAL ACTS BY SUCCESSOR CORPORATION.........................................84
SECTION 16.03.  ADDRESSES FOR NOTICES, ETC.....................................................84
SECTION 16.04.  GOVERNING LAW..................................................................85
SECTION 16.05.  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT, CERTIFICATES TO TRUSTEE......85

                                      iv	

SECTION 16.06.  LEGAL HOLIDAYS.................................................................85
SECTION 16.07.  TRUST INDENTURE ACT............................................................85
SECTION 16.08.  NO SECURITY INTEREST CREATED...................................................86
SECTION 16.09.  BENEFITS OF INDENTURE..........................................................86
SECTION 16.10.  TABLE OF CONTENTS, HEADINGS, ETC...............................................86
SECTION 16.11.  AUTHENTICATING AGENT...........................................................86
SECTION 16.12.  EXECUTION IN COUNTERPARTS......................................................87
SECTION 16.13.  SEVERABILITY...................................................................87
Annex 1                                                                                        93
Exhibit A     Form of Debenture                                                               A-1	

v

INDENTURE
INDENTURE dated as of November 7, 2002 between Aon Corporation, a Delaware corporation (hereinafter called the "COMPANY"), having its principal office at 200 East Randolph Street, Chicago, Illinois 60601, and The Bank of New York, a New York banking corporation, as trustee hereunder (hereinafter called the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its 3 1/2 % Convertible Senior Debentures Due 2012 (hereinafter called the "DEBENTURES"), in an aggregate principal amount not to exceed $300,000,000 and, to provide the terms and conditions upon which the Debentures are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne by the Debentures, a form of assignment, a form of option to elect redemption upon a fundamental change, a form of repurchase notice and a form of conversion notice to be borne by the Debentures are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and to constitute this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Debentures have in all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Debentures by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall

have the respective meanings specified in this Section 1.01. All other terms used in this Indenture that are defined in the Trust Indenture Act or which are by reference therein defined in the Securities Act (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such terms in the Trust Indenture Act and in the Securities Act as in force at the date of the execution of this Indenture. The words "HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The terms defined in this Article include the plural as well as the singular.
"ACCEPTED PURCHASED SHARES" has the meaning specified in Section 15.05(g).
"ADJUSTMENT EVENT" has the meaning specified in Section 15.05(l).
"AGENT MEMBERS" has the meaning specified in Section 2.05(a).
"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. For the purposes of this definition, "CONTROL", when used with respect to any specified Person means the power to direct or cause the direction of 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 the Board of Directors of the Company or a committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to close.
"CLOSING SALE PRICE" of the shares of Common Stock on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the principal United States securities exchange on which shares of Common Stock are traded or, if the shares of Common Stock are not listed on a United States national or regional securities exchange, as reported by the Nasdaq or by the National Quotation Bureau Incorporated. In the absence of such quotations, the Company shall be entitled to determine the Closing Sale Price on the basis it considers appropriate. The Closing Sale Price shall be determined without reference to extended or after hours trading.
2

"COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"COMMON STOCK" means any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which is not subject to redemption by the Company. Subject to the provisions of Section 15.06, however, shares issuable on conversion of Debentures shall include only shares of the class designated as common stock of the Company at the date of this Indenture (namely, the Common Stock, par value $1.00) or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which are not subject to redemption by the Company; PROVIDED that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.
"COMPANY" means the corporation named as the "COMPANY" in the first paragraph of this Indenture, and, subject to the provisions of Article 12 and
Section 15.06, shall include its successors and assigns.
"COMPANY REPURCHASE NOTICE" has the meaning specified in Section 3.07(b).
"COMPANY REPURCHASE NOTICE DATE" has the meaning specified in Section 3.07(b).
"CONTINGENT INTEREST" means interest that accrues and is payable as provided in Article 4.
"CONVERSION PRICE" as of any day will equal $1,000 divided by the Conversion Rate as of such date.
"CONVERSION RATE" has the meaning specified in Section 15.04.
"CORPORATE TRUST OFFICE" or other similar term, means the designated office of the Trustee at which at any particular time its corporate trust business as it relates to this Indenture shall be administered, which office is, at the date as of which this Indenture is dated, located at c/o BNY Midwest Trust Company, 2 North LaSalle Street, Suite 1020, Chicago, IL 60602
3

"CURRENT MARKET PRICE" has the meaning specified in Section 15.05(h).
"CUSTODIAN" means The Bank of New York, as custodian with respect to the Debentures in global form, or any successor entity thereto.
"DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the case may be, authenticated and delivered under this Indenture, including any Global Debenture.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05.
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.
"DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other similar terms (but excluding the term "BENEFICIAL HOLDER"), means any Person in whose name at the time a particular Debenture is registered on the Debenture registrar's books.
"DEFAULT" means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means, the clearing agency registered under the Exchange Act that is designated to act as the Depositary for the Global Debentures. The Depository Trust Company shall be the initial Depositary, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such successor.
"DETERMINATION DATE" has the meaning specified in Section 15.05(l).
"EVENT OF DEFAULT" means any event specified in Section 7.01 as an Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
"EX-DIVIDEND TIME" has the meaning specified in Section 15.01(b).
"EXPIRATION TIME" has the meaning specified in Section 15.05(f).
"FAIR MARKET VALUE" has the meaning specified in Section 15.05(h).
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event in connection with which all or substantially all of the Common Stock shall be exchanged for, converted into, acquired for or constitutes solely the right to receive consideration (whether by means of an exchange offer, liquidation, tender
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offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) which is not all or substantially all common stock that is (or, upon consummation of or immediately following such transaction or event, which will be) listed on a United States national securities exchange or approved (or, upon consummation of or immediately following such transaction or event, which will be approved) for quotation on the Nasdaq National Market or any similar United States system of automated dissemination of quotations of securities prices.
"FUNDAMENTAL CHANGE NOTICE" has the meaning specified in Section 3.05(b).
"FUNDAMENTAL CHANGE EXPIRATION TIME" has the meaning specified in
Section 3.05(b).
"FUNDAMENTAL CHANGE REDEMPTION DATE" has the meaning specified in
Section 3.05(a).
"GLOBAL DEBENTURE" has the meaning specified in Section 2.02.
"INDENTURE" means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"INTEREST" means, when used with reference to the Debentures, any interest payable under the terms of the Debentures, including contingent interest, if any, and Liquidated Damages, if any, payable under the terms of the Registration Rights Agreement.
"LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED DAMAGES AMOUNT" in Section 2(e) of the Registration Rights Agreement.
"LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 5.11.
"MARKET PRICE" has the meaning specified in Section 3.07(a).
"NON-ELECTING SHARE" has the meaning specified in Section 15.06.
"NOTICE DATE" means the date of mailing of the notice of redemption pursuant to Section 3.02.
"OFFER EXPIRATION TIME" has the meaning specified in Section 15.05(g).
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a certificate signed by the Chairman of the Board, the Chief Executive Officer, the President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer, or the Secretary of the Company.
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"OPINION OF COUNSEL" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel reasonably acceptable to the Trustee.
"OPTIONAL REDEMPTION" has the meaning specified in Section 3.02.
"OUTSTANDING", when used with reference to Debentures and subject to the provisions of Section 9.04, means, as of any particular time, all Debentures authenticated and delivered by the Trustee under this Indenture, except:
(a) Debentures theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or (ii) which shall have been otherwise defeased in accordance with Article 13;
(c) Debentures in lieu of which, or in substitution for which, other Debentures shall have been authenticated and delivered pursuant to the terms of
Section 2.06; and
(d) Debentures converted into Common Stock pursuant to Article 15 and Debentures deemed not outstanding pursuant to Article 3.
"PERSON" means a corporation, an association, a partnership, a limited liability company, an individual, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
"PORTAL MARKET" means The Portal Market operated by the National Association of Securities Dealers, Inc. or any successor thereto.
"PREDECESSOR DEBENTURE" of any particular Debenture means every previous Debenture evidencing all or a portion of the same debt as that evidenced by such particular Debenture, and, for the purposes of this definition, any Debenture authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the same debt as the lost, destroyed or stolen Debenture that it replaces.
"PREMIUM" means any premium payable under the terms of the Debentures.
"PRINCIPAL VALUE CONVERSION" has the meaning specified in Section 15.01.
"PURCHASED SHARES" has the meaning specified in Section 15.05(f).
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"QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.
"RECORD DATE" has the meaning specified in Section 15.05(h).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of November 7, 2002, between the Company and the Initial Purchaser, as amended from time to time in accordance with its terms.
"REGULAR CASH DIVIDEND" has the meaning specified in Section 4.01.
"REPURCHASE DATE" has the meaning specified in Section 3.06.
"REPURCHASE NOTICE" has the meaning specified in Section 3.06.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of any familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RIGHTS" has the meaning specified in Section 15.11.
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES" has the meaning specified in Section 15.05(d).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a Subsidiary of the Company that would constitute a "SIGNIFICANT SUBSIDIARY" as such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as in effect on the date of this Indenture.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of capital stock or other equity interest entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or managing general partner of which is such Person or a subsidiary of such Person
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or (b) the only general partners of which are such Person or of one or more subsidiaries of such Person (or any combination thereof).
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest income on a Debenture that must be accrued as original issue discount for United States Federal income tax purposes pursuant to U.S. Treasury Regulation section 1.1275-4.
"TRADING DAY" has the meaning specified in Section 15.05(h).
"TRADING PRICE" means, on any date, the average of the secondary market bid quotations for the Debentures obtained by the Trustee for $10,000,000 principal amount of Debentures at approximately 3:30 p.m., New York City time, on such date from three independent nationally recognized securities dealers selected by the Company; PROVIDED that if at least three such bids cannot reasonably be obtained by the Trustee, but two bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Trustee, one bid shall be used; and provided further that if the Trustee cannot reasonably obtain at least one bid for $10,000,000 principal amount of Debentures from a nationally recognized securities dealer or in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Debentures, then the Trading Price per $1,000 principal amount of Debentures shall be deemed to be less than 95% of the product of (a) the number of shares of Common Stock issuable upon conversion of $1,000 principal amount of Debentures and (b) the Closing Sale Price on such date.
"TRIGGER EVENT" has the meaning specified in Section 15.05(d).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended, as it was in force at the date of this Indenture, except as provided in Sections 11.03 and 15.06; PROVIDED that if the Trust Indenture Act of 1939 is amended after the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939 as so amended.
"TRUSTEE" means The Bank of New York and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
Section 2.01. DESIGNATION AMOUNT AND ISSUE OF DEBENTURES. The Debentures shall be designated as "3 1/2 % CONVERTIBLE SENIOR DEBENTURES DUE
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2012". Debentures not to exceed the aggregate principal amount of $300,000,000 (except pursuant to Sections 2.05, 2.06, 3.03, 3.05 and 15.02 hereof) upon the execution of this Indenture, or from time to time thereafter, may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures to or upon the written order of the Company, signed by its Chairman of the Board, Chief Executive Officer, President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer or the Secretary, without any further action by the Company hereunder.
Section 2.02. FORM OF DEBENTURES. The Debentures and the Trustee's certificate of authentication to be borne by such Debentures shall be substantially in the form set forth in Exhibit A. The terms and provisions contained in the form of Debenture attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.
Any of the Debentures may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required by the Custodian, the Depositary or by the National Association of Securities Dealers, Inc. in order for the Debentures to be tradable on The Portal Market or as may be required for the Debentures to be tradable on any other market developed for trading of securities pursuant to Rule 144A or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Debentures may be listed, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Debentures are subject.
So long as the Debentures are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, or otherwise contemplated by Section 2.05(a), all of the Debentures will be represented by one or more Debentures in global form registered in the name of the Depositary or the nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of beneficial interests in any such Global Debenture shall be effected through the Depositary in accordance with this Indenture and the applicable procedures of the Depositary. Except as provided in Section 2.05(a), beneficial owners of a Global Debenture shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered holders of such Global Debenture.
Any Global Debenture shall represent such of the outstanding Debentures as shall be specified therein and shall provide that it shall represent the aggregate
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amount of outstanding Debentures from time to time endorsed thereon and that the aggregate amount of outstanding Debentures represented thereby may from time to time be increased or reduced to reflect redemptions, repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Debenture to reflect the amount of any increase or decrease in the amount of outstanding Debentures represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the holder of such Debentures in accordance with this Indenture. Payment of principal of and interest and premium, if any, on any Global Debenture shall be made to the holder of such Debenture.
Section 2.03. DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST. The Debentures shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each Debenture shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Debenture attached as Exhibit A hereto. Interest on the Debentures shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture) is registered on the Debenture register at the close of business on any record date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date, except that the interest payable upon redemption or repurchase will be payable to the Person to whom principal is payable pursuant to such redemption or repurchase (unless the redemption date or the Repurchase Date, as the case may be, is an interest payment date, in which case the semi-annual payment of interest becoming due on such date shall be payable to the holders of such Debentures registered as such on the applicable record date). Notwithstanding the foregoing, if any Debenture (or portion thereof) is converted into Common Stock during the period after a record date for the payment of interest to, but excluding, the next succeeding interest payment date and such Debenture (or portion thereof) has been called or tendered for redemption on a redemption date which occurs during such period, the Company shall not be required to pay interest on such interest payment date in respect of any such Debenture (or portion thereof). Interest shall be payable at the office of the Company maintained by the Company for such purposes in the Borough of Manhattan, City of New York, which shall initially be an office or agency of the Trustee. The Company shall pay interest (i) on any Debentures in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Debenture register or (ii) on any Global Debenture by wire transfer of immediately available funds to the account of the Depositary or its nominee. The term "RECORD DATE" with respect to any interest payment date shall mean the May 1 or November 1 preceding the applicable May 15 or November 15 interest payment date, respectively.
Any interest on any Debenture which is payable, but is not punctually paid or duly provided for, on any May 15 or November 15 (herein called "DEFAULTED
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INTEREST") shall forthwith cease to be payable to the Debentureholder on the relevant record date by virtue of his having been such Debentureholder, and such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Debentures (or their respective Predecessor Debentures) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Debenture and the date of the proposed payment (which shall be not less than twenty-five (25) days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment, and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first-class postage prepaid, to each holder at his address as it appears in the Debenture register, not less than ten (10) days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Debentures (or their respective Predecessor Debentures) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (2) of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Debentures may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Section 2.04. EXECUTION OF DEBENTURES. The Debentures shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman of the Board, Chief Executive Officer, President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "VICE PRESIDENT") and attested by the manual or
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facsimile signature of its Secretary or any of its Assistant Secretaries or its Treasurer or any of its Assistant Treasurers (which may be printed, engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Debenture attached as Exhibit A hereto, manually executed by the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 16.11), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Debenture executed by the Company shall be conclusive evidence that the Debenture so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Debentures shall cease to be such officer before the Debentures so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Debentures nevertheless may be authenticated and delivered or disposed of as though the person who signed such Debentures had not ceased to be such officer of the Company, and any Debenture may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Debenture, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.
Section 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES; RESTRICTIONS ON TRANSFER. (a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office and in any other office or agency of the Company designated pursuant to Section 5.02 being herein sometimes collectively referred to as the "DEBENTURE REGISTER") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Debentures and of transfers of Debentures. The Debenture register shall be in written form or in any form capable of being converted into written form within a reasonably prompt period of time. The Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering Debentures and transfers of Debentures as herein provided. The Company may appoint one or more co-registrars in accordance with Section 5.02.
Upon surrender for registration of transfer of any Debenture to the Debenture registrar or any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Debentures of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized denominations and of a like aggregate principal amount, upon surrender of the Debentures to be exchanged at any such office or agency maintained by the
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Company pursuant to Section 5.02. Whenever any Debentures are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Debentures which the Debentureholder making the exchange is entitled to receive bearing registration numbers not contemporaneously outstanding.
All Debentures issued upon any registration of transfer or exchange of Debentures shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Debentures surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or for exchange, redemption, repurchase or conversion shall (if so required by the Company or the Debenture registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company, and the Debentures shall be duly executed by the Debentureholder thereof or his attorney duly authorized in writing.
No service charge shall be made to any holder for any registration of, transfer or exchange of Debentures, but the Company may require payment by the holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture registrar shall be required to exchange or register a transfer of (a) any Debentures for a period of fifteen (15) days next preceding any selection of Debentures to be redeemed, (b) any Debentures or portions thereof called for redemption pursuant to Section 3.02 (c) any Debentures or portions thereof surrendered for conversion pursuant to Article 15, (d) any Debentures or portions thereof tendered for redemption (and not withdrawn) pursuant to Section 3.05 or (e) any Debentures or portions thereof tendered for repurchase (and not withdrawn) pursuant to Section 3.06.
(b) The following provisions shall apply only to Global Debentures:
(i) Each Global Debenture authenticated under this Indenture shall be registered in the name of the Depositary or a nominee thereof and delivered to such Depositary or a nominee thereof or Custodian therefor, and each such Global Debenture shall constitute a single Debenture for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture, no Global Debenture may be exchanged in whole or in part for Debentures registered, and no transfer of a Global Debenture in whole or in part may be registered, in the name of any Person other than the Depositary or a nominee thereof unless (A) the Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global
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Debenture and a successor depositary has not been appointed by the Company within ninety days or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) an Event of Default has occurred and is continuing or (C) the Company, in its sole discretion, notifies the Trustee in writing that it no longer wishes to have all the Debentures represented by Global Debentures. Any Global Debenture exchanged pursuant to clause (A) or (B) above shall be so exchanged in whole and not in part and any Global Debenture exchanged pursuant to clause (C) above may be exchanged in whole or from time to time in part as directed by the Company. Any Debenture issued in exchange for a Global Debenture or any portion thereof shall be a Global Debenture; PROVIDED that any such Debenture so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Debenture.
(iii) Securities issued in exchange for a Global Debenture or any portion thereof pursuant to clause (ii) above shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Debenture or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear any legends required hereunder. Any Global Debenture to be exchanged in whole shall be surrendered by the Depositary to the Trustee, as Debenture registrar. With regard to any Global Debenture to be exchanged in part, either such Global Debenture shall be so surrendered for exchange or, if the Trustee is acting as Custodian for the Depositary or its nominee with respect to such Global Debenture, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Debenture issuable on such exchange to or upon the written order of the Depositary or an authorized representative thereof.
(iv) In the event of the occurrence of any of the events specified in clause (ii) above, the Company will promptly make available to the Trustee a reasonable supply of certificated Debentures in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Debenture registered in the name of the Depositary or any nominee thereof, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Debenture for all purposes whatsoever. Notwithstanding the foregoing,
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nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Debenture.
(vi) At such time as all interests in a Global Debenture have been redeemed, repurchased, converted, canceled or exchanged for Debentures in certificated form, such Global Debenture shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Debenture is redeemed, repurchased, converted, canceled or exchanged for Debentures in certificated form, the principal amount of such Global Debenture shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced, and an endorsement shall be made on such Global Debenture, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction.
(c) Every Debenture that bears or is required under this Section 2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any Common Stock issued upon conversion of the Debentures and required to bear the legend set forth in Section 2.05(c), collectively, the "RESTRICTED SECURITIES") shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions on transfer shall be waived by written consent of the Company, and the holder of each such Restricted Security, by such Debenture holder's acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in Section 2.05(c) and 2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan, transfer or other disposition whatsoever of any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), any certificate evidencing such Debenture (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.05(c), if applicable) shall bear a legend in substantially the following form, unless such Debenture has been sold pursuant to a registration statement that has been declared effective under the Securities Act (and which continues to be effective at the time of such transfer), or unless otherwise agreed by the Company in writing, with written notice thereof to the Trustee:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
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(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE EXCEPT (A) TO AON CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(2)(D) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS DEBENTURE PURSUANT TO CLAUSE (2)(D) ABOVE OR UPON ANY TRANSFER OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTION.
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS NOVEMBER 7, 2002 AND THE COMPARABLE YIELD IS 9.1%, COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
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DEBENTURE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: AON CORPORATION, CORPORATE SECRETARY, 200 EAST RANDOLPH STREET, CHICAGO, ILLINOIS 60601.
Any Debenture (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms or as to conditions for removal of the foregoing legend set forth therein have been satisfied may, upon surrender of such Debenture for exchange to the Debenture registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Debenture or Debentures, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.05(c). If the Restricted Security surrendered for exchange is represented by a Global Debenture bearing the legend set forth in this Section 2.05(c), the principal amount of the legended Global Debenture shall be reduced by the appropriate principal amount and the principal amount of a Global Debenture without the legend set forth in this Section 2.05(c) shall be increased by an equal principal amount. If a Global Debenture without the legend set forth in this Section 2.05(c) is not then outstanding, the Company shall execute and the Trustee shall authenticate and deliver an unlegended Global Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), any stock certificate representing Common Stock issued upon conversion of any Debenture shall bear a legend in substantially the following form, unless such Common Stock has been sold pursuant to a registration statement that has been declared effective under the Securities Act (and which continues to be effective at the time of such transfer) or such Common Stock has been issued upon conversion of Debentures that have been transferred pursuant to a registration statement that has been declared effective under the Securities Act, or unless otherwise agreed by the Company in writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO AON CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
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RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE), IT WILL FURNISH TO EQUISERVE N.A., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE (1)(D) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
Any such Common Stock as to which such restrictions on transfer shall have expired in accordance with their terms or as to which the conditions for removal of the foregoing legend set forth therein have been satisfied may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).
(e) Any Debenture or Common Stock issued upon the conversion of a Debenture that, prior to the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), is purchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction which results in such Debentures or Common Stock, as the case may be, no longer being "RESTRICTED SECURITIES" (as defined under Rule 144).
Section 2.06. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case any Debenture shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request the Trustee or an authenticating agent appointed by the Trustee shall authenticate and make
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available for delivery, a new Debenture, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debenture, or in lieu of and in substitution for the Debenture so destroyed, lost or stolen. In every case, the applicant for a substituted Debenture shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the case may be, of satisfactory security or indemnity and evidence, as described in the preceding paragraph, the Trustee or such authenticating agent may authenticate any such substituted Debenture and make available for delivery such Debenture. Upon the issuance of any substituted Debenture, the Company may require the payment by the holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debenture which has matured or is about to mature or has been called for redemption or has been tendered for redemption upon a Fundamental Change (and not withdrawn) or has been surrendered for repurchase on a Repurchase Date (and not withdrawn) or is to be converted into Common Stock shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debenture, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Debenture), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or in connection with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, the Trustee and, if applicable, any paying agent or conversion agent evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debenture shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Debentures duly issued hereunder. To the extent permitted by law, all Debentures shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion or redemption or repurchase of mutilated, destroyed, lost or stolen Debentures and shall preclude
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any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion or redemption or repurchase of negotiable instruments or other securities without their surrender.
Section 2.07. TEMPORARY DEBENTURES. Pending the preparation of Debentures in certificated form, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon the written request of the Company, authenticate and deliver temporary Debentures (printed or lithographed). Temporary Debentures shall be issuable in any authorized denomination, and substantially in the form of the Debentures in certificated form, but with such omissions, insertions and variations as may be appropriate for temporary Debentures, all as may be determined by the Company. Every such temporary Debenture shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Debentures in certificated form. Without unreasonable delay, the Company will execute and deliver to the Trustee or such authenticating agent Debentures in certificated form and thereupon any or all temporary Debentures may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 5.02 and the Trustee or such authenticating agent shall authenticate and make available for delivery in exchange for such temporary Debentures an equal aggregate principal amount of Debentures in certificated form. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Debentures shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Debentures in certificated form authenticated and delivered hereunder.
Section 2.08. CANCELLATION OF DEBENTURES. All Debentures surrendered for the purpose of payment, redemption, repurchase, conversion, exchange or registration of transfer shall, if surrendered to the Company or any paying agent or any Debenture registrar or any conversion agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Debentures shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of such canceled Debentures in accordance with its customary procedures. If the Company shall acquire any of the Debentures, such acquisition shall not operate as a redemption, repurchase or satisfaction of the indebtedness represented by such Debentures unless and until the same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP NUMBERS. The Company in issuing the Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Debentureholders; PROVIDED that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Debentures or as contained in any notice of a redemption and that reliance may be placed only
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on the other identification numbers printed on the Debentures, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. REDEMPTION OF DEBENTURES. Except as otherwise provided in
Section 3.05, the Company may not redeem any Debentures prior to November 19, 2007. At any time on or after November 19, 2007 and prior to maturity, the Debentures may be redeemed at the option of the Company, in whole or in part, upon notice as set forth in Section 3.02, at the redemption prices set forth in the form of Debenture attached as Exhibit A hereto, together with accrued and unpaid interest, if any, to, but excluding the date fixed for redemption.
Section 3.02. NOTICE OF OPTIONAL REDEMPTION; SELECTION OF DEBENTURES. In case the Company shall desire to exercise the right to redeem all or, as the case may be, any part of the Debentures pursuant to Section 3.01, it shall fix a date for redemption and it or, at its written request received by the Trustee not fewer than forty-five (45) days prior (or such shorter period of time as may be acceptable to the Trustee) to the date fixed for redemption, the Trustee in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption not fewer than thirty (30) nor more than sixty (60) days prior to the redemption date to each holder of Debentures so to be redeemed as a whole or in part at its last address as the same appears on the Debenture register; PROVIDED that if the Company shall give such notice, it shall also give written notice of the redemption date to the Trustee. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Debenture designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Debenture. Concurrently with the mailing of any such notice of redemption, the Company shall issue a press release announcing such redemption, the form and content of which press release shall be determined by the Company in its sole discretion. The failure to issue any such press release or any defect therein shall not affect the validity of the redemption notice or any of the proceedings for the redemption of any Debenture called for redemption.
Each such notice of redemption shall specify the aggregate principal amount of Debentures to be redeemed, the CUSIP number or numbers of the Debentures being redeemed, the date fixed for redemption (which shall be a Business Day), the redemption price at which Debentures are to be redeemed, the place or places of payment, that payment will be made upon presentation and
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surrender of such Debentures, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon or on the portion thereof to be redeemed will cease to accrue. Such notice shall also state the current Conversion Rate and the date on which the right to convert such Debentures or portions thereof into Common Stock will expire. If fewer than all the Debentures are to be redeemed, the notice of redemption shall identify the Debentures to be redeemed (including CUSIP numbers, if any). In case any Debenture is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that, on and after the redemption date, upon surrender of such Debenture, a new Debenture or Debentures in principal amount equal to the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption given as provided in this Section 3.02, the Company will deposit with the Trustee or with one or more paying agents (or, if the Company is acting as its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of money in immediately available funds sufficient to redeem on the redemption date all the Debentures (or portions thereof) so called for redemption (other than those theretofore surrendered for conversion into Common Stock) at the appropriate redemption price, together with accrued interest to, but excluding, the redemption date; PROVIDED that if such payment is made on the redemption date it must be received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time on such date. The Company shall be entitled to retain any interest, yield or gain on amounts deposited with the Trustee or any paying agent pursuant to this Section 3.02 in excess of amounts required hereunder to pay the redemption price and accrued interest to, but excluding, the redemption date. If any Debenture called for redemption is converted pursuant hereto prior to such redemption date, any money deposited with the Trustee or any paying agent or so segregated and held in trust for the redemption of such Debenture shall be paid to the Company upon its written request, or, if then held by the Company, shall be discharged from such trust. Whenever any Debentures are to be redeemed, the Company will give the Trustee written notice in the form of an Officers' Certificate not fewer than forty-five (45) days (or such shorter period of time as may be acceptable to the Trustee) prior to the redemption date as to the aggregate principal amount of Debentures to be redeemed.
If less than all of the outstanding Debentures are to be redeemed, the Trustee shall select the Debentures or portions thereof of the Global Debenture or the Debentures in certificated form to be redeemed (in principal amounts of $1,000 or multiples thereof) by lot, on a pro rata basis or by another method the Trustee deems fair and appropriate. If any Debenture selected for partial redemption is submitted for conversion in part after such selection, the portion of such Debenture submitted for conversion shall be deemed (so far as may be possible) to be the portion to be selected for redemption. The Debentures (or portions thereof) so selected shall be deemed duly selected for redemption for all
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purposes hereof, notwithstanding that any such Debenture is submitted for conversion in part before the mailing of the notice of redemption.
Upon any redemption of less than all of the outstanding Debentures, the Company and the Trustee may (but need not), solely for purposes of determining the pro rata allocation among such Debentures as are unconverted and outstanding at the time of redemption, treat as outstanding any Debentures surrendered for conversion during the period of fifteen (15) days next preceding the mailing of a notice of redemption and may (but need not) treat as outstanding any Debenture authenticated and delivered during such period in exchange for the unconverted portion of any Debenture converted in part during such period.
Section 3.03. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION BY THE COMPANY. If notice of redemption has been given as provided in Section 3.02, the Debentures or portion of Debentures with respect to which such notice has been given shall, unless converted into Common Stock pursuant to the terms hereof, become due and payable on the date fixed for redemption and at the place or places stated in such notice at the applicable redemption price, together with interest accrued to (but excluding) the redemption date, and on and after said date (unless the Company shall default in the payment of such Debentures at the redemption price, together with interest accrued to said date) interest on the Debentures or portion of Debentures so called for redemption shall cease to accrue and, after the close of business on the Business Day immediately preceding the redemption date (unless the Company shall default in the payment of such Debentures at the redemption price, together with interest accrued to said date) such Debentures shall cease to be convertible into Common Stock and, except as provided in Section 8.05 and 13.04, to be entitled to any benefit or security under this Indenture, and the holders thereof shall have no right in respect of such Debentures except the right to receive the redemption price thereof and unpaid interest to (but excluding) the redemption date. On presentation and surrender of such Debentures at a place of payment in said notice specified, the said Debentures or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with interest accrued thereon to, but excluding, the redemption date; PROVIDED that if the applicable redemption date is an interest payment date, the interest payable on such interest payment date shall be payable to the holders of record of such Debentures on the applicable record date instead of the holders surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the Company, a new Debenture or Debentures, of authorized denominations, in principal amount equal to the unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Debentures or mail any notice of redemption during the continuance of a default
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in payment of interest or premium, if any, on the Debentures. If any Debenture called for redemption shall not be so paid upon surrender thereof for redemption, the principal and premium, if any, shall, until paid or duly provided for, bear interest from the redemption date at a rate equal to 1% per annum plus the rate borne by the Debenture and such Debenture shall remain convertible into Common Stock until the principal and premium, if any, and interest shall have been paid or duly provided for.
Section 3.04. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection with any redemption of Debentures, the Company may arrange for the purchase and conversion of any Debentures by an agreement with one or more investment banks or other purchasers to purchase such Debentures by paying to the Trustee in trust for the Debentureholders, on or before the date fixed for redemption, an amount not less than the applicable redemption price, together with interest accrued to, but excluding, the date fixed for redemption, of such Debentures. Notwithstanding anything to the contrary contained in this Article 3, the obligation of the Company to pay the redemption price of such Debentures, together with interest accrued to, but excluding, the date fixed for redemption, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, a copy of which will be filed with the Trustee prior to the date fixed for redemption, any Debentures not duly surrendered for conversion by the holders thereof may, at the option of the Company, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such holders and (notwithstanding anything to the contrary contained in Article 15) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the date fixed for redemption (and the right to convert any such Debentures shall be extended through such time), subject to payment of the above amount as aforesaid. At the direction of the Company, the Trustee shall hold and dispose of any such amount paid to it in the same manner as it would monies deposited with it by the Company for the redemption of Debentures. Without the Trustee's prior written consent, no arrangement between the Company and such purchasers for the purchase and conversion of any Debentures shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this Indenture.
Section 3.05. REDEMPTION AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE. (a) If there shall occur a Fundamental Change at any time prior to maturity of the Debentures, then each Debentureholder shall have the right, at such holder's option, to require the Company to redeem all of such holder's Debentures, or any portion thereof that is a multiple of $1,000 principal amount, on the date (the "FUNDAMENTAL CHANGE REDEMPTION DATE") that is thirty
(30) days after the date of the Fundamental Change Notice (as defined in Section 3.05(b)) of such Fundamental Change (or, if such 30th day is not a Business Day, the next succeeding Business Day) at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to, but excluding, the
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Fundamental Change Redemption Date; PROVIDED that if such Fundamental Change Redemption Date is an interest payment date, then the interest payable on such interest payment date shall be paid to the holders of record of the Debentures on the applicable record date instead of the holders surrendering the Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company shall execute and, upon the Company's written direction to the Trustee, the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the Company, a new Debenture or Debentures, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Debentures presented.
(b) On or before the tenth day after the occurrence of a Fundamental Change, the Company or at its written request (which must be received by the Trustee at least five (5) Business Days prior to the date the Trustee is requested to give notice as described below, unless the Trustee shall agree in writing to a shorter period), the Trustee, in the name of and at the expense of the Company, shall mail or cause to be mailed to all holders of record on the date of the Fundamental Change a notice (the "FUNDAMENTAL CHANGE NOTICE") of the occurrence of such Fundamental Change and of the redemption right at the option of the holders arising as a result thereof. Such notice shall be mailed in the manner and with the effect set forth in the first paragraph of Section 3.02 (without regard for the time limits set forth therein). If the Company shall give such notice, the Company shall also deliver a copy of the Fundamental Change Company Notice to the Trustee at such time as it is mailed to Debentureholders. Concurrently with the mailing of any Fundamental Change Notice, the Company shall issue a press release announcing such Fundamental Change referred to in the Fundamental Change Notice, the form and content of which press release shall be determined by the Company in its sole discretion. The failure to issue any such press release or any defect therein shall not affect the validity of the Fundamental Change Notice or any proceedings for the redemption of any Debenture which any Debentureholder may elect to have the Company redeem as provided in this Section 3.05.
Each Fundamental Change Notice shall specify the circumstances constituting the Fundamental Change, the Fundamental Change Redemption Date, the price at which the Company shall be obligated to redeem Debentures, that the holder must exercise the redemption right on or prior to the close of business on the Fundamental Change Redemption Date (the "FUNDAMENTAL CHANGE EXPIRATION TIME"), that the holder shall have the right to withdraw any Debentures surrendered prior to the Fundamental Change Expiration Time, a description of the procedure which a Debentureholder must follow to exercise such redemption right and to withdraw any surrendered Debentures, the place or places where the holder is to surrender such holder's Debentures, the amount of interest accrued on each Debenture to the Fundamental Change Redemption Date and the CUSIP number or numbers of the Debentures (if then generally in use).
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No failure of the Company to give the foregoing notices and no defect therein shall limit the Debentureholders' redemption rights or affect the validity of the proceedings for the redemption of the Debentures pursuant to this Section 3.05.
(c) For a Debenture, other than a Global Debenture to be so redeemed at the option of the holder, the Company must receive at the office or agency of the Company maintained for that purpose or, at the option of such holder, the Corporate Trust Office, such Debenture with the form entitled "OPTION TO ELECT REPAYMENT UPON A FUNDAMENTAL CHANGE" on the reverse thereof duly completed, together with such Debentures duly endorsed for transfer, on or before the Fundamental Change Expiration Time. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Debenture for redemption shall be determined by the Company, whose determination shall be final and binding absent manifest error.
(d) On or prior to the Fundamental Change Redemption Date, the Company will deposit with the Trustee or with one or more paying agents (or, if the Company is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 5.04) an amount of money sufficient to redeem on the Fundamental Change Redemption Date all the Debentures to be redeemed on such date at the appropriate redemption price, together with accrued interest to, but excluding, the Fundamental Change Redemption Date; PROVIDED that if such payment is made on the Fundamental Change Redemption Date it must be received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time, on such date. Payment for Debentures surrendered for redemption (and not withdrawn) prior to the Fundamental Change Expiration Time will be made promptly (but in no event more than five (5) Business Days) following the Repurchase Date by mailing checks for the amount payable to the holders of such Debentures entitled thereto as they shall appear in the Debenture register.
(e) In the case of a reclassification, change, consolidation, merger, combination, sale or conveyance to which Section 15.06 applies, in which the Common Stock of the Company is changed or exchanged as a result into the right to receive stock, securities or other property or assets (including cash), which includes shares of Common Stock of the Company or shares of common stock of another Person that are, or upon issuance will be, traded on a United States national securities exchange or approved for trading on an established automated over-the-counter trading market in the United States and such shares constitute at the time such change or exchange becomes effective in excess of 50% of the aggregate fair market value of such stock, securities or other property or assets (including cash) (as determined by the Company, which determination shall be conclusive and binding), then the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such supplemental indenture complies with the Trust Indenture Act as in force at the date of execution of such supplemental
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indenture) modifying the provisions of this Indenture relating to the right of holders of the Debentures to cause the Company to repurchase the Debentures following a Fundamental Change, including without limitation the applicable provisions of this Section 3.05 and the definitions of Common Stock and Fundamental Change, as appropriate, as determined in good faith by the Company (which determination shall be conclusive and binding), to make such provisions apply to such other Person if different from the Company and the common stock issued by such Person (in lieu of the Company and the Common Stock of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act to the extent then applicable in connection with the redemption rights of the holders of Debentures in the event of a Fundamental Change.
Section 3.06. REPURCHASE OF DEBENTURES BY THE COMPANY AT OPTION OF THE HOLDER. Debentures shall be purchased by the Company pursuant to the terms of the Debentures at the option of the holder on November 15, 2009 (the "REPURCHASE DATE"), at a purchase price of 100% of the principal amount, plus any accrued and unpaid interest to, but excluding, the Repurchase Date, subject to the provisions of Section 3.07(a). Repurchases of Debentures under this Section 3.06 shall be made, at the option of the holder thereof, upon:
(a) delivery to the Trustee (or other paying agent appointed by the Company) by a holder of a duly completed notice (the "REPURCHASE NOTICE") in the form set forth on the reverse of the Debenture during the period beginning at any time from the opening of business on the date that is 20 Business Days prior to the Repurchase Date until the close of business on the Repurchase Date; and
(b) delivery or book-entry transfer of the Debentures to the Trustee (or other paying agent appointed by the Company) at any time after delivery of the Repurchase Notice (together with all necessary endorsements) at the Corporate Trust Office of the Trustee (or other paying agent appointed by the Company) in the Borough of Manhattan as provided in Section 5.02, such delivery being a condition to receipt by the holder of the purchase price therefor; PROVIDED that such purchase price shall be so paid pursuant to this Section 3.06 only if the Debenture so delivered to the Trustee (or other paying agent appointed by the Company) shall conform in all respects to the description thereof in the related Repurchase Notice.
The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Debenture, if the principal amount of such portion is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to the purchase of all of a Debenture also apply to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions of this Section 3.06 shall be consummated by the delivery of the consideration to be received by the holder promptly following the later of the Repurchase Date and the time of the book-entry transfer or delivery of the Debenture.
Notwithstanding anything herein to the contrary, any holder delivering to the Trustee (or other paying agent appointed by the Company) the Repurchase Notice contemplated by this Section 3.06 shall have the right to withdraw such Repurchase Notice at any time prior to the close of business on the Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or other paying agent appointed by the Company) in accordance with Section 3.08.
The Trustee (or other paying agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Repurchase Notice or written notice of withdrawal thereof.
Section 3.07. COMPANY REPURCHASE NOTICE.
(a) The Debentures to be repurchased on the Repurchase Date pursuant to
Section 3.06 will be paid for in cash.
At least three Business Days before the Company Repurchase Notice Date, the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the information required by Section 3.07(b) in the Company Repurchase Notice, and
(ii) whether the Company desires the Trustee to give the Company Repurchase Notice required by Section 3.07(b).
(b) In connection with any repurchase of Debentures, the Company shall, no less than 20 Business Days prior to each Repurchase Date (the "COMPANY REPURCHASE NOTICE DATE"), give notice to holders at their addresses shown in the Debenture Register setting forth information specified in this Section 3.07(b) (the "COMPANY REPURCHASE NOTICE"). The Company will also give notice to beneficial owners as required by applicable law.
Each Company Repurchase Notice shall:
(1) state the repurchase price and the Repurchase Date to which the Company Repurchase Notice relates;
(2) include a form of Repurchase Notice;
(3) state the name and address of the Trustee (or other paying agent or conversion agent appointed by the Company);
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(4) state that Debentures must be surrendered to the Trustee (or other paying agent appointed by the Company) to collect the purchase price;
(5) if the Debentures are then convertible, state that Debentures as to which a Repurchase Notice has been given may be converted only if the Repurchase Notice is withdrawn in accordance with the terms of this Indenture; and
(6) state the CUSIP number of the Debentures.
Company Repurchase Notices may be given by the Company or, at the Company's request, the Trustee shall give such Company Repurchase Notice in the Company's name and at the Company's expense.
(c) The Company will comply with the provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act to the extent then applicable in connection with the repurchase rights of the holders of Debentures.
Section 3.08. EFFECT OF REPURCHASE NOTICE. Upon receipt by the Trustee (or other paying agent appointed by the Company) of the Repurchase Notice specified in Section 3.06, the holder of the Debenture in respect of which such Repurchase Notice was given shall (unless such Repurchase Notice is validly withdrawn) thereafter be entitled to receive solely the purchase price with respect to such Debenture. Such purchase price shall be paid to such holder, subject to receipt of funds and/or Debentures by the Trustee (or other paying agent appointed by the Company), promptly following the later of (x) the Repurchase Date with respect to such Debenture (provided the holder has satisfied the conditions in Section 3.06) and (y) the time of delivery of such Debenture to the Trustee (or other paying agent appointed by the Company) by the holder thereof in the manner required by Section 3.06. Debentures in respect of which a Repurchase Notice has been given by the holder thereof may not be converted pursuant to Article 15 hereof on or after the date of the delivery of such Repurchase Notice unless such Repurchase Notice has first been validly withdrawn.
A Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Trustee (or other paying agent appointed by the Company) in accordance with the Repurchase Notice at any time prior to the close of business on the Repurchase Date, specifying:
(a) the certificate number, if any, of the Debenture in respect of which such notice of withdrawal is being submitted, or the appropriate Depositary information if the Debenture in respect of which such notice of withdrawal is being submitted is represented by a Global Debenture,
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(b) the principal amount of the Debenture with respect to which such notice of withdrawal is being submitted, and
(c) the principal amount, if any, of such Debenture which remains subject to the original Repurchase Notice and which has been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Repurchase Notice may be in the form set forth in the preceding paragraph or may be in the form of a conditional withdrawal contained in a Repurchase Notice pursuant to the terms of Section 3.06(a).
Section 3.09. DEPOSIT OF PURCHASE PRICE. (a) Prior to 10:00 a.m. (New York City Time) on the Business Day following the Repurchase Date, the Company shall deposit with the Trustee (or other paying agent appointed by the Company; or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the paying agent, shall segregate and hold in trust as provided in Section 5.04) an amount of cash (in immediately available funds if deposited on such Business Day), sufficient to pay the aggregate purchase price of all the Debentures or portions thereof that are to be purchased as of the Repurchase Date.
(b) If the Trustee or other paying agent appointed by the Company, or the Company or a Subsidiary or Affiliate of either of them, if such entity is acting as the paying agent, holds cash sufficient to pay the aggregate purchase price of all the Debentures, or portions thereof that are to be purchased as of the Repurchase Date, on or after the Repurchase Date (i) the Debentures will cease to be outstanding, (ii) interest on the Debentures will cease to accrue, and (iii) all other rights of the holders of such Debentures will terminate, whether or not book-entry transfer of the Debentures has been made or the Debentures have been delivered to the Trustee or paying agent, other than the right to receive the repurchase price upon delivery of the Debentures.
Section 3.10. DEBENTURES REPURCHASED IN PART. Upon presentation of any Debenture repurchased only in part, the Company shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the Company, a new Debenture or Debentures, of any authorized denomination, in aggregate principal amount equal to the unrepurchased portion of the Debentures presented.
Section 3.11. REPAYMENT TO THE COMPANY. The Trustee (or other paying agent appointed by the Company) shall return to the Company any cash that remains unclaimed as provided in Section 12 of the Debentures, together with interest, if any, thereon, held by them for the payment of the purchase price; PROVIDED that to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.09 exceeds the aggregate purchase price of the Debentures or portions thereof which the Company is obligated to purchase as of the Repurchase Date then, unless otherwise agreed in writing with the Company,
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promptly after the Business Day following the Repurchase Date, the Trustee shall return any such excess to the Company together with interest, if any, thereon.
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. CONTINGENT INTEREST. Beginning with the six-month interest period commencing November 15, 2007, the Company will pay contingent interest during a six month interest period if the Trading Price for each of the five Trading Days immediately preceding the first day of the applicable six-month interest period equals or exceeds 120% of the principal amount of the Debentures; PROVIDED that if the Company should declare a dividend on the Common Stock for which the record date falls prior to the first day of a six-month interest period, but the payment date for such dividend falls within such six-month interest period, then the five Trading Day measuring period shall be the five Trading Day period immediately preceding the dividend record date. During any six-month interest period when contingent interest is payable, the contingent interest payable on each $1,000 principal amount of Debenture shall equal the greater of (1) 0.25% of the average Trading Price for $1,000 principal amount of Debentures during the five Trading Day measuring period immediately preceding the beginning of applicable six-month interest period used to determine whether contingent interest must be paid or (2) the sum of all Regular Cash Dividends paid by the Company per share on the Common Stock during the applicable six-month interest period multiplied by the number of shares of Common Stock issuable upon conversion of a $1,000 principal amount Debentures at the then applicable Conversion Rate on the payment date for each such Regular Cash Dividend.
"REGULAR CASH DIVIDEND" means quarterly or other periodic cash dividends paid on the Common Stock as declared by the Board of Directors in accordance with the Company's cash dividend policy in effect from time to time and shall exclude any cash dividend determined by the Board of Directors to be extraordinary, special or nonrecurring, such determination to be conclusive.
Section 4.02. PAYMENT OF CONTINGENT INTEREST. Contingent interest for any six-month interest period shall be paid on the last day of any six month interest period to the Person in whose name any Debenture (or its Predecessor Debenture) is registered on the Debenture register at the close of business on the day immediately preceding such day. Contingent interest due under this Article 4 shall be treated for all purposes of this Indenture like any other interest accruing on the Debentures.
Section 4.03. CONTINGENT INTEREST NOTIFICATION. By the first Business Day of a six-month interest period during which contingent interest will be paid, the Company will disseminate a press release through Dow Jones & Company, Inc. or Bloomberg Business News stating that contingent interest will be paid on the Debentures and identifying the six month interest period.
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ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and premium, if any (including the redemption price upon redemption or the purchase price upon repurchase, in each case pursuant to Article 3), and interest, on each of the Debentures at the places, at the respective times and in the manner provided herein and in the Debentures.
Section 5.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain an office or agency in the Borough of Manhattan, the City of New York, where the Debentures may be surrendered for registration of transfer or exchange or for presentation for payment or for conversion, redemption or repurchase and where notices and demands to or upon the Company in respect of the Debentures and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the corporate trust office of the Trustee in The Borough of Manhattan which office is located at 101 Barclay Street, Floor 21W, New York, NY 10286.
The Company may also from time to time designate co-registrars and one or more offices or agencies where the Debentures may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company will give prompt written notice of any such designation or rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Debenture registrar, Custodian and conversion agent and each of the Corporate Trust Office and the office of agency of the Trustee in The Borough of Manhattan, shall be considered as one such office or agency of the Company for each of the aforesaid purposes.
So long as the Trustee is the Debenture registrar, the Trustee agrees to mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the third paragraph of Section 8.11. If co-registrars have been appointed in accordance with this Section, the Trustee shall mail such notices only to the Company and the holders of Debentures it can identify from its records.
Section 5.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so that there shall at all times be a Trustee hereunder.
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Section 5.04. PROVISIONS AS TO PAYING AGENT. (a) If the Company shall appoint a paying agent other than the Trustee, or if the Trustee shall appoint such a paying agent, the Company will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, or interest on the Debentures (whether such sums have been paid to it by the Company or by any other obligor on the Debentures) in trust for the benefit of the holders of the Debentures;
(2) that it will give the Trustee notice of any failure by the Company (or by any other obligor on the Debentures) to make any payment of the principal of and premium, if any, or interest on the Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of, premium, if any, or interest on the Debentures, deposit with the paying agent a sum (in funds which are immediately available on the due date for such payment) sufficient to pay such principal, premium, if any, or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; PROVIDED that if such deposit is made on the due date, such deposit shall be received by the paying agent by 10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or before each due date of the principal of, premium, if any, or interest on the Debentures, set aside, segregate and hold in trust for the benefit of the holders of the Debentures a sum sufficient to pay such principal, premium, if any, or interest so becoming due and will promptly notify the Trustee of any failure to take such action and of any failure by the Company (or any other obligor under the Debentures) to make any payment of the principal of, premium, if any, or interest on the Debentures when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any paying agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability with respect to such sums.
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(d) Anything in this Section 5.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.04 is subject to Sections 13.03 and 13.04.
The Trustee shall not be responsible for the actions of any other paying agents (including the Company if acting as its own paying agent) and shall have no control of any funds held by such other paying agents.
Section 5.05. EXISTENCE. Subject to Article 12, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and rights (charter and statutory); PROVIDED that the Company shall not be required to preserve any such right if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Debentureholders.
Section 5.06. MAINTENANCE OF PROPERTIES. The Company will cause all properties used or useful in the conduct of its business or the business of any Significant Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; PROVIDED that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any subsidiary and not disadvantageous in any material respect to the Debentureholders.
Section 5.07. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or discharge, or cause to be paid or discharged, before the same may become delinquent, (i) all taxes, assessments and governmental charges levied or imposed upon the Company or any Significant Subsidiary or upon the income, profits or property of the Company or any Significant Subsidiary, (ii) all claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon the property of the Company or any Significant Subsidiary and (iii) all stamp taxes and other duties, if any, which may be imposed by the United States or any political subdivision thereof or therein in connection with the issuance, transfer, exchange, conversion, redemption or repurchase of any Debentures or with respect to this Indenture; PROVIDED that, in the case of clauses (i) and (ii), the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim (A) if the failure to do so will not, in the aggregate, have a material adverse impact on the Company, or (B) if the amount, applicability or validity is being contested in good faith by appropriate proceedings.
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Section 5.08. RULE 144A INFORMATION REQUIREMENT. Within the period prior to the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), the Company covenants and agrees that it shall, during any period in which it is not subject to Section 13 or 15(d) under the Exchange Act, make available to any holder or beneficial holder of Debentures or any Common Stock issued upon conversion thereof which continue to be Restricted Securities in connection with any sale thereof and any prospective purchaser of Debentures or such Common Stock designated by such holder or beneficial holder, the information required pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any holder or beneficial holder of the Debentures or such Common Stock and it will take such further action as any holder or beneficial holder of such Debentures or such Common Stock may reasonably request, all to the extent required from time to time to enable such holder or beneficial holder to sell its Debentures or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144A, as such Rule may be amended from time to time. Upon the request of any holder or any beneficial holder of the Debentures or such Common Stock, the Company will deliver to such holder a written statement as to whether it has complied with such requirements.
Section 5.09. STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, or interest on the Debentures as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
Section 5.10. COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee, within one hundred twenty (120) days after the end of each fiscal year of the Company, a certificate signed by either the principal executive officer, principal financial officer or principal accounting officer of the Company, stating whether or not to the best knowledge of the signer thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and the status thereof of which the signer may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware of (i) any default in the performance or observance of any covenant, agreement or condition contained in this Indenture, or (ii) any Event of Default, an Officers'
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Certificate specifying with particularity such default or Event of Default and further stating what action the Company has taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 shall be delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 5.11. LIQUIDATED DAMAGES NOTICE. In the event that the Company is required to pay Liquidated Damages to holders of Debentures pursuant to the Registration Rights Agreement, the Company will provide written notice ("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated Damages no later than fifteen (15) days prior to the proposed payment date for the Liquidated Damages, and the Liquidated Damages Notice shall set forth the amount of Liquidated Damages to be paid by the Company on such payment date. The Trustee shall not at any time be under any duty or responsibility to any holder of Debentures to determine the Liquidated Damages, or with respect to the nature, extent or calculation of the amount of Liquidated Damages when made, or with respect to the method employed in such calculation of the Liquidated Damages.
Section 5.12. CONTINGENT DEBT TAX TREATMENT. The Company agrees, and by acceptance of a Debenture, each holder hereof is deemed to have agreed, with respect to each of the matters set forth in (a) and (b) below, as follows:
(a) Tax Treatment:
(i) to treat the Debentures as indebtedness of the Company for all tax purposes;
(ii) to treat the Debentures as indebtedness that are subject to the special regulations governing contingent payment debt instruments that are contained in U.S. Treasury Regulation section 1.1275-4; and
(iii) to treat any payment to and receipt by a holder of Common Stock upon conversion of a Debenture as a contingent payment under U.S. Treasury Regulation section 1.1275-4(b) that will result in an adjustment under U.S. Treasury Regulation section 1.1275-4(b)(3)(iv) and U.S. Treasury Regulation section 1.1275-4(b)(6).
(b) Comparable Yield and Projected Payment Schedule. Solely for purposes of applying U.S. Treasury Regulation section 1.1275-4 to the Debentures:
(i) for United States Federal Income tax purposes, the Company shall accrue interest with respect to outstanding Debentures as original issue discount according to the "noncontingent bond method," as set forth in U.S. Treasury Regulation section 1.1275-4(b);
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(ii) the Company has determined that the comparable yield, as defined in U.S. Treasury Regulation section 1.1275-4(b)(4)(i), for the Debentures is 9.1%, compounded semiannually;
(iii) the Company has determined that the projected payment schedule, as defined in U.S. Treasury Regulation section 1.1275-4(b)(ii), for the Debentures consists of the projected payment schedule referred to in (v) below;
(iv) the Company acknowledges and agrees, and each holder and any beneficial holder of the Debenture, by its purchase of a Debenture shall be deemed to acknowledge and agree that (A) the projected payment schedule is determined on a basis of an assumption of linear growth of stock price and a constant dividend yield, (B) the comparable yield and the projected payment schedule are not determined for any purpose other than for the purpose of applying U.S. Treasury Regulation section 1.1275-4(b) to the Debentures and (C) the comparable yield and the projected payment schedule do not constitute a projection or representation regarding the actual amounts payable on the Debentures; and
(v) the projected payment schedule, as defined in U.S. Treasury Regulation section 1.1275-4(b)(4)(ii) for the Debentures is set forth in Annex 1 hereto.
Section 5.13. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on outstanding Debentures as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 6
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. DEBENTUREHOLDERS' LISTS. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semiannually, not more than fifteen (15) days after each June 1 and December 1 in each year beginning with December 1, 2002, and at such other times as the Trustee may request in writing, within thirty (30) days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the holders of Debentures as of a date not more than fifteen (15) days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list
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need be furnished by the Company to the Trustee so long as the Trustee is acting as the sole Debenture registrar.
Section 6.02. PRESERVATION AND DISCLOSURE OF LISTS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debentures contained in the most recent list furnished to it as provided in Section 6.01 or maintained by the Trustee in its capacity as Debenture registrar or co-registrar in respect of the Debentures, if so acting. The Trustee may destroy any list furnished to it as provided in Section 6.01 upon receipt of a new list so furnished.
(b) The rights of Debentureholders to communicate with other holders of Debentures with respect to their rights under this Indenture or under the Debentures, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of holders of Debentures made pursuant to the Trust Indenture Act.
Section 6.03. REPORTS BY TRUSTEE. (a) Within sixty (60) days after December 15 of each year commencing with the year 2003, the Trustee shall transmit to holders of Debentures such reports dated as of December 15 of the year in which such reports are made concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to holders of Debentures, be filed by the Trustee with each stock exchange and automated quotation system upon which the Debentures are listed and with the Company. The Company will promptly notify the Trustee in writing when the Debentures are listed on any stock exchange or automated quotation system or delisted therefrom.
Section 6.04. REPORTS BY COMPANY. The Company shall file with the Trustee (and the Commission if at any time after the Indenture becomes qualified under the Trust Indenture Act), and transmit to holders of Debentures, such information, documents and other reports and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act, whether or not the Debentures are governed by such Act; PROVIDED that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within fifteen (15) days after the same is so required to be filed with the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's
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receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officers' Certificates).
ARTICLE 7
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. EVENTS OF DEFAULT. In case one or more of the following Events of Default (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon any of the Debentures as and when the same shall become due and payable, and continuance of such default for a period of thirty (30) days; or
(b) default in the payment of the principal of or premium, if any, on any of the Debentures as and when the same shall become due and payable either at maturity or in connection with any redemption, repurchase or otherwise, in each case pursuant to Article 3, by acceleration or otherwise; or
(c) default in the Company's obligation to provide a Fundamental Change Notice upon a Fundamental Change as provided in Section 3.05; or
(d) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Debentures or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section 7.01 specifically dealt with) continued for a period of ninety (90) days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee, or the Company and a Responsible Officer of the Trustee by the holders of at least twenty-five percent (25%) in aggregate principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04; or
(e) the Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of the property of the Company, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding
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commenced against the Company, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of the property of the Company, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;
then, and in each and every such case (other than an Event of Default specified in Section 7.01(e) or 7.01(f)), unless the principal of all of the Debentures shall have already become due and payable, either the Trustee or the holders of not less than twenty-five percent (25%) in aggregate principal amount of the Debentures then outstanding hereunder determined in accordance with Section 9.04, by notice in writing to the Company (and to the Trustee if given by Debentureholders), may declare the principal of and premium, if any, on all the Debentures and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Debentures contained to the contrary notwithstanding. If an Event of Default specified in Section 7.01(e) or 7.01(f) occurs, the principal of all the Debentures and the interest accrued thereon shall be immediately and automatically due and payable without necessity of further action. This provision, however, is subject to the conditions that if, at any time after the principal of the Debentures shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all Debentures and the principal of and premium, if any, on any and all Debentures which shall have become due otherwise than by acceleration (with interest on overdue installments of interest (to the extent that payment of such interest is enforceable under applicable law) and on such principal and premium, if any, at the rate borne by the Debentures, to the date of such payment or deposit) and amounts due to the Trustee pursuant to
Section 8.06, and if any and all defaults under this Indenture, other than the nonpayment of principal of and premium, if any, and accrued interest on Debentures which shall have become due by acceleration, shall have been cured or waived pursuant to Section 7.07, then and in every such case the holders of a majority in aggregate principal amount of the Debentures then outstanding, by written notice to the Company and to the Trustee, may waive all defaults or Events of Default and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or Event of Default, or shall impair any right consequent thereon. The Company shall notify in writing a Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any Event of Default.
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In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such waiver or rescission and annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the holders of Debentures, and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the holders of Debentures, and the Trustee shall continue as though no such proceeding had been taken.
Section 7.02. PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR. The Company covenants that (a) in case default shall be made in the payment of any installment of interest upon any of the Debentures as and when the same shall become due and payable, and such default shall have continued for a period of thirty (30) days, or (b) in case default shall be made in the payment of the principal of or premium, if any, on any of the Debentures as and when the same shall have become due and payable, whether at maturity of the Debentures or in connection with any redemption, by or under this Indenture declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Debentures, the whole amount that then shall have become due and payable on all such Debentures for principal and premium, if any, or interest, as the case may be, with interest upon the overdue principal and premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) upon the overdue installments of interest at the rate borne by the Debentures, plus 1% and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other amounts due the Trustee under Section 8.06. Until such demand by the Trustee, the Company may pay the principal of and premium, if any, and interest on the Debentures to the registered holders, whether or not the Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor on the Debentures and collect in the manner provided by law out of the property of the Company or any other obligor on the Debentures wherever situated the monies adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Debentures under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the
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case of any other judicial proceedings relative to the Company or such other obligor upon the Debentures, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Debentures shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Debentures, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Debentureholders allowed in such judicial proceedings relative to the Company or any other obligor on the Debentures, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due the Trustee under Section 8.06, and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Debentureholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Debentureholders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including counsel fees and expenses incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property which the holders of the Debentures may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under any of the Debentures, may be enforced by the Trustee without the possession of any of the Debentures, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the holders of the Debentures.
In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the holders of the Debentures, and it shall not be necessary to make any holders of the Debentures parties to any such proceedings.
Section 7.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies collected by the Trustee pursuant to this Article 7 shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such
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monies, upon presentation of the several Debentures, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 8.06;
SECOND: In case the principal of the outstanding Debentures shall not have become due and be unpaid, to the payment of interest on the Debentures in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Debentures, such payments to be made ratably to the Persons entitled thereto;
THIRD: In case the principal of the outstanding Debentures shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount then owing and unpaid upon the Debentures for principal and premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Debentures, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Debentures, then to the payment of such principal and premium, if any, and interest without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Debenture over any other Debenture, ratably to the aggregate of such principal and premium, if any, and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.
Section 7.04. PROCEEDINGS BY DEBENTUREHOLDER. No holder of any Debenture shall have any right by virtue of or by reference to any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than twenty-five percent (25%) in aggregate principal amount of the Debentures then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable security or indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 7.07; it being understood and intended, and being expressly covenanted by the taker and holder of every Debenture with every other
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taker and holder and the Trustee, that no one or more holders of Debentures shall have any right in any manner whatever by virtue of or by reference to any provision of this Indenture to affect, disturb or prejudice the rights of any other holder of Debentures, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debentures (except as otherwise provided herein). For the protection and enforcement of this Section 7.04, each and every Debentureholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of any Debenture, the right of any holder of any Debenture to receive payment of the principal of and premium, if any (including the redemption price upon redemption pursuant to Article 7), and accrued interest on such Debenture, on or after the respective due dates expressed in such Debenture or in the event of redemption, or to institute suit for the enforcement of any such payment on or after such respective dates against the Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary notwithstanding, the holder of any Debenture, without the consent of either the Trustee or the holder of any other Debenture, in its own behalf and for its own benefit, may enforce, and may institute and maintain any proceeding suitable to enforce, its rights of conversion as provided herein.
Section 7.05. PROCEEDINGS BY TRUSTEE. In case of an Event of Default, the Trustee may, in its discretion, proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 7.06. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.06, all powers and remedies given by this Article 7 to the Trustee or to the Debentureholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Debentures, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Debentures to exercise any right or power accruing upon any default or Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or any acquiescence therein, and, subject to the provisions of Section 7.04, every power and remedy given by this Article 7 or by law to the Trustee or to the
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Debentureholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Debentureholders.
Section 7.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF DEBENTUREHOLDERS. The holders of a majority in aggregate principal amount of the Debentures at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; PROVIDED that (a) such direction shall not be in conflict with any rule of law or with this Indenture, (b) the Trustee may take any other action which is not inconsistent with such direction and (c) the Trustee may decline to take any action that would benefit some Debentureholder to the detriment of other Debentureholders. The holders of a majority in aggregate principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04 may, on behalf of the holders of all of the Debentures, waive any past default or Event of Default hereunder and its consequences except (i) a default in the payment of interest or premium, if any, on, or the principal of, the Debentures, (ii) a failure by the Company to convert any Debentures into Common Stock, (iii) a default in the payment of the redemption price pursuant to Article 3, (iv) a default in the payment of the purchase price pursuant to Article 3 or (v) a default in respect of a covenant or provisions hereof which under Article 11 cannot be modified or amended without the consent of the holders of each or all Debentures then outstanding or affected thereby. Upon any such waiver, the Company, the Trustee and the holders of the Debentures shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 7.07, said default or Event of Default shall for all purposes of the Debentures and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.
Section 7.08. NOTICE OF DEFAULTS. The Trustee shall, within ninety (90) days after a Responsible Officer of the Trustee has knowledge of the occurrence of a default, mail to all Debentureholders, as the names and addresses of such holders appear upon the Debenture register, notice of all defaults known to a Responsible Officer, unless such defaults shall have been cured or waived before the giving of such notice; PROVIDED that except in the case of default in the payment of the principal of, or premium, if any, or interest on any of the Debentures, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Debentureholders.
Section 7.09. UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and each holder of any Debenture by his acceptance thereof shall be
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deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; PROVIDED that the provisions of this
Section 7.09 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Debentureholder, or group of Debentureholders, holding in the aggregate more than ten percent in principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04, or to any suit instituted by any Debentureholder for the enforcement of the payment of the principal of or premium, if any, or interest on any Debenture on or after the due date expressed in such Debenture or to any suit for the enforcement of the right to convert any Debenture in accordance with the provisions of Article 15.
ARTICLE 8
THE TRUSTEE
Section 8.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and the Trust Indenture Act, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture and the Trust Indenture Act against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon any
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certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless the Trustee was negligent in ascertaining the pertinent facts;
(c) the 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 written direction of the holders of not less than a majority in principal amount of the Debentures at the time outstanding determined as provided in Section 9.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any paying agent or any records maintained by any co-registrar with respect to the Debentures;
(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless it shall have been notified in writing of such Event of Default by the Company or the holders of at least 10% in aggregate principal amount of the Debentures.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
Section 8.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise provided in Section 8.01:
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(a) the Trustee may conclusively rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon or other paper or document (whether in its original or facsimile form) believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Debentureholders pursuant to the provisions of this Indenture, unless such Debentureholders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby;
(e) the 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, bond, debenture or other paper or document, but the Trustee may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder.
(g) the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
(h) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and
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(i) the Trustee may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
Section 8.03. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained herein and in the Debentures (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of any Debentures or the proceeds of any Debentures authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
Section 8.04. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN DEBENTURES. The Trustee, any paying agent, any conversion agent or Debenture registrar, in its individual or any other capacity, may become the owner or pledgee of Debentures with the same rights it would have if it were not Trustee, paying agent, conversion agent or Debenture registrar.
Section 8.05. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.04, all monies received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company and the Trustee.
Section 8.06. COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to from time to time in writing between the Company and the Trustee, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence, willful misconduct, recklessness or bad faith. The Company also covenants to indemnify the Trustee and any predecessor Trustee (or any officer, director or employee of the Trustee), in any capacity under this Indenture and its agents and any authenticating agent for, and to hold them harmless against, any and all loss, liability, damage, claim or expense including taxes (other than taxes based on the income of the Trustee) incurred
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without negligence, willful misconduct, recklessness or bad faith on the part of the Trustee or such officers, directors, employees and agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim (whether asserted by the Company, any holder or any other Person) of liability in the premises. The obligations of the Company under this Section 8.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Debentures upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Debentures. The obligation of the Company under this Section shall survive the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 7.01(d) or (e) with respect to the Company occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.
Section 8.07. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise provided in Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee.
Section 8.08. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 8.09. ELIGIBILITY OF TRUSTEE. There shall at all times be a Trustee hereunder which shall 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 (or if such Person is a member of a bank holding company system, its bank holding company shall have a combined capital and surplus of at least $50,000,000). If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall
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resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 8.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice of such resignation to the Company and to the holders of Debentures. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment sixty (60) days after the mailing of such notice of resignation to the Debentureholders, the resigning Trustee may, upon ten (10) Business Days' notice to the Company and the Debentureholders, appoint a successor identified in such notice or may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor trustee, or, if any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six (6) months may, subject to the provisions of Section 7.09, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 8.08 after written request therefor by the Company or by any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 8.09 and shall fail to resign after written request therefor by the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 7.09, any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the
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removal of the Trustee and the appointment of a successor trustee; PROVIDED that if no successor Trustee shall have been appointed and have accepted appointment sixty (60) days after either the Company or the Debentureholders has removed the Trustee, or the Trustee resigns, the Trustee so removed may petition, at the expense of the Company, any court of competent jurisdiction for an appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Debentures at the time outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless, within ten (10) days after notice to the Company of such nomination, the Company objects thereto, in which case the Trustee so removed or any Debentureholder, or if such Trustee so removed or any Debentureholder fails to act, the Company, upon the terms and conditions and otherwise as in Section 8.10(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 8.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 8.11.
Section 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee appointed as provided in Section 8.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amount then due it pursuant to the provisions of Section 8.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of holders of particular Debentures, to secure any amounts then due it pursuant to the provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee shall be qualified under the provisions of Section 8.08 and be eligible under the provisions of Section 8.09.
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Upon acceptance of appointment by a successor trustee as provided in this Section 8.11, the Company (or the former trustee, at the written direction of the Company) shall mail or cause to be mailed notice of the succession of such trustee hereunder to the holders of Debentures at their addresses as they shall appear on the Debenture register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.
Section 8.12. SUCCESSION BY MERGER. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee (including any trust created by this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, such corporation shall be qualified under the provisions of Section 8.08 and eligible under the provisions of Section 8.09.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Debentures shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Debentures so authenticated; and in case at that time any of the Debentures shall not have been authenticated, any successor to the Trustee or any authenticating agent appointed by such successor trustee may authenticate such Debentures in the name of the successor trustee; and in all such cases such certificates shall have the full force that is provided in the Debentures or in this Indenture; PROVIDED that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Debentures in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 8.13. PREFERENTIAL COLLECTION OF CLAIMS. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Debentures), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of the claims against the Company (or any such other obligor).
ARTICLE 9
THE DEBENTUREHOLDERS
Section 9.01. ACTION BY DEBENTUREHOLDERS. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debentures may take any action (including the making of any
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demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Debentureholders in person or by agent or proxy appointed in writing, or (b) by the record of the holders of Debentures voting in favor thereof at any meeting of Debentureholders duly called and held in accordance with the provisions of Article 10, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Debentureholders. Whenever the Company or the Trustee solicits the taking of any action by the holders of the Debentures, the Company or the Trustee may fix in advance of such solicitation, a date as the record date for determining holders entitled to take such action. The record date shall be not more than fifteen (15) days prior to the date of commencement of solicitation of such action.
Section 9.02. PROOF OF EXECUTION BY DEBENTUREHOLDERS. Subject to the provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any instrument by a Debentureholder or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Debentures shall be proved by the registry of such Debentures or by a certificate of the Debenture registrar.
The record of any Debentureholders' meeting shall be proved in the manner provided in Section 10.06.
Section 9.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee, any paying agent, any conversion agent and any Debenture registrar may deem the Person in whose name such Debenture shall be registered upon the Debenture register to be, and may treat it as, the absolute owner of such Debenture (whether or not such Debenture shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Debenture registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Debenture, for conversion of such Debenture and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any conversion agent nor any Debenture registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Debenture.
Section 9.04. COMPANY-OWNED DEBENTURES DISREGARDED. In determining whether the holders of the requisite aggregate principal amount of Debentures have concurred in any direction, consent, waiver or other action under this Indenture, Debentures which are owned by the Company or any other obligor on the Debentures or any Affiliate of the Company or any other obligor on the Debentures shall be disregarded and deemed not to be outstanding for the purpose
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of any such determination; PROVIDED that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action, only Debentures which a Responsible Officer knows are so owned shall be so disregarded. Debentures so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Debentures and that the pledgee is not the Company, any other obligor on the Debentures or any Affiliate of the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Debentures, if any, known by the Company to be owned or held by or for the account of any of the above described Persons, and, subject to Section 8.01, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Debentures not listed therein are outstanding for the purpose of any such determination.
Section 9.05. REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debentures specified in this Indenture in connection with such action, any holder of a Debenture which is shown by the evidence to be included in the Debentures the holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Debenture. Except as aforesaid, any such action taken by the holder of any Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of such Debenture and of any Debentures issued in exchange or substitution therefor, irrespective of whether any notation in regard thereto is made upon such Debenture or any Debenture issued in exchange or substitution therefor.
ARTICLE 10
MEETINGS OF DEBENTUREHOLDERS
Section 10.01. PURPOSE OF MEETINGS. A meeting of Debentureholders may be called at any time and from time to time pursuant to the provisions of this Article 10 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any default or Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Debentureholders pursuant to any of the provisions of Article 7;
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(2) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 8;
(3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Debentures under any other provision of this Indenture or under applicable law.
Section 10.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a meeting of Debentureholders to take any action specified in Section 10.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Debentureholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 9.01, shall be mailed to holders of Debentures at their addresses as they shall appear on the Debenture register. Such notice shall also be mailed to the Company. Such notices shall be mailed not less than twenty (20) nor more than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the holders of all Debentures then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the holders of all Debentures outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.
Section 10.03. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of at least ten percent (10%) in aggregate principal amount of the Debentures then outstanding, shall have requested the Trustee to call a meeting of Debentureholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within twenty (20) days after receipt of such request, then the Company or such Debentureholders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 10.01, by mailing notice thereof as provided in Section 10.02.
Section 10.04. QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting of Debentureholders a person shall (a) be a holder of one or more Debentures on the record date pertaining to such meeting or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Debentures on the record date pertaining to such meeting. The only persons who shall be entitled to be present or to speak at any meeting of Debentureholders shall be the persons entitled to vote at such meeting and their counsel and any
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representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
Section 10.05. REGULATIONS. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Debentureholders, in regard to proof of the holding of Debentures and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Debentureholders as provided in Section 10.03, in which case the Company or the Debentureholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in principal amount of the Debentures represented at the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each Debentureholder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Debentures held or represented by him; PROVIDED that no vote shall be cast or counted at any meeting in respect of any Debenture challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debentures held by him or instruments in writing as aforesaid duly designating him as the proxy to vote on behalf of other Debentureholders. Any meeting of Debentureholders duly called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time by the holders of a majority of the aggregate principal amount of Debentures represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.
Section 10.06. VOTING. The vote upon any resolution submitted to any meeting of Debentureholders shall be by written ballot on which shall be subscribed the signatures of the holders of Debentures or of their representatives by proxy and the outstanding principal amount of the Debentures held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Debentureholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as
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provided in Section 10.02. The record shall show the principal amount of the Debentures voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 10.07. NO DELAY OF RIGHTS BY MEETING. Nothing contained in this Article 10 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Debentureholders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Debentureholders under any of the provisions of this Indenture or of the Debentures.
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTUREHOLDERS. The Company, when authorized by the resolutions of the Board of Directors, and the Trustee may, from time to time, and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a) make provision with respect to the conversion rights of the holders of Debentures pursuant to the requirements of Section 15.06 and the redemption obligations of the Company pursuant to the requirements of Section 3.05(e);
(b) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Debentures, any property or assets;
(c) to evidence the succession of another Person to the Company, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Company pursuant to Article 12;
(d) to add to the covenants of the Company such further covenants, restrictions or conditions as the Board of Directors and the Trustee shall consider to be for the benefit of the holders of Debentures, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; PROVIDED that in respect of any such additional covenant, restriction or condition, such supplemental indenture may provide for a particular
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period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Debentures in coupon form (including Debentures registrable as to principal only) and to provide for exchangeability of such Debentures with the Debentures issued hereunder in fully registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture that may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture that shall not materially adversely affect the interests of the holders of the Debentures;
(g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Debentures; or
(h) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualifications of this Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted.
Upon the written request of the Company, accompanied by a copy of the resolutions of the Board of Directors certified by its Secretary or Assistant Secretary authorizing the execution of any supplemental indenture, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 11.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Debentures at the time outstanding, notwithstanding any of the provisions of Section 11.02.
Notwithstanding any other provision of the Indenture or the Debentures, the Registration Rights Agreement and the obligation to pay Liquidated Damages thereunder may be amended, modified or waived in accordance with the provisions of the Registration Rights Agreement.
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Section 11.02. SUPPLEMENTAL INDENTURE WITH CONSENT OF DEBENTUREHOLDERS. With the consent (evidenced as provided in Article 9) of the holders of at least a majority in aggregate principal amount of the Debentures at the time outstanding, the Company, when authorized by the resolutions of the Board of Directors, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures; PROVIDED that no such supplemental indenture shall (i) extend the fixed maturity of any Debenture, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or repurchase thereof, or impair the right of any Debentureholder to institute suit for the payment thereof, or make the principal thereof or interest or premium, if any, thereon payable in any coin or currency other than that provided in the Debentures, or change the obligation of the Company to redeem any Debenture on a redemption date in a manner adverse to the holders of Debentures, or change the obligation of the Company to redeem any Debenture upon the happening of a Fundamental Change in a manner adverse to the holders of Debentures, or change the obligation of the Company to repurchase any Debenture on a Repurchase Date in a manner adverse to the holders of Debentures, or impair the right to convert the Debentures into Common Stock subject to the terms set forth herein, including Section 15.06, in each case, without the consent of the holder of each Debenture so affected, or modify any of the provisions of this
Section 11.02 or Section 7.07, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the holder of each Debenture so affected, or change any obligation of the Company to maintain an office or agency in the places and for the purposes set forth in Section 5.01, or reduce the quorum or voting requirements set forth in Article 10 or (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy of the resolutions of the Board of Directors certified by its Secretary or Assistant Secretary authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under this Section 11.02 to approve the particular form of any proposed supplemental
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indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Section 11.03. EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental indenture executed pursuant to the provisions of this Article 11 shall comply with the Trust Indenture Act, as then in effect, provided that this Section 11.03 shall not require such supplemental indenture or the Trustee to be qualified under the Trust Indenture Act prior to the time such qualification is in fact required under the terms of the Trust Indenture Act or the Indenture has been qualified under the Trust Indenture Act, nor shall it constitute any admission or acknowledgment by any party to such supplemental indenture that any such qualification is required prior to the time such qualification is in fact required under the terms of the Trust Indenture Act or the Indenture has been qualified under the Trust Indenture Act. Upon the execution of any supplemental indenture pursuant to the provisions of this Article 11, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Debentures shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 11.04. NOTATION ON DEBENTURES. Debentures authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 11 may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Debentures so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company's expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 16.10) and delivered in exchange for the Debentures then outstanding, upon surrender of such Debentures then outstanding.
Section 11.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO TRUSTEE. Prior to entering into any supplemental indenture, the Trustee shall be provided with an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 11.
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. COMPANY MAY CONSOLIDATE ON CERTAIN TERMS. Subject to the provisions of Section 12.02, the Company shall not consolidate or merge with
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or into any other Person or Persons (whether or not affiliated with the Company), nor shall the Company or its successor or successors be a party or parties to successive consolidations or mergers, nor shall the Company sell, convey, transfer or lease the property and assets of the Company substantially as an entirety, to any other Person (whether or not affiliated with the Company), unless: (i) the Company is the surviving Person, or the resulting, surviving or transferee Person is a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia; (ii) upon any such consolidation, merger, sale, conveyance, transfer or lease, the due and punctual payment of the principal of and premium, if any, and interest on all of the Debentures, according to their tenor and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company, shall be expressly assumed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by the Person (if other than the Company) formed by such consolidation, or into which the Company shall have been merged, or by the Person that shall have acquired or leased such property, and such supplemental indenture shall provide for the applicable conversion rights set forth in
Section 15.06; and (iii) immediately after giving effect to the transaction described above, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing.
Section 12.02. SUCCESSOR TO BE SUBSTITUTED. In case of any such consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest on all of the Debentures and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such successor Person shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the party of this first part. Such successor Person thereupon may cause to be signed, and may issue either in its own name or in the name of Aon Corporation any or all of the Debentures, issuable hereunder that theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Debentures that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Debentures that such successor Person thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Debentures so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debentures theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debentures had been issued at the date of the execution hereof. In the event of any such consolidation, merger, sale, conveyance, transfer or lease, the Person named as the "COMPANY" in the first paragraph of this Indenture or any successor
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that shall thereafter have become such in the manner prescribed in this Article 12 may be dissolved, wound up and liquidated at any time thereafter and such Person shall be released from its liabilities as obligor and maker of the Debentures and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Debentures thereafter to be issued as may be appropriate.
Section 12.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption complies with the provisions of this Article 12.
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. DISCHARGE OF INDENTURE. When (a) the Company shall deliver to the Trustee for cancellation all Debentures theretofore authenticated (other than any Debentures that have been destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Debentures not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all of the Debentures (other than any Debentures that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due to such date of maturity or redemption date, as the case may be, accompanied by a verification report, as to the sufficiency of the deposited amount, from an independent certified accountant or other financial professional satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) remaining rights of registration of transfer, substitution and exchange and conversion of Debentures, (ii) rights hereunder of Debentureholders to receive payments of principal of and premium, if any, and interest on, the Debentures and the other rights, duties and obligations of Debentureholders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel as required by Section 16.04 and at the cost and expense of the
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Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Debentures.
Section 13.02. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to Section 13.04, all monies deposited with the Trustee pursuant to Section 13.01, shall be held in trust for the sole benefit of the Debentureholders, and such monies shall be applied by the Trustee to the payment, either directly or through any paying agent (including the Company if acting as its own paying agent), to the holders of the particular Debentures for the payment or redemption of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest and premium, if any.
Section 13.03. PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction and discharge of this Indenture, all monies then held by any paying agent of the Debentures (other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such monies.
Section 13.04. RETURN OF UNCLAIMED MONIES. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee for payment of the principal of, premium, if any, or interest on Debentures and not applied but remaining unclaimed by the holders of Debentures for two years after the date upon which the principal of, premium, if any, or interest on such Debentures, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand and all liability of the Trustee shall thereupon cease with respect to such monies; and the holder of any of the Debentures shall thereafter look only to the Company for any payment that such holder may be entitled to collect unless an applicable abandoned property law designates another Person.
Section 13.05. REINSTATEMENT. If the Trustee or the paying agent is unable to apply any money in accordance with Section 13.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Debentures shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 until such time as the Trustee or the paying agent is permitted to apply all such money in accordance with Section 13.02; PROVIDED that if the Company makes any payment of interest on or principal of any Debenture following the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Debentures to receive such payment from the money held by the Trustee or paying agent.
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ARTICLE 14
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS. No recourse for the payment of the principal of or premium, if any, or interest on any Debenture, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures.
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. RIGHT TO CONVERT. (a) Subject to and upon compliance with the provisions of this Indenture, prior to November 15, 2009, the holder of any Debenture shall have the right, at such holder's option, to convert the principal amount of the Debenture, or any portion of such principal amount which is a multiple of $1,000, into fully paid and non-assessable shares of Common Stock (as such shares shall then be constituted) at the Conversion Rate in effect at such time, by surrender of the Debenture so to be converted in whole or in part, together with any required funds, under the circumstances described in this Section 15.01 and in the manner provided in Section 15.02. The Debentures shall be convertible only upon the occurrence of one of the following events:
(i) during any fiscal quarter commencing after December 31, 2002, if the Closing Sale Price exceeds 120% of the Conversion Price in effect for at least 20 Trading Days in the 30 consecutive Trading Day period ending on the last Trading Day of the immediately preceding fiscal quarter (it being understood for purposes of this
Section 15.01(a)(i) that the Conversion Price in effect at the close of business on each of the 30 consecutive Trading Days should be used);
(ii) during the five Business Day period after any ten consecutive Trading Day period in which the Trading Price per $1,000 principal amount of the Debentures for each day of such ten day period was less than 95% of the product of the Closing Sale Price and the number of shares of Common Stock issuable upon conversion of $1,000 principal amount of the Debentures; PROVIDED that if on the date of any conversion pursuant to this clause (ii) the Closing Sale Price of the Common Stock is
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greater than the Conversion Price, a holder shall receive, in lieu of Common Stock based on the Conversion Price, cash or Common Stock or a combination of cash and Common Stock, at the Company's option, with a value equal to the principal amount of the holder's Debentures plus accrued interest as of the conversion date (a "PRINCIPAL VALUE CONVERSION");
(iii) if such Debenture has been called for redemption, at any time on or after the date the notice of redemption has been given until the close of business on the Business Day immediately preceding the redemption date; or
(iv) as provided in Section (b) of this Section 15.01.
The Trustee (or other conversion agent appointed by the Company) shall, on behalf of the Company, determine on a daily basis whether the Debentures shall be convertible as a result of the occurrence of an event specified in clause (i) above and, if the Debentures shall be so convertible, the Trustee (or other conversion agent appointed by the Company) shall promptly deliver to the Company and the Trustee (if the Trustee is not the conversion agent) written notice thereof. Whenever the Debentures shall become convertible pursuant to this Section 15.01, the Company or, at the Company's request, the Trustee in the name and at the expense of the Company, shall notify the holders of the event triggering such convertibility in the manner provided in Section 16.03, and the Company shall also publicly announce such information and publish it on the Company's web site. Any notice so given shall be conclusively presumed to have been duly given, whether or not the holder receives such notice.
The Trustee (or other conversion agent appointed by the Company) shall have no obligation to determine the Trading Price under this Section 15.01 unless the Company has requested such a determination; and the Company shall have no obligation to make such request unless a holder provides it with reasonable evidence that the Trading Price per $1,000 principal amount of Debentures would be less than 95% of the product of the Closing Sale Price and the number of shares of Common Stock issuable upon conversion of $1,000 principal amount of Debentures. If such evidence is provided, the Company shall instruct the Trustee (or other conversion agent) to determine the Trading Price of the Debentures beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Debentures is greater than or equal to 95% of the product of the Closing Sale Price and the number of shares issuable upon conversion of $1,000 principal amount of the Debentures.
(b) In addition, if:
(i) (A) the Company distributes to all holders of its Common Stock rights or warrants entitling them (for a period expiring within 45 days of the record date for the determination of the stockholders entitled to
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receive such distribution) to subscribe for or purchase shares of Common Stock, at a price per share less than the average of the Closing Sale Price for the ten Trading Days immediately preceding, but not including, the date such distribution is first publicly announced by the Company, or (B) the Company distributes to all holders of its Common Stock, cash or other assets, debt securities or rights to purchase its securities, where the Fair Market Value of such distribution per share of Common Stock exceeds 10% of the Closing Sale Price on the Trading Day immediately preceding the date such distribution is first publicly announced by the Company, then, in either case, the Debentures may be surrendered for conversion at any time on and after the date that the Company gives notice to the holders of such distribution, which shall be not less than 20 days prior to the Ex-Dividend Time for such distribution, until the earlier of the close of business on the Business Day immediately preceding, but not including, the Ex-Dividend Time or the date the Company publicly announces that such distribution will not take place; PROVIDED that no adjustment to the Conversion Price or the ability of a holder of a Debenture to convert will be made if the holder will otherwise participate in such distribution without conversion; or
(ii) the Company consolidates with or merges with or into another Person or is a party to a binding share exchange or conveys, transfers, sells, leases or otherwise disposes of all or substantially all of its properties and assets, then the Debentures may be surrendered for conversion at any time from and after the date fifteen
(15) days prior to the anticipated effective date of the transaction and ending on and including the date fifteen (15) days after the consummation of the transaction. The Board of Directors shall determine the anticipated effective date of the transaction, and such determination shall be conclusive and binding on the holders and shall be publicly announced by the Company and posted on its web site not later than two Business Day prior to such 15th day.
"EX-DIVIDEND TIME" means, with respect to any distribution on shares of Common Stock, the first date on which the shares of Common Stock trade regular way on the principal securities market on which the shares of Common Stock are then traded without the right to receive such distribution.
(c) A Debenture in respect of which a holder is electing to exercise its option to require redemption upon a Fundamental Change pursuant to Section 3.05 or repurchase pursuant to Section 3.06 may be converted only if such holder withdraws its election in accordance with Section 3.05(b) or Section 3.08, respectively. A holder of Debentures is not entitled to any rights of a holder of Common Stock until such holder has converted his Debentures to Common Stock, and only to the extent such Debentures are deemed to have been converted to Common Stock under this Article 15.
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Section 15.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the conversion privilege with respect to any Debenture in certificated form, the Company must receive at the office or agency of the Company maintained for that purpose or, at the option of such holder, the Corporate Trust Office, such Debenture with the original or facsimile of the form entitled "CONVERSION NOTICE" on the reverse thereof, duly completed and manually signed, together with such Debentures duly endorsed for transfer, accompanied by the funds, if any, required by the penultimate paragraph of this Section 15.02. Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued, and shall be accompanied by transfer or similar taxes, if required pursuant to Section 15.07.
In order to exercise the conversion privilege with respect to any interest in a Global Debenture, the beneficial holder must complete, or cause to be completed, the appropriate instruction form for conversion pursuant to the Depositary's book-entry conversion program, deliver, or cause to be delivered, by book-entry delivery an interest in such Global Debenture, furnish appropriate endorsements and transfer documents if required by the Company or the Trustee or conversion agent, and pay the funds, if any, required by this Section 15.02 and any transfer taxes if required pursuant to Section 15.07.
In the case of a Principal Value Conversion, a holder will receive either cash, Common Stock or a combination of cash and Common Stock, at the Company's option, with a value equal to the principal amount of the Debenture converted plus accrued interest, as of the conversion date. If a holder surrenders its Debentures for conversion and it is a Principal Value Conversion, the Company will notify the holder by the second Trading Day following the conversion date whether it will pay all or a portion of the principal amount plus accrued and unpaid interest in cash, Common Stock or a combination of cash and Common Stock, and in what percentage. Any Common Stock delivered upon a Principal Value Conversion will be valued at the greater of (x) the Conversion Price on the conversion date and (y) the Closing Sale Price on the third Trading Day after the conversion date. The Company will pay any portion of the principal amount plus accrued and unpaid interest to be paid in cash on the third Trading Day after the conversion date. If the Company elects to deliver Common Stock to pay any portion of such principal amount plus accrued and unpaid interest, it will deliver Common Stock on the fourth Trading Day following the conversion date.
As promptly as practicable after satisfaction of the requirements for conversion set forth above, subject to compliance with any restrictions on transfer if shares issuable on conversion are to be issued in a name other than that of the Debentureholder (as if such transfer were a transfer of the Debenture or Debentures (or portion thereof) so converted), the Company shall issue and shall deliver to such Debentureholder at the office or agency maintained by the Company for such purpose pursuant to Section 5.02, a certificate or certificates
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for the number of full shares of Common Stock issuable upon the conversion of such Debenture or portion thereof as determined by the Company in accordance with the provisions of this Article 15 and a check or cash in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion, calculated by the Company as provided in Section 15.03. In case any Debenture of a denomination greater than $1,000 shall be surrendered for partial conversion, and subject to Section 2.03, the Company shall execute and the Trustee shall authenticate and deliver to the holder of the Debenture so surrendered, without charge to him, a new Debenture or Debentures in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such Debenture (or portion thereof) on the date on which the requirements set forth above in this Section 15.02 have been satisfied as to such Debenture (or portion thereof), and the Person in whose name any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become on said date the holder of record of the shares represented thereby; PROVIDED that any such surrender on any date when the stock transfer books of the Company shall be closed shall constitute the Person in whose name the certificates are to be issued as the record holder thereof for all purposes on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Rate in effect on the date upon which such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion during the period from the close of business on the record date for any interest payment date to the close of business on the Business Day preceding the following interest payment date that has not been called for redemption during such period shall be accompanied by payment, in immediately available funds or other funds acceptable to the Company, of an amount equal to the interest otherwise payable on such interest payment date on the principal amount being converted; PROVIDED that no such payment need be made to the extent that there shall exist at the time of conversion a default in the payment of interest on the Debentures. Except as provided above in this Section 15.02, no payment or other adjustment shall be made for interest accrued on any Debenture converted or for dividends on any shares issued upon the conversion of such Debenture as provided in this Article 15.
Upon the conversion of an interest in a Global Debenture, the Trustee (or other conversion agent appointed by the Company), or the Custodian at the direction of the Trustee (or other conversion agent appointed by the Company), shall make a notation on such Global Debenture as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Debentures effected through any conversion agent other than the Trustee.
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Upon the conversion of a Debenture, that portion of the accrued but unpaid interest, including accrued contingent interest, if any, and accrued Tax Original Issue Discount attributable to the period from the issue date of the Debenture to the conversion date, with respect to the converted Debenture shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the holder thereof through delivery of the Common Stock (together with the cash payment, if any in lieu of fractional shares) in exchange for the Debenture being converted pursuant to the provisions hereof; and the fair market value of such shares of Common Stock (together with any such cash payment in lieu of fractional shares) shall be treated as issued, to the extent thereof, first in exchange for and in satisfaction of our obligation to pay the principal amount of the converted Debenture, the accrued but unpaid interest, including contingent interest, if any, and accrued Tax Original Issue Discount through the conversion date from the issue date, and the balance, if any, of such fair market value of such Common Stock (and any such cash payment) shall be treated as issued in exchange for and in satisfaction of the right to convert the Debenture being converted pursuant to the provisions hereof.
Section 15.03. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock or scrip certificates representing fractional shares shall be issued upon conversion of Debentures. If more than one Debenture shall be surrendered for conversion at one time by the same holder, the number of full shares that shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Debentures (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of any Debenture or Debentures, the Company shall make an adjustment and payment therefor in cash at the current market price thereof to the holder of Debentures. The current market price of a share of Common Stock shall be the Closing Sale Price on the last Trading Day immediately preceding the day on which the Debentures (or specified portions thereof) are deemed to have been converted.
Section 15.04. CONVERSION RATE. Each $1,000 principal amount of the Debentures shall be convertible into the number of shares of Common Stock specified in the form of Debenture (herein called the "CONVERSION RATE") attached as Exhibit A hereto, subject to adjustment as provided in this Article 15.
Section 15.05. ADJUSTMENT OF CONVERSION RATE. The Conversion Rate shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding Common Stock in shares of Common Stock, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution by a fraction,
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(i) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the close of business on the date fixed for the determination of stockholders entitled to receive such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination,
such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. If any dividend or distribution of the type described in this Section 15.05(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them (for a period expiring within forty-five (45) days after the date fixed for determination of stockholders entitled to receive such rights or warrants) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price on the date fixed for determination of stockholders entitled to receive such rights or warrants, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the date fixed for determination of stockholders entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of shares of Common Stock outstanding on the date fixed for determination of stockholders entitled to receive such rights or warrants plus the total number of additional shares of Common Stock offered for subscription or purchase, and
(ii) the denominator of which shall be the sum of the number of shares of Common Stock outstanding at the close of business on the date fixed for determination of stockholders entitled to receive such rights or warrants plus the number of shares that the aggregate offering price of the total number of shares so offered would purchase at such Current Market Price.
Such adjustment shall be successively made whenever any such rights or warrants are issued, and shall become effective immediately after the opening of business on the day following the date fixed for determination of stockholders
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entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company or evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in Section 15.05(b), and excluding any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.05(a) (any of the foregoing hereinafter in this Section 15.05(d)) called the "SECURITIES")), then, in each such case (unless the Company elects to reserve such Securities for distribution to the Debentureholders upon the conversion of the Debentures so that any such holder converting Debentures will receive upon such conversion, in addition to the shares of Common Stock to which such holder is entitled, the amount and kind of such Securities which such holder would have received if such holder had converted its Debentures into Common Stock immediately prior to the Record Date, the Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market Price on such Record Date; and
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(ii) the denominator of which shall be the Current Market Price on such Record Date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors) on the Record Date of the portion of the Securities so distributed applicable to one share of Common Stock,
such adjustment to become effective immediately prior to the opening of business on the day following such Record Date; PROVIDED that if the then fair market value (as so determined) of the portion of the Securities so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Debentureholder shall have the right to receive upon conversion the amount of Securities such holder would have received had such holder converted each Debenture on the Record Date. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 15.05(d) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price on the applicable Record Date.
Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("TRIGGER EVENT"): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 15.05 (and no adjustment to the Conversion Rate under this Section 15.05 will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 15.05(d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 15.05 was made,
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(1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 15.05(d) in respect of rights or warrants distributed or deemed distributed on any Trigger Event to the extent that such rights or warrants are actually distributed, or reserved by the Company for distribution to holders of Debentures upon conversion by such holders of Debentures to Common Stock.
For purposes of this Section 15.05(d) and Section 15.05(a) and (b), any dividend or distribution to which this Section 15.05(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Common Stock or rights or warrants (and any Conversion Rate adjustment required by this Section 15.05(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Rate adjustment required by Sections 15.05(a) and 15.05(b) with respect to such dividend or distribution shall then be made), except (A) the Record Date of such dividend or distribution shall be substituted as "the date fixed for the determination of stockholders entitled to receive such dividend or other distribution", "the date fixed for the determination of stockholders entitled to receive such rights or warrants" and "the date fixed for such determination" within the meaning of Section 15.05(a) and 15.05(b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of Section 15.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding (x) any quarterly cash dividend on the Common Stock to the extent the aggregate cash dividend per share of Common Stock in any fiscal quarter does not exceed the greater of (A) the amount per share of Common Stock of the next preceding quarterly cash dividend on the Common Stock to the extent that such preceding quarterly dividend did not require any adjustment of the Conversion Rate pursuant to this Section 15.05(e) (as adjusted to reflect subdivisions, or combinations of the Common Stock), and (B) 2.5% of the arithmetic average of the Closing Sale Price during the ten
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Trading Days immediately prior to the date of declaration of such dividend, and
(y) any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary), then, in such case, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the close of business on such record date by a fraction,
(i) the numerator of which shall be the Current Market Price on such record date; and
(ii) the denominator of which shall be the Current Market Price on such record date less the amount of cash so distributed (and not excluded as provided above) applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of business on the day following the record date; PROVIDED that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Debentureholder shall have the right to receive upon conversion the amount of cash such holder would have received had such holder converted each Debenture on the record date. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If any adjustment is required to be made as set forth in this Section 15.05(e) as a result of a distribution that is a quarterly dividend, such adjustment shall be based upon the amount by which such distribution exceeds the amount of the quarterly cash dividend permitted to be excluded pursuant hereto. If an adjustment is required to be made as set forth in this Section 15.05(e) above as a result of a distribution that is not a quarterly dividend, such adjustment shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or any Subsidiary for all or any portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration per share of Common Stock having a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) that as of the last time (the "EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) exceeds the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum
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specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted up to any such maximum, being referred to as the "PURCHASED SHARES") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Expiration Time multiplied by the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time
such adjustment to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other than the Company or any Subsidiary for an amount that increases the offeror's ownership of Common Stock to more than twenty-five percent (25%) of the Common Stock outstanding and shall involve the payment by such Person of consideration per share of Common Stock having a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors) that as of the last time (the "OFFER EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or exchange offer (as it shall have been amended) exceeds the Closing Price of a share of Common Stock on the Trading Day next succeeding the Offer Expiration Time, and in which, as of the Offer Expiration Time the Board of Directors is not recommending rejection of the offer, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Offer Expiration Time by a fraction
(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "ACCEPTED PURCHASED SHARES") and (y) the product of the number of shares of Common Stock outstanding (less any Accepted Purchased Shares) at the Offer Expiration Time and the Closing Sale Price
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of a share of Common Stock on the Trading Day next succeeding the Offer Expiration Time, and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Offer Expiration Time multiplied by the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of business on the day following the Offer Expiration Time. If such Person is obligated to purchase shares pursuant to any such tender or exchange offer, but such Person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section 15.05(g) shall not be made if, as of the Offer Expiration Time, the offering documents with respect to such offer disclose a plan or intention to cause the Company to engage in any transaction described in Article 12.
(h) For purposes of this Section 15.05, the following terms shall have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the daily Closing Sale Prices per share of Common Stock for the ten consecutive Trading Days selected by the Company commencing no more than 30 Trading Days before and ending not later than the earlier of such date of determination and the day before the "EX" date with respect to the issuance, distribution, subdivision or combination requiring such computation immediately prior to the date in question. For purpose of this paragraph, the term "EX" date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, and (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades, regular way, on such exchange or in such market after the time at which such subdivision or combination becomes effective.
If another issuance, distribution, subdivision or combination to which
Section 15.05 applies occurs during the period applicable for calculating "CURRENT MARKET PRICE" pursuant to the definition in the preceding paragraph, "CURRENT MARKET PRICE" shall be calculated for such period in a manner determined by the Board of Directors to reflect the impact of such issuance, distribution, subdivision or combination on the Closing Sale Price of the Common Stock during such period.
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(ii) "FAIR MARKET VALUE" shall mean the amount which a willing buyer would pay a willing seller in an arm's-length transaction.
(iii) "RECORD DATE" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).
(iv) "TRADING DAY" shall mean (x) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made thereon or (y) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national securities exchange, a day on which the New York Stock Exchange or another national securities exchange is open for business or (z) if the applicable security is not so listed, admitted for trading or quoted, any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
(i) The Company may make such increases in the Conversion Rate, in addition to those required by Section 15.05(a), (b), (c), (d), (e), (f) or (g) as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time may increase the Conversion Rate by any amount for any period of time if the period is at least twenty (20) days, the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the best interests of the Company, which determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to holders of record of the Debentures a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.
(j) No adjustment in the Conversion Rate shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in such rate; PROVIDED that any adjustments that by reason of this Section 15.05(j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article 15 shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be. No adjustment need be
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made for rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest or for any issuance of Common Stock or convertible or exchangeable securities or rights to purchase Common Stock or convertible or exchangeable securities. To the extent the Debentures become convertible into cash, assets, property or securities (other than capital stock of the Company), no adjustment need be made thereafter as to the cash, assets, property or such securities. Interest will not accrue on any cash into which the Debentures are convertible.
(k) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any conversion agent other than the Trustee an Officers' Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers' Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the holder of each Debenture at his last address appearing on the Debenture register provided for in Section 2.05 of this Indenture, within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
(l) In any case in which this Section 15.05 provides that an adjustment shall become effective immediately after (1) a record date or Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 15.05(a), (3) a date fixed for the determination of stockholders entitled to receive rights or warrants pursuant to Section 15.05(b), (4) the Expiration Time for any tender or exchange offer pursuant to Section 15.05(f), or (5) the Offer Expiration Time for a tender or exchange offer pursuant to Section 15.05(g)(i) (each a "DETERMINATION DATE"), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Debenture converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 15.03. For purposes of this Section 15.05(l), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence of such event,
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(ii) in any case referred to in clause (2) hereof, the date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.
Section 15.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 15.05(c) applies), (ii) any consolidation, merger or combination of the Company with another Person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Company to any other Person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing that each Debenture shall be convertible into the kind and amount of shares of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of a number of shares of Common Stock issuable upon conversion of such Debentures (assuming, for such purposes, a sufficient number of authorized shares of Common Stock are available to convert all such Debentures) immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purposes of this Section 15.06
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the kind and amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 15.
The Company shall cause notice of the execution of such supplemental indenture to be mailed to each holder of Debentures, at its address appearing on the Debenture register provided for in Section 2.05 of this Indenture, within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05 shall not apply.
Section 15.07. TAXES ON SHARES ISSUED. The issue of stock certificates on conversions of Debentures shall be made without charge to the converting Debentureholder for any documentary, stamp or similar issue or transfer tax in respect of the issue thereof. The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the holder of any Debenture converted, and the Company shall not be required to issue or deliver any such stock certificate unless and until the Person or Persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.
Section 15.08. RESERVATION OF SHARES, SHARES TO BE FULLY PAID; COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for the conversion of the Debentures from time to time as such Debentures are presented for conversion.
Before taking any action which would cause an adjustment increasing the Conversion Rate to an amount that would cause the Conversion Price to be reduced below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Debentures, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.
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The Company covenants that all shares of Common Stock which may be issued upon conversion of Debentures will upon issue be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Debentures hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Company will in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the Commission (or any successor thereto), endeavor to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock shall be listed on the Nasdaq National Market or any other national securities exchange or automated quotation system, the Company will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Debenture; PROVIDED that if the rules of such exchange or automated quotation system permit the Company to defer the listing of such Common Stock until the first conversion of the Debentures into Common Stock in accordance with the provisions of this Indenture, the Company covenants to list such Common Stock issuable upon conversion of the Debentures in accordance with the requirements of such exchange or automated quotation system at such time.
Section 15.09. RESPONSIBILITY OF TRUSTEE. The Trustee and any other conversion agent shall not at any time be under any duty or responsibility to any holder of Debentures to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other conversion agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Debenture; and the Trustee and any other conversion agent make no representations with respect thereto. Neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Debenture for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 15. Without limiting the generality of the foregoing, neither the Trustee nor any conversion agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 15.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Debentureholders upon the conversion
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of their Debentures after any event referred to in such Section 15.06 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 8.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.
Section 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all or substantially all of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each holder of Debentures at his address appearing on the Debenture register provided for in Section 2.05 of this Indenture, as promptly as possible but in any event at least ten (10) days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Section 15.11. FUTURE STOCKHOLDER RIGHTS PLANS. If the Company hereafter adopts any stockholder rights plan, a Debentureholder shall be entitled to receive upon conversion of their Debentures in addition to the shares of
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Common Stock issuable upon conversion the related rights for the Common Stock whether or not the rights under the future stockholder rights plan have separated from the Common Stock at the time of conversion but otherwise subject to the generally applicable terms of such plan and no additional adjustment to the Conversion Rate shall be made.
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the covenants, stipulations, promises and agreements by the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.
Section 16.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any Person that shall at the time be the lawful sole successor of the Company.
Section 16.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Debentures on the Company shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box or sent by telecopier transmission addressed as follows:
to Aon Corporation, 200 East Randolph Street, Chicago, Illinois 60601, Telecopier No.: (312) 381-6060 Attention: Treasurer. Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited, postage prepaid, by registered or certified mail in a post office letter box or sent by telecopier transmission addressed as follows: The Bank of New York, c/o BNY Midwest Trust Company, 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate Trust Department.
The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall be mailed to him by first class mail, postage prepaid, at his address as it appears on the Debenture register and shall be sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any defect in it shall not affect its sufficiency with respect to other Debentureholders.
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If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
Section 16.04. GOVERNING LAW. This Indenture and each Debenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
Section 16.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT, CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.
Section 16.06. LEGAL HOLIDAYS. In any case in which the date of maturity of interest on or principal of the Debentures or the redemption date of any Debenture will not be a Business Day, then payment of such interest on or principal of the Debentures need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the redemption date, and no interest shall accrue for the period from and after such date.
Section 16.07. TRUST INDENTURE ACT. This Indenture is hereby made subject to, and shall be governed by, the provisions of the Trust Indenture Act required to be part of and to govern indentures qualified under the Trust Indenture Act; PROVIDED that unless otherwise required by law, notwithstanding the foregoing, this Indenture and the Debentures issued hereunder shall not be subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the Trust Indenture Act as now in effect or as hereafter amended or modified; PROVIDED further that this Section 16.07 shall not require this Indenture or the Trustee to be qualified under the Trust Indenture Act prior to the time such qualification is in fact required under the terms of the Trust Indenture Act, nor
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shall it constitute any admission or acknowledgment by any party to the Indenture that any such qualification is required prior to the time such qualification is in fact required under the terms of the Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in an indenture qualified under the Trust Indenture Act, such required provision shall control.
Section 16.08. NO SECURITY INTEREST CREATED. Nothing in this Indenture or in the Debentures, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction in which property of the Company or its subsidiaries is located.
Section 16.09. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Debentures, express or implied, shall give to any Person, other than the parties hereto, any paying agent, any authenticating agent, any Debenture registrar and their successors hereunder and the holders of Debentures any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.10. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and the titles and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 16.11. AUTHENTICATING AGENT. The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf, and subject to its direction, in the authentication and delivery of Debentures in connection with the original issuance thereof and transfers and exchanges of Debentures hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Debentures. For all purposes of this Indenture, the authentication and delivery of Debentures by the authenticating agent shall be deemed to be authentication and delivery of such Debentures "by the Trustee" and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Debentures for the Trustee's certificate of authentication. Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 8.09.
Any corporation into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation is otherwise eligible under this
Section 16.11,
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without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation.
Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee shall either promptly appoint a successor authenticating agent or itself assume the duties and obligations of the former authenticating agent under this Indenture and, upon such appointment of a successor authenticating agent, if made, shall give written notice of such appointment of a successor authenticating agent to the Company and shall mail notice of such appointment of a successor authenticating agent to all holders of Debentures as the names and addresses of such holders appear on the Debenture register.
The Company agrees to pay to the authenticating agent from time to time such reasonable compensation for its services as shall be agreed upon in writing between the Company and the authenticating agent.
The provisions of Sections 8.02, 8.03, 8.04 and 9.03 and this Section 16.11 shall be applicable to any authenticating agent.
Section 16.12. EXECUTION IN COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 16.13. SEVERABILITY. In case any provision in this Indenture or in the Debentures shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
The Bank of New York hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein above set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed.
Aon CORPORATION

By:  /s/ Patrick G. Ryan
     -----------------------------------------
     Name: Patrick G. Ryan
     Title: Chairman and Chief
             Executive Officer	

THE BANK OF NEW YORK, as Trustee

By:  /s/ Van K. Brown
     -----------------------------------------
     Name:  Van K. Brown
     Title: Vice President	

ANNEX 1
PROJECTED PAYMENT SCHEDULE(1)

   QUARTERLY PERIOD ENDING        NONCONTINGENT PAYMENTS        CONTINGENT PAYMENTS       TOTAL PAYMENTS
   -----------------------        ----------------------        -------------------       --------------

May 15, 2003                               18.28                        --                    18.28
November 15, 2003                          17.50                        --                    17.50
May 15, 2004                               17.50                        --                    17.50
November 15, 2004                          17.50                        --                    17.50
May 15, 2005                               17.50                        --                    17.50
November 15, 2005                          17.50                        --                    17.50
May 15, 2006                               17.50                        --                    17.50
November 15, 2006                          17.50                        --                    17.50
May 15, 2007                               17.50                        --                    17.50
November 15, 2007                          17.50                        --                    17.50
May 15, 2008                               17.50                        --                    17.50
November 15, 2008                          17.50                       13.97                  31.47
May 15, 2009                               17.50                       13.97                  31.47
November 15, 2009                          17.50                       13.97                  31.47
May 15, 2010                               17.50                       13.97                  31.47
November 15, 2010                          17.50                       13.97                  31.47
May 15, 2011                               17.50                       13.97                  31.47
November 15, 2011                          17.50                       13.97                  31.47
May 15, 2012                               17.50                       13.97                  31.47
November 14, 2012                           --                        1765.84                1765.84	

COMPARABLE YIELD: 9.1% COMPOUNDED SEMIANNUALLY

(1) The schedule of projected payments is determined on the basis of an assumption of linear growth of the stock price and is not determined for any purpose other than for the determination of interest accruals and adjustments thereof in respect of the Debentures for United States federal income tax purposes. The schedule of projected payments does not constitute a projection or representation regarding the amounts payable on the Debentures.

EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include only for Debentures that are Restricted Securities]
[THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE EXCEPT (A) TO AON CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS

BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE
(2)(D) ABOVE OR UPON ANY TRANSFER OF THIS DEBENTURE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTION.]
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS NOVEMBER 7, 2002 AND THE COMPARABLE YIELD IS 9.1%, COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: AON CORPORATION, CORPORATE SECRETARY, 200 EAST RANDOLPH STREET, CHICAGO, ILLINOIS 60601.
A-2

AON CORPORATION
3 1/2 % CONVERTIBLE SENIOR DEBENTURE DUE 2012
CUSIP: 037389AQ6
No. 1 $_____________
Aon Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the "COMPANY", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE & CO. or its registered assigns, the principal sum of _____________ DOLLARS] [the principal sum set forth on Schedule I hereto](2) on November 15, 2012 at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on May 15 and November 15 of each year, commencing May 15, 2003, on said principal sum at said office or agency, in like coin or currency, at the rate per annum of 3 1/2 %, from the May 15 or November 15, as the case may be, next preceding the date of this Debenture to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Debenture, or unless no interest has been paid or duly provided for on the Debentures, in which case from November 7, 2002 until payment of said principal sum has been made or duly provided for. Notwithstanding the foregoing, if the date hereof is after any May 1 or November 1, as the case may be, and before the following May 15 or November 15, this Debenture shall bear interest from such May 15 or November 15; PROVIDED that if the Company shall default in the payment of interest due on such May 15 or November 15, then this Debenture shall bear interest from the next preceding May 15 or November 15 to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for on such Debenture, from November 7, 2002. Contingent interest, if any, will accrue for any six month interest period and be payable to holders of this Debenture on the last day of such six month interest period to the person in whose name this Debenture is registered on the Debenture register at the close of business on the day immediately preceding such day. Except as otherwise provided in the Indenture, the interest payable on the Debenture pursuant to the Indenture on any May 15 or November 15 will be paid to the Person entitled thereto as it appears in the Debenture register at the close of business on the record date, which shall be the May 1 or November 1 (whether or not a Business Day) next preceding such May 15 or November 15, as provided in the Indenture; PROVIDED that any such interest not punctually paid or duly provided for shall be

(2) For Global Debentures only.

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payable as provided in the Indenture. The Company shall pay interest (i) on any Debentures in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Debenture register or (ii) on any Global Debenture by wire transfer of immediately available funds to the account of the Depositary or its nominee.
The Company promises to pay interest on overdue principal, premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) interest at the rate of 4.5%, per annum.
Reference is made to the further provisions of this Debenture set forth on the reverse hereof, including, without limitation, provisions giving the holder of this Debenture the right to convert this Debenture into Common Stock of the Company on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of the State of New York, without regard to conflicts of laws principles thereof.
This Debenture shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed.
Aon CORPORATION
By:

By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
THE BANK OF NEW YORK, as Trustee
By:

Authorized Signatory
, or
By:

As Authenticating Agent
 (if different from Trustee)

By:

Authorized Signatory

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FORM OF REVERSE OF DEBENTURE
Aon CORPORATION
3 1/2 % CONVERTIBLE SENIOR DEBENTURE DUE 2012
This Debenture is one of a duly authorized issue of Debentures of the Company, designated as its 3 1/2 % Convertible Senior Debentures Due 2012 (herein called the "DEBENTURES"), limited in aggregate principal amount to $300,000,000, issued and to be issued under and pursuant to an Indenture dated as of November 7, 2002 (herein called the "INDENTURE"), between the Company and The Bank of New York, as trustee (herein called the "TRUSTEE"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debentures.
In case an Event of Default shall have occurred and be continuing, the principal of, premium, if any, and accrued interest, including contingent interest, if any, on all Debentures may be declared by either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of at least a majority in aggregate principal amount of the Debentures at the time outstanding, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Debentures; PROVIDED that no such supplemental indenture shall (i) extend the fixed maturity of any Debenture, or reduce the rate or extend the time of payment of interest, including contingent interest, if any, or Liquidated Damages, if any, thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable upon redemption or repurchase thereof, or impair the right of any Debentureholder to institute suit for the payment thereof, or make the principal thereof or interest or premium, if any, thereon payable in any coin or currency other than that provided in the Debentures, or change the obligation of the Company to redeem any Debenture on a redemption date in a manner adverse to the holders or change the obligation of the Company to redeem any Debenture upon the happening of a Fundamental Change in a manner adverse to the holder of the Debentures, or change the obligation of the Company to repurchase any Debenture on a Repurchase Date in a manner adverse to the holder of the Debentures, or impair the right to convert the Debentures into Common Stock subject to the terms set forth in the Indenture, including
Section 15.06 thereof, without the consent of the holder of each Debenture so affected, or modify any of the provisions of Section 11.02 or Section 7.07 thereof, except to increase any
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such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of each Debenture so affected, or change any obligation of the Company to maintain an office or agency in the places and for the purposes set forth in Section 5.01 thereof, or reduce the quorum or voting requirements set forth in Article 10 or (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Debentures then outstanding. Subject to the provisions of the Indenture, the holders of a majority in aggregate principal amount of the Debentures at the time outstanding may on behalf of the holders of all of the Debentures waive any past default or Event of Default under the Indenture and its consequences except (A) a default in the payment of interest, or any premium on, or the principal of, any of the Debentures, (B) a failure by the Company to convert any Debentures into Common Stock of the Company, (C) a default in the payment of the redemption price pursuant to Article 3 of the Indenture, (D) a default in the payment of the repurchase price pursuant to Article 3 of the Indenture, or (E) a default in respect of a covenant or provisions of the Indenture which under Article 11 of the Indenture cannot be modified or amended without the consent of the holders of each or all Debentures then outstanding or affected thereby. Any such consent or waiver by the holder of this Debenture (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture and any Debentures which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest, including contingent interest, if any, on this Debenture at the place, at the respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a 360-day year of twelve 30-day months.
The Debentures are issuable in fully registered form, without coupons, in denominations of $1,000 principal amount and any multiple of $1,000. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, without payment of any service charge but with payment of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in connection with any registration or exchange of Debentures, Debentures may be exchanged for a like aggregate principal amount of Debentures of any other authorized denominations.
At any time on or after November 19, 2007 and prior to maturity, the Debentures may be redeemed at the option of the Company, in whole or in part, upon mailing a notice of such redemption not less than 30 days but not more than 60 days before the redemption date to the holders of Debentures at their last
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registered addresses, all as provided in the Indenture, at the following optional redemption prices (expressed as percentages of the principal amount), together in each case with accrued and unpaid interest, including contingent interest, if any, to, but excluding, the redemption date:

REDEMPTION PERIOD                                                           REDEMPTION PRICE
-----------------                                                           ----------------
Beginning on November 19, 2007 and ending on November 14, 2008                     101.00%
Beginning on November 15, 2008 and ending on November 14, 2009                     100.50%	

and 100% if redeemed on or after November 15, 2009; PROVIDED that if the redemption date is on a May 15 or November 15, then the interest payable on such date shall be paid to the holder of record on the preceding May 1 or November 1, respectively.
The Company may not give notice of any redemption of the Debentures if a default in the payment of interest, or premium, if any, on the Debentures has occurred and is continuing.
The Debentures are not subject to redemption through the operation of any sinking fund.
If a Fundamental Change occurs at any time prior to maturity of the Debentures, this Debenture will be redeemable on a Fundamental Change Redemption Date, 30 days after notice thereof, at the option of the holder of this Debenture at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to (but excluding) the redemption date; PROVIDED that if such Fundamental Change Redemption Date is a May 15 or November 15, the interest payable on such date shall be paid to the holder of record of this Debenture on the preceding May 1 or November 1, respectively. The Debentures will be redeemable in multiples of $1,000 principal amount. The Company shall mail to all holders of record of the Debentures a notice of the occurrence of a Fundamental Change and of the redemption right arising as a result thereof on or before the 10th day after the occurrence of such Fundamental Change. For a Debenture to be so redeemed at the option of the holder, the Company must receive at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, such Debenture with the form entitled "OPTION TO ELECT REPAYMENT UPON A FUNDAMENTAL CHANGE" on the reverse thereof duly completed, together with such Debenture, duly endorsed for transfer, on or before the 30th day after the date of such notice of a Fundamental Change (or if such 30th day is not a Business Day, the immediately succeeding Business Day).
Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the holder, all or any portion of the Debentures held by such holder on November 15, 2009 in whole multiples of $1,000 at a purchase price of 100% of the principal amount, plus any accrued and unpaid interest, on such Debenture up to the Repurchase Date. To exercise such
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right, a holder shall deliver to the Company such Debenture with the form entitled "REPURCHASE NOTICE" on the reverse thereof duly completed, together with the Debenture, duly endorsed for transfer, at any time from the opening of business on the date that is 20 Business Days prior to such Repurchase Date until the close of business on the Repurchase Date, and shall deliver the Debentures to the Trustee (or other paying agent appointed by the Company) as set forth in the Indenture.
Holders have the right to withdraw any Repurchase Notice by delivering to the Trustee (or other paying agent appointed by the Company) a written notice of withdrawal up to the close of business on the Repurchase Date, all as provided in the Indenture.
If cash, sufficient to pay the purchase price of all Debentures or portions thereof to be purchased as of the Repurchase Date is deposited with the Trustee (or other paying agent appointed by the Company), on the Business Day following the Repurchase Date, interest will cease to accrue on such Debentures (or portions thereof) immediately after such Repurchase Date, and the holder thereof shall have no other rights as such other than the right to receive the purchase price upon surrender of such Debenture.
Subject to the occurrence of certain events and in compliance with the provisions of the Indenture, prior to the final maturity date of the Debentures, the holder hereof has the right, at its option, to convert each $1,000 principal amount of the Debentures into 46.5658 shares of the Company's Common Stock, as such shares shall be constituted at the date of conversion and subject to adjustment from time to time as provided in the Indenture, upon surrender of this Debenture with the form entitled "CONVERSION NOTICE" on the reverse thereof duly completed, to the Company at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Debenture, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his duly authorized attorney. The Company will notify the holder thereof of any event triggering the right to convert the Debentures as specified above in accordance with the Indenture.
No adjustment in respect of interest on any Debenture converted or dividends on any shares issued upon conversion of such Debenture will be made upon any conversion except as set forth in the next sentence. If this Debenture (or portion hereof) is surrendered for conversion during the period from the close of business on any record date for the payment of interest to the close of business on the Business Day preceding the following interest payment date and has not been called for redemption by the Company on a redemption date that occurs during such period, this Debenture (or portion hereof being converted) must be accompanied by payment, in immediately available funds or other funds acceptable to the Company, of an amount equal to the interest otherwise payable
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on such interest payment date on the principal amount being converted; PROVIDED that no such payment shall be required if there shall exist at the time of conversion a default in the payment of interest, including contingent interest, if any, on the Debentures.
No fractional shares will be issued upon any conversion, but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Debenture or Debentures for conversion.
A Debenture in respect of which a holder is exercising its right to require redemption upon a Fundamental Change or repurchase on a Repurchase Date may be converted only if such holder withdraws its election to exercise either such right in accordance with the terms of the Indenture.
Any Debentures called for redemption, unless surrendered for conversion by the holders thereof on or before the close of business on the Business Day preceding the redemption date, may be deemed to be redeemed from the holders of such Debentures for an amount equal to the applicable redemption price, together with accrued but unpaid interest to, but excluding, the date fixed for redemption, by one or more investment banks or other purchasers who may agree with the Company (i) to purchase such Debentures from the holders thereof and convert them into shares of the Company's Common Stock and (ii) to make payment for such Debentures as aforesaid to the Trustee in trust for the holders.
Upon due presentment for registration of transfer of this Debenture at the office or agency of the Company maintained for that purpose in accordance with the terms of the Indenture, a new Debenture or Debentures of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange thereof, subject to the limitations provided in the Indenture, without charge except for any tax, assessment or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any conversion agent and any Debenture registrar may deem and treat the registered holder hereof as the absolute owner of this Debenture (whether or not this Debenture shall be overdue and notwithstanding any notation of ownership or other writing hereon made by anyone other than the Company or any Debenture registrar) for the purpose of receiving payment hereof, or on account hereof, for the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any other authenticating agent nor any paying agent nor other conversion agent nor any Debenture registrar shall be affected by any notice to the contrary. All payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for monies payable on this Debenture.
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No recourse for the payment of the principal of or any premium or interest on this Debenture, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any supplemental indenture or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
This Debenture shall be deemed to be a contract made under the laws of New York, and for all purposes shall be construed in accordance with the laws of New York, without regard to conflicts of laws principles thereof.
Terms used in this Debenture and defined in the Indenture are used herein as therein defined.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Debenture, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM -         as tenants in common                        UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT -         as tenant by the entireties                 (Cust)   (Minor)
JT TEN -          as joint tenants with right of
                  survivorship and not as                     under Uniform Gifts to Minors Act
                  tenants in common                           ____________________________
                                                                        (State)	

Additional abbreviations may also be used though not in the above list.

CONVERSION NOTICE
TO: Aon CORPORATION
THE BANK OF NEW YORK
The undersigned registered owner of this Debenture hereby irrevocably exercises the option to convert this Debenture, or the portion thereof (which is $1,000 or a multiple thereof) below designated, into shares of Common Stock of Aon Corporation in accordance with the terms of the Indenture referred to in this Debenture, and directs that the shares issuable and deliverable upon such conversion, together with any check in payment for fractional shares and any Debentures representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. If shares or any portion of this Debenture not converted are to be issued in the name of a person other than the undersigned, the undersigned will provide the appropriate information below and pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest, including contingent interest, if any, accompanies this Debenture.
Dated:

Signature(s)
Signature(s) must be guaranteed by an
"ELIGIBLE GUARANTOR INSTITUTION" meeting the
 requirements of the Debenture registrar,
which requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"SIGNATURE GUARANTEE PROGRAM" as may be
 determined by the Debenture registrar in
addition to, or in substitution for, STAMP,
all in accordance with the Securities
Exchange Act of 1934, as amended.

Signature Guarantee

Fill in the registration of shares of Common Stock if to be issued, and Debentures if to be delivered, other than to and in the name of the registered holder:

(Name)

(Street Address)

(City, State and Zip Code)

Please print name and address
Principal amount to be converted (if less than all):
$-------------------------------------
Social Security or Other Taxpayer
Identification Number:

OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE
TO: Aon CORPORATION
THE BANK OF NEW YORK
The undersigned registered owner of this Debenture hereby irrevocably acknowledges receipt of a notice from Aon Corporation (the "COMPANY") as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to redeem the entire principal amount of this Debenture, or the portion thereof (which is $1,000 or a multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Debenture at the price of 100% of such entire principal amount or portion thereof, together with accrued interest to, but excluding, the Fundamental Change Redemption Date, to the registered holder hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.
Dated:

Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be repaid (if less than
all):

Social Security or Other Taxpayer Identification Number

REPURCHASE NOTICE
TO: Aon CORPORATION
THE BANK OF NEW YORK
The undersigned registered owner of this Debenture hereby irrevocably acknowledges receipt of a notice from (the "COMPANY") regarding the right of holders to elect to require the Company to repurchase the Debentures and requests and instructs the Company to repay the entire principal amount of this Debenture, or the portion thereof (which is $1,000 or an integral multiple thereof) below designated, in accordance with the terms of the Indenture at the price of 100% of such entire principal amount or portion thereof, together with accrued interest to, by excluding, the Repurchase Date, to the registered holder hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. The Debentures shall be repurchased by the Company as of the Repurchase Date pursuant to the terms and conditions specified in the Indenture. If the Company elects to pay the purchase price, in whole or in part, in shares of Common Stock but such portion of the purchase price shall ultimately be paid to such holder entirely in cash because any of the conditions to payment of the purchase price in shares of Common Stock is not satisfied prior to the close of business on the applicable Repurchase Date, the undersigned registered owner elects:
[ ] to withdraw this Repurchase Notice as to $[ ] principal amount of the Debentures to which this Repurchase Notice relates (Certificate Numbers: ), or
[ ] to receive cash in respect of $[ ] principal amount of the Debentures to which this Repurchase Notice relates.
Dated:
Signature(s):
NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:

ASSIGNMENT
For value received ______________________________hereby sell(s) assign(s) and transfer(s) unto ___________________________________ (Please insert social security or other Taxpayer Identification Number of assignee) the within Debenture, and hereby irrevocably constitutes and appoints ______________________________________ attorney to transfer said Debenture on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision) (other than any transfer pursuant to a registration statement that has been declared effective under the Securities Act), the undersigned confirms that such Debenture is being transferred:
/ / To Aon Corporation or a subsidiary thereof; or
/ / To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule 144A under the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended; or
/ / Pursuant to a Registration Statement which has been declared effective under the Securities Act of 1933, as amended, and which continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Aon Corporation or a subsidiary thereof, the undersigned confirms that such Debenture is not being transferred to an "AFFILIATE" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended.
UNLESS ONE OF THE BOXES IS CHECKED, THE TRUSTEE WILL REFUSE TO REGISTER ANY OF THE DEBENTURES EVIDENCED BY THIS CERTIFICATE IN THE NAME OF ANY PERSON OTHER THAN THE REGISTERED HOLDER THEREOF.
Dated:

Signature(s)
Signature(s) must be guaranteed by an
"ELIGIBLE GUARANTOR INSTITUTION"

meeting the requirements of the Debenture registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Debenture registrar in addition to, or in substitution for, STAMP, al in accordance with the Securities Exchange Act of 1934, as amended.

Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption Upon a Fundamental Change, the Repurchase Notice or the Assignment must correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.

Schedule I
[Include Schedule I only for a Global Debenture]
AON CORPORATION
3 1/2 % Convertible Senior Debenture Due 2012
No. _______

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Exhibit 4(b)
REGISTRATION RIGHTS AGREEMENT
BETWEEN
AON CORPORATION
AS ISSUER,
AND
MORGAN STANLEY & CO. INCORPORATED,
AS INITIAL PURCHASER
DATED AS OF NOVEMBER 7, 2002

REGISTRATION RIGHTS AGREEMENT dated as of November 7, 2002 between Aon Corporation, a Delaware corporation (the "COMPANY"), and Morgan Stanley & Co. Incorporated (the "INITIAL PURCHASER") pursuant to the Purchase Agreement dated November 4, 2002 (the "PURCHASE AGREEMENT"), between the Company and the Initial Purchaser. In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchaser, (i) for its benefit as Initial Purchaser and (ii) for the benefit of the beneficial owners (including the Initial Purchaser) from time to time of the Debentures (as defined herein) and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issued upon conversion of the Debentures (each of the foregoing a "HOLDER" and together the "HOLDERS"), as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
"AFFILIATE" means with respect to any specified person, an "affiliate," as defined in Rule 144, of such person.
"AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.
"COMMON STOCK" means the shares of common stock, par value $1.00 per share, of the Company and any other shares of common stock as may constitute "Common Stock" for purposes of the Indenture, including the Underlying Common Stock.
"CONVERSION PRICE" has the meaning assigned such term in the Indenture.
"DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section 2(e) hereof.
"DAMAGES PAYMENT DATE" means each May 15 and November 15.
"DEBENTURES" means the 3 1/2% Senior Convertible Debentures Due 2012 of the Company to be purchased pursuant to the Purchase Agreement.
"DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.
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"DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.
"EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a) hereof.
"EFFECTIVENESS PERIOD" means the period commencing on the date hereof and ending on the date that all Registrable Securities have ceased to be Registrable Securities.
"EVENT" has the meaning set forth in Section 2(e) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"FILING DEADLINE DATE" has the meaning set forth in Section 2(a) hereof.
"HOLDER" has the meaning set forth in the second paragraph of this Agreement.
"INDENTURE" means the Indenture, dated as of November 7, 2002, between the Company and The Bank of New York, as trustee, pursuant to which the Debentures are being issued.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.
"ISSUE DATE" means November 7, 2002.
"LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e) hereof.
"MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.
"NOTICE AND QUESTIONNAIRE" means a written notice delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated November 4, 2002 relating to the Debentures.
"NOTICE HOLDER" means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date.
"PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.
"PROSPECTUS" means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under
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the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.
"RECORD HOLDER" means with respect to any Damages Payment Date relating to any Debentures or Underlying Common Stock as to which any Liquidated Damages Amount has accrued, the registered holder of such Debenture or Underlying Common Stock on the May 1 immediately preceding a Damages Payment Date occurring on a May 15, and on the November 1 immediately preceding a Damages Payment Date occurring on a November 15.
"REGISTRABLE SECURITIES" means the Debentures until such Debentures have been converted into or exchanged for the Underlying Common Stock and, at all times subsequent to any such conversion, the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, (A) the earliest of (i) its effective registration under the Securities Act and resale in accordance with the Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto, under Rule 144(k) or (iii) its sale to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the Securities Act, and (B) as a result of the event or circumstance described in any of the foregoing clauses (i) through (iii), the legend with respect to transfer restrictions required under the Indenture is removed or removable in accordance with the terms of the Indenture or such legend, as the case may be.
"REGISTRATION STATEMENT" means any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement.
"RESTRICTED SECURITIES" means "Restricted Securities" as defined in Rule 144.
"RULE 144" means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
"RULE 144A" means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.
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"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2(a) hereof.
"SPECIAL COUNSEL" means Davis Polk & Wardwell or one such other successor counsel as shall be specified by the Holders of a majority of the Registrable Securities, but which may, with the written consent of the Initial Purchaser (which shall not be unreasonably withheld), be another nationally recognized law firm experienced in securities law matters designated by the Company, the reasonable fees and expenses of which will be paid by the Company pursuant to Section 5 hereof. For purposes of determining the holders of a majority of the Registrable Securities in this definition, Holders of Debentures shall be deemed to be the Holders of the number of shares of Underlying Common Stock into which such Debentures are or would be convertible as of the date the consent is requested.
"SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"TRUSTEE" means The Bank of New York, the Trustee under the Indenture.
"UNDERLYING COMMON STOCK" means the Common Stock into which the Debentures are convertible or issued upon any such conversion.
SECTION 2. SHELF REGISTRATION. (a) The Company shall prepare and file or cause to be prepared and filed with the SEC, as soon as practicable but in any event by the date (the "FILING DEADLINE DATE") ninety (90) days after the Issue Date, a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF REGISTRATION STATEMENT") registering the resale from time to time by Holders thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION STATEMENT"). The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution elected by the Holders and set forth in the Initial Shelf Registration Statement. The Company shall use its reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable but in any event by the date (the "EFFECTIVENESS DEADLINE DATE") that is one hundred eighty (180) days after the Issue Date, and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf Registration Statement) continuously effective under the Securities Act until the expiration of the Effectiveness Period. At the time the Initial Shelf Registration Statement is declared effective, each Holder that became a Notice Holder on or prior to the date ten (10) Business Days prior to such time of effectiveness shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law. None of the Company's security holders (other than the Holders of Registrable Securities)
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shall have the right to include any of the Company's securities in the Shelf Registration Statement.
(b) If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because all Registrable Securities registered thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a "SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a Subsequent Shelf Registration Statement is filed, the Company shall use its reasonable best efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep such Registration Statement (or subsequent Shelf Registration Statement) continuously effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act or as necessary to name a Notice Holder as a selling securityholder pursuant to Section (d) below.
(d) Each Holder agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(d) and Section 3(h). Following the date that the Initial Shelf Registration Statement is declared effective, each Holder wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver a Notice and Questionnaire to the Company at least three (3) Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration Statement. Each holder who elects to sell Registrable Securities pursuant to a Shelf Registration Statement agrees by submitting a Notice and Questionnaire to the Company, it will be bound by the terms and conditions of the Notice and Questionnaire and this Agreement. From and after the date the Initial Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 8(c) hereof, and in any event upon the later of (x) five (5) Business Days after such date or (y) five (5) Business Days after the expiration of any Deferral Period in effect when the Notice and Questionnaire is delivered or put into effect within five (5) Business Days of such delivery date:
(i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document
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incorporated therein by reference or file any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is practicable, but in any event by the date (the "AMENDMENT EFFECTIVENESS DEADLINE DATE") that is forty-five (45) days after the date such post-effective amendment is required by this clause to be filed;
(ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and
(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i);
PROVIDED, that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section
3(h). Notwithstanding anything contained herein to the contrary, (i) the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) Business Days from the expiration of a Deferral Period (and the Company shall incur no obligation to pay Liquidated Damages during such extension or during such Deferral Period) if such Deferral Period shall be in effect on the Amendment Effectiveness Deadline Date.
(e) The parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if, other than as permitted hereunder,
(i) the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date,
(ii) the Initial Shelf Registration Statement has not been declared effective under the Securities Act on or prior to the Effectiveness Deadline Date,
(iii) the Company has failed to perform its obligations set forth in Section 2(d)(i) within the time period required therein,
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(iv) any post-effective amendment to a Shelf Registration Statement filed pursuant to Section 2(d)(i) has not become effective under the Securities Act on or prior to the Amendment Effectiveness Deadline Date, or
(v) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(h) hereof.
Each event described in any of the foregoing clauses (i) through (v) is individually referred to herein as an "EVENT." For purposes of this Agreement, each Event set forth above shall begin and end on the dates set forth in the table set forth below:

              Type of
              Event by                            Beginning                           Ending
               Clause                               Date                               Date
------------------------------------- ---------------------------------- ----------------------------------

                (i)                   Filing Deadline Date               the date the Initial Shelf
                                                                         Registration Statement is filed

                (ii)                  Effectiveness Deadline Date        the date the Initial Shelf
                                                                         Registration Statement becomes
                                                                         effective under the Securities
                                                                         Act

               (iii)                  the date by which the Company is   the date the Company performs
                                      required to perform its            its obligations set forth in
                                      obligations under Section 2(d)     Section 2(d)

                (iv)                  the Amendment Effectiveness        the date the applicable
                                      Deadline Date                      post-effective amendment to a
                                                                         Shelf Registration Statement
                                                                         becomes effective under the
                                                                         Securities Act

                (v)                   the date on which the aggregate    termination of the Deferral
                                      duration of Deferral Periods in    Period that caused the limit on
                                      any period exceeds the number of   the aggregate duration of
                                      days permitted by Section 3(h)     Deferral Periods to be exceeded	

For purposes of this Agreement, Events shall begin on the dates set forth in the table above and shall continue until the ending dates set forth in the table above.
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Commencing on (and including) any date that an Event has begun and ending on (but excluding) the next date on which there are no Events that have occurred and are continuing (a "DAMAGES ACCRUAL PERIOD"), the Company shall pay, as liquidated damages and not as a penalty, to Record Holders of Registrable Securities an amount (the "LIQUIDATED DAMAGES AMOUNT") accruing, for each day in the Damages Accrual Period, (i) in respect of any Debenture, at a rate per annum equal to 0.25% for the first 90 day period after the occurrence of such an Event and 0.5% thereafter, of the aggregate principal amount of such Debenture and
(ii) in respect of each share of Underlying Common Stock at a rate per annum equal to 0.25% for the first 90 day period after the occurrence of such an Event and 0.5% thereafter, on the Conversion Price on such date, as the case may be; PROVIDED that in the case of a Damages Accrual Period that is in effect solely as a result of an Event of the type described in clause (iii) or (iv) of the preceding paragraph, such Liquidated Damages Amount shall be paid only to the Holders (as set forth in the succeeding paragraph) that have delivered Notices and Questionnaires that caused the Company to incur the obligations set forth in
Section 2(d) the non-performance of which is the basis of such Event. In calculating the Liquidated Damages Amount on any date on which no Debentures are outstanding, the Conversion Price and the Liquidated Damages Amount payable with respect to shares of Common Stock which are Registrable Securities, shall be calculated as if the Debentures were still outstanding. Notwithstanding the foregoing, no Liquidated Damages Amount shall accrue as to any Registrable Security from and after the earlier of (x) the date such security is no longer a Registrable Security and (y) expiration of the Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events.
The Liquidated Damages Amount shall accrue from the first day of the applicable Damages Accrual Period, and shall be payable on each Damages Payment Date during the Damage Accrual Period (and on the Damages Payment Date next succeeding the end of the Damages Accrual Period if the Damage Accrual Period does not end on a Damages Payment Date) to the Record Holders of the Registrable Securities entitled thereto; PROVIDED that any Liquidated Damages Amount accrued with respect to any Debenture or portion thereof redeemed by the Company on a redemption date or converted into Underlying Common Stock on a conversion date prior to the Damages Payment Date, shall, in any such event, be paid instead to the Holder who submitted such Debenture or portion thereof for redemption or conversion on the applicable redemption date or conversion date, as the case may be, on such date (or promptly following the conversion date, in the case of conversion); PROVIDED FURTHER, that, in the case of an Event of the type described in clause (iii) or (iv) of the first paragraph of this Section 2(e), such Liquidated Damages Amount shall be paid only to the Holders entitled thereto pursuant to such first paragraph by check mailed to the address set forth in the Notice and Questionnaire delivered by such Holder. The Trustee shall be entitled, on behalf of registered holders of Debentures or Underlying Common Stock, to seek any available remedy for the enforcement of this Agreement, including for the payment of such Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement
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with respect to which liquidated damages are expressly provided shall be such liquidated damages. Nothing shall preclude any Holder from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.
All of the Company's obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the liquidated damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with the provisions hereof.
SECTION 3. REGISTRATION PROCEDURES. In connection with the registration obligations of the Company under Section 2 hereof, during the Effectiveness Period, the Company shall:
(a) Prepare and file with the SEC a Registration Statement or Registration Statements on any appropriate form under the Securities Act available for the sale of the Registrable Securities by the Holders thereof in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; PROVIDED that before filing any Registration Statement or Prospectus or any amendments or supplements thereto with the SEC (but excluding reports filed with the SEC under the Exchange Act), furnish to the Initial Purchaser and the Special Counsel of such offering, if any, copies of all such documents proposed to be filed at least three (3) Business Days prior to the filing of such Registration Statement or amendment thereto or Prospectus or supplement thereto.
(b) Subject to Section 3(h), prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable period specified in Section
2(a); cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use its reasonable best efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so supplemented.
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(c) As promptly as practicable give notice to the Notice Holders, the Initial Purchaser and the Special Counsel, (i) when any Prospectus, prospectus supplement, Registration Statement or post-effective amendment to a Registration Statement has been filed with the SEC and, with respect to a Registration Statement or any post-effective amendment, when the same has been declared effective,
(ii) of any request, following the effectiveness of the Initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to any Registration Statement or related Prospectus or for additional information relating to the Shelf Registration Statement,
(iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of, but not the nature of or details concerning, a Material Event and (vi) of the determination by the Company that a post-effective amendment to a Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section
3(h)), state that it constitutes a Deferral Notice, in which event the provisions of Section 3(h) shall apply.
(d) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case at the earliest possible moment, and provide immediate notice to each Notice Holder and the Initial Purchaser of the withdrawal of any such order.
(e) As promptly as practicable furnish to each Notice Holder, the Special Counsel and the Initial Purchaser, upon request and without charge, at least one (1) conformed copy of the Registration Statement and any amendment thereto, including exhibits and if requested, all documents incorporated or deemed to be incorporated therein by reference.
(f) During the Effectiveness Period, deliver to each Notice Holder, the Special Counsel, if any, and the Initial Purchaser, in connection with any sale of Registrable Securities pursuant to a Registration Statement, without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Notice Holder in
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connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein.
(g) Prior to any public offering of the Registrable Securities pursuant to a Registration Statement, use its reasonable best efforts to register or qualify or cooperate with the Notice Holders and the Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and Questionnaire); prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in connection with such Notice Holder's offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the relevant Registration Statement and the related Prospectus; PROVIDED that the Company will not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Agreement or (ii) take any action that would subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject.
(h) Upon (A) the issuance by the SEC of a stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any fact (a "MATERIAL EVENT") as a result of which any Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any pending corporate development that, in the reasonable discretion of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement and the related Prospectus:
(i) in the case of clause (B) above, subject to the next sentence, as promptly as practicable prepare and file, if necessary pursuant to applicable law, a post-effective amendment to such Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such
12

Registration Statement and Prospectus so that such Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Registration Statement, subject to the next sentence, use its reasonable best efforts to cause it to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders, and the Special Counsel, if any, that the availability of the Shelf Registration Statement is suspended (a "DEFERRAL NOTICE") and, upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Registration Statement until such Notice Holder's receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus.
The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as in the reasonable discretion of the Company, such suspension is no longer appropriate. The Company shall be entitled to exercise its right under this Section 3(h) to suspend the availability of the Shelf Registration Statement or any Prospectus, without incurring or accruing any obligation to pay liquidated damages pursuant to Section 2(e) (the "DEFERRAL PERIOD"); PROVIDED that the aggregate duration of any Deferral Periods shall not exceed 30 days in any three month period (or 60 days in any three month period in the event of a Material Event pursuant to which the Company has delivered a second notice as required below) or 90 days in any twelve (12) month period; PROVIDED that in the case of a Material Event relating to an acquisition or a probable acquisition or financing, recapitalization, business combination or other similar transaction, the Company may, without incurring any obligation to pay liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second notice to the effect set forth above, which shall have the effect of extending the Deferral Period by up to an additional 30 days, or such shorter period of time as is specified in such second notice.
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(i) If reasonably requested in writing in connection with a disposition of Registrable Securities pursuant to a Registration Statement, make reasonably available for inspection during normal business hours by a representative for the Notice Holders of such Registrable Securities, any broker-dealers, attorneys and accountants retained by such Notice Holders, and any attorneys or other agents retained by a broker-dealer engaged by such Notice Holders, all relevant financial and other records and pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours on reasonable notice all relevant information reasonably requested by such representative for the Notice Holders, or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar "due diligence" examinations; PROVIDED that such persons shall first agree in writing with the Company that any information that is reasonably designated by the Company as confidential at the time of delivery of such information shall be kept confidential by such persons and shall be used solely for the purposes of exercising rights under this Agreement, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of any Registration Statement or the use of any prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by any such person or
(iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement, and PROVIDED FURTHER that the foregoing inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the counsel referred to in Section 5. Any person legally compelled to disclose any such confidential information made available for inspection shall provide the Company with prompt prior written notice of such requirement so that the Company may seek a protective order or other appropriate remedy.
(j) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) for a 12-month period commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of a Registration Statement, which statements shall be made available no later than 45 days after the end of the 12-month period or 90 days if the 12-month period coincides with the fiscal year of the Company.
(k) Cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold or to be sold pursuant to a
14

Registration Statement, which certificates shall not bear any restrictive legends, and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least two
(2) Business Day prior to any sale of such Registrable Securities.
(l) Provide a CUSIP number for all Registrable Securities covered by each Registration Statement not later than the effective date of such Registration Statement and provide the Trustee and the transfer agent for the Common Stock with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company.
(m) Cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc.
(n) Upon (i) the filing of the Initial Shelf Registration Statement and (ii) the effectiveness of the Initial Shelf Registration Statement, announce the same, in each case by release to Reuters Economic Services and Bloomberg Business News.
SECTION 4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as the Company may from time to time reasonably request. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to or provided by such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact relating to or provided by such Holder or its plan of distribution necessary to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading.
SECTION 5. REGISTRATION EXPENSES. The Company shall bear all fees and expenses incurred in connection with the performance by the Company of its obligations under Sections 2 and 3 of this Agreement whether or not any Registration Statement is declared effective. Such fees and expenses shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the
15

National Association of Securities Dealers, Inc. and (y) of compliance with federal and state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Special Counsel in connection with Blue Sky qualifications of the Registrable Securities under the laws of such jurisdictions as Notice Holders of a majority of the Registrable Securities being sold pursuant to a Registration Statement may designate), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company), (iii) duplication expenses relating to copies of any Registration Statement or Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of counsel for the Company in connection with the Shelf Registration Statement, (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock and
(vi) any Securities Act liability insurance obtained by the Company in its sole discretion. In addition, the Company shall pay the internal expenses of the Company (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing by the Company of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed and the fees and expenses of any person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each seller of Registrable Securities shall pay selling expenses, including any underwriting discount and commissions, and all registration expenses to the extent required by applicable law.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless each Notice Holder, each person, if any, who controls any Notice Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Holder furnished to the Company in writing by such Holder expressly for use therein; PROVIDED that the indemnification contained in this paragraph shall not inure to the benefit of any Holder (or to the benefit of any person controlling such Holder) on account of any such losses, claims, damages or liabilities caused by any untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus provided in each case the Company has performed its obligations under Section 3(a) hereof if either (A) (i) such Holder failed to send or deliver a copy of the Prospectus with or prior to the delivery of written
16

confirmation of the sale by such Holder to the person asserting the claim from which such losses, claims, damages or liabilities arise and (ii) the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (B) (x) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the Prospectus and (y) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such Holder thereafter fails to deliver such Prospectus as so amended or supplemented, with or prior to the delivery of written confirmation of the sale of a Registrable Security to the person asserting the claim from which such losses, claims, damages or liabilities arise.
(b) INDEMNIFICATION BY HOLDERS. Each Holder agrees severally and not jointly to indemnify and hold harmless the Company and its directors, its officers and each person, if any, who controls the Company (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or any other Holder, to the same extent as the foregoing indemnity from the Company to such Holder, but only with reference to information relating to such Holder furnished to the Company in writing by such Holder expressly for use in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of any Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the Registration Statement giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by, in the case of parties indemnified pursuant to Section 6(a), the Holders of a majority (with Holders of Debentures deemed to be the Holders, for purposes of determining such majority, of the number
17

of shares of Underlying Common Stock into which such Debentures are or would be convertible as of the date on which such designation is made) of the Registrable Securities covered by the Registration Statement held by Holders that are indemnified parties pursuant to Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b), the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) CONTRIBUTION. To the extent that the indemnification provided for in Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company shall be deemed to be equal to the total net proceeds from the initial placement pursuant to the Purchase Agreement (before deducting expenses) of the Registrable Securities to which such losses, claims, damages or liabilities relate. The relative benefits received by any Holder shall be deemed to be equal to the value of receiving Registrable Securities that are registered under the Securities Act. The relative fault of the Holders on the one hand and the Company on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Holders or by the Company, and the parties' relative intent, knowledge, access to information and opportunity to
18

correct or prevent such statement or omission. The Holders' respective obligations to contribute pursuant to this paragraph 6 are several in proportion to the respective number of Registrable Securities they have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by PRO RATA allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding this Section 6, no indemnifying party that is a selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by it and distributed to the public were offered to the public exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity, hereunder, under the Purchase Agreement or otherwise.
(f) The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder, any person controlling any Holder or any affiliate of any Holder or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) the sale of any Registrable Securities by any Holder.
SECTION 7. INFORMATION REQUIREMENTS. The Company covenants that, if at any time before the end of the Effectiveness Period the Company is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder and take such further reasonable action as any Holder may reasonably request in writing (including, without limitation, making such reasonable representations as any such Holder may reasonably request), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and Rule 144A under the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon the written request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such filing requirements, unless such a statement has been included in the Company's most recent report filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this
19

Section 7 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under any section of the Exchange Act.
SECTION 8. MISCELLANEOUS.
(a) NO CONFLICTING AGREEMENTS. The Company is not, as of the date hereof, a party to, nor shall it, on or after the date of this Agreement, enter into, any agreement with respect to its securities that conflicts with the rights granted to the Holders in this Agreement. The Company represents and warrants that the rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company's securities under any other agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then outstanding Underlying Common Stock constituting Registrable Securities (with Holders of Debentures deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Debentures are or would be convertible as of the date on which such consent is requested). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Registration Statement; PROVIDED that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing sentence, (i) this Agreement may be amended by written agreement signed by the Company and the Initial Purchaser, without the consent of the Holders of Registrable Securities, to cure any ambiguity or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect the interests of the Holders of Registrable Securities. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(b), whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is delivered to such Holder.
(c) NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, by telecopier, by courier guaranteeing overnight delivery or by first-class mail, return receipt requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day
20

after being deposited with such courier, if made by overnight courier or (iv) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows:
(i) if to a Holder, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto;
(ii) if to the Company, to:
Aon Corporation
200 East Randolph Street Chicago, Illinois 60601 Attention: General Counsel Telecopy No.: (312) 381-6165
and
Sidley Austin Brown & Wood LLP 787 Seventh Avenue New York, New York 10016 Attention: Michael Kohler Telecopy No.: (212) 839-5599
(iii) if to the Initial Purchaser, to:
Morgan Stanley & Co. Incorporated 1585 Broadway
New York, New York
Attention: Equity Capital Markets Telecopy No.: (212) 761-0538
or to such other address as such person may have furnished to the other persons identified in this Section 8(c) in writing in accordance herewith.
(d) APPROVAL OF HOLDERS. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) (other than the Initial Purchaser or subsequent Holders if such subsequent Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
21

(e) SUCCESSORS AND ASSIGNS. Any person who purchases any Registrable Securities from the Initial Purchaser shall be deemed, for purposes of this Agreement, to be an assignee of the Initial Purchaser. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties and shall inure to the benefit of and be binding upon each Holder of any Registrable Securities, PROVIDED that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof.
(f) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) SEVERABILITY. If any term provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Securities. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties with respect to such registration rights. No party hereto shall have any rights, duties or obligations other than those specifically set forth in this Agreement. In no event will such methods of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company.
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(k) TERMINATION. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Section 4, 5 or 6 hereof and the obligations to make payments of and provide for liquidated damages under Section 2(e) hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
Aon CORPORATION

By:  /s/ Patrick G. Ryan
    -------------------------------------
    Name:  Patrick G. Ryan
    Title: Chairman and Chief Executive
            Officer	

Confirmed and accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED

By:  /s/ Trevor R. Burgess
   -------------------------------------
     Name:  Trevor R. Burgess
     Title: Vice President	

EXHIBIT 10 (x)
EXECUTION COPY

$437,500,000 
THREE YEAR CREDIT AGREEMENT
AMONG
AON CORPORATION,
AS BORROWER,
THE LENDERS,
BANK ONE, NA,
AS AGENT,
AND
CITIBANK, N.A.,
ABN AMRO BANK N.V.
AND
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENTS
DATED AS OF
FEBRUARY 8, 2002

BANC ONE CAPITAL MARKETS, INC.
SOLE LEAD ARRANGER AND SOLE BOOK MANAGER

TABLE OF CONTENTS

ARTICLE I DEFINITIONS.............................................................1

ARTICLE II THE CREDITS...........................................................12
2.1.    Commitment...............................................................12
2.2.    Required Payments; Termination...........................................12
2.3.    Ratable Loans............................................................12
2.4.    Types of Advances........................................................12
2.5.    Facility Fee; Utilization Fee; Reductions in Aggregate Commitment........12
2.6.    Minimum Amount of Each Advance...........................................13
2.7.    Optional Principal Payments..............................................13
2.8.    Method of Selecting Types and Interest Periods for New Advances..........13
2.9.    Conversion and Continuation of Outstanding Advances......................14
2.10.   Changes in Interest Rate, etc............................................14
2.11.   Rates Applicable After Default...........................................15
2.12.   Method of Payment........................................................15
2.13.   Noteless Agreement; Evidence of Indebtedness.............................15
2.14.   Telephonic Notices.......................................................16
2.15.   Interest Payment Dates; Interest and Fee Basis...........................16
2.16.   Notification of Advances, Interest Rates, Prepayments and Commitment
        Reductions...............................................................17
2.17.   Lending Installations....................................................17
2.18.   Non-Receipt of Funds by the Agent........................................17
2.19.   Replacement of Lender....................................................17

ARTICLE III YIELD PROTECTION; TAXES..............................................18
3.1.    Yield Protection.........................................................18
3.2.    Changes in Capital Adequacy Regulations..................................18
3.3.    Availability of Types of Advances........................................19
3.4.    Funding Indemnification..................................................19
3.5.    Taxes....................................................................19
3.6.    Lender Statements; Survival of Indemnity.................................21

ARTICLE IV CONDITIONS PRECEDENT..................................................22
4.1.    Effectiveness............................................................22
4.2.    Each Advance.............................................................23

ARTICLE V REPRESENTATIONS AND WARRANTIES.........................................23
5.1.    Corporate Existence and Standing.........................................23
5.2.    Authorization and Validity...............................................24
5.3.    Compliance with Laws and Contracts.......................................24
5.4.    Governmental Consents....................................................24
5.5.    Financial Statements.....................................................24	

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5.6.    Material Adverse Change..................................................25
5.7.    Taxes....................................................................25
5.8.    Litigation and Contingent Obligations....................................25
5.9.    ERISA....................................................................25
5.10.   Defaults.................................................................26
5.11.   Regulation U.............................................................26
5.12.   Investment Company; Public Utility Holding Company.......................26
5.13.   Ownership of Properties..................................................26
5.14.   Material Agreements......................................................26
5.15.   Environmental Laws.......................................................27
5.16.   Insurance................................................................27
5.17.   Insurance Licenses.......................................................27
5.18.   Solvency.................................................................27
5.19.   Disclosure...............................................................28

ARTICLE VI COVENANTS.............................................................28
6.1.    Financial Reporting......................................................28
6.2.    Use of Proceeds..........................................................29
6.3.    Notice of Default........................................................29
6.4.    Conduct of Business......................................................30
6.5.    Taxes....................................................................30
6.6.    Insurance................................................................30
6.7.    Compliance with Laws.....................................................30
6.8.    Maintenance of Properties................................................30
6.9.    Inspection...............................................................30
6.10.   Capital Stock and Dividends..............................................30
6.11.   Merger...................................................................31
6.12.   Liens....................................................................31
6.13.   Affiliates...............................................................32
6.14.   Change in Fiscal Year....................................................32
6.15.   Inconsistent Agreements..................................................32
6.16.   Sale of Assets...........................................................33
6.17.   Financial Covenants......................................................33
6.18.   ERISA....................................................................33

ARTICLE VII DEFAULTS.............................................................33

ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES......................35
8.1.    Acceleration.............................................................35
8.2.    Amendments...............................................................35
8.3.    Preservation of Rights...................................................36

ARTICLE IX GENERAL PROVISIONS....................................................36
9.1.    Survival of Representations..............................................36
9.2.    Governmental Regulation..................................................36
9.3.    Headings.................................................................37	

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9.4.    Entire Agreement.........................................................37
9.5.    Several Obligations; Benefits of this Agreement..........................37
9.6.    Expenses; Indemnification................................................37
9.7.    Numbers of Documents.....................................................37
9.8.    Accounting...............................................................38
9.9.    Severability of Provisions...............................................38
9.10.   Nonliability of Lenders..................................................38
9.11.   Confidentiality..........................................................38
9.12.   Disclosure...............................................................38

ARTICLE X THE AGENT..............................................................38
10.1.   Appointment..............................................................38
10.2.   Powers...................................................................39
10.3.   General Immunity.........................................................39
10.4.   No Responsibility for Loans, Recitals, etc...............................39
10.5.   Action on Instructions of Lenders........................................39
10.6.   Employment of Agents and Counsel.........................................40
10.7.   Reliance on Documents; Counsel...........................................40
10.8.   Agent's Reimbursement and Indemnification................................40
10.9.   Notice of Default........................................................41
10.10.  Rights as a Lender.......................................................41
10.11.  Lender Credit Decision...................................................41
10.12.  Successor Agent..........................................................41
10.13.  Agent and Arranger Fees..................................................42
10.14.  Delegation to Affiliates.................................................42
10.15.  Syndication Agents; Senior Managing Agents; Managing Agents..............42

ARTICLE XI SETOFF; RATABLE PAYMENTS..............................................42
11.1.   Setoff...................................................................42
11.2.   Ratable Payments.........................................................42

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....................43
12.1.   Successors and Assigns...................................................43
12.2.   Participations...........................................................43
12.3.   Assignments..............................................................44
12.4.   Dissemination of Information.............................................45
12.5.   Tax Treatment............................................................45

ARTICLE XIII NOTICES.............................................................45
13.1.   Giving Notice............................................................45
13.2.   Change of Address........................................................46

ARTICLE XIV COUNTERPARTS.........................................................46

ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL............................................................................46	

-iii-

15.1.   CHOICE OF LAW............................................................46
15.2.   CONSENT TO JURISDICTION..................................................46
15.3.   WAIVER OF JURY TRIAL.....................................................47	

-iv-

EXHIBITS

Exhibit A          Note
Exhibit B          Compliance Certificate
Exhibit C          Assignment Agreement

                                    SCHEDULES

Pricing Schedule
Schedule 1         Commitments	

-v-

THREE YEAR CREDIT AGREEMENT
This Three Year Credit Agreement, dated as of February 8, 2002, is among Aon Corporation, a Delaware corporation, the Lenders and Bank One, NA, a national banking association having its principal office in Chicago, Illinois, as Agent.
RECITALS:
A. The Borrower has requested the Lenders to make financial accommodations to it in the aggregate principal amount of $437,500,000; and
B. The Lenders are willing to extend such financial accommodations on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance" means a borrowing of Loans, (a) advanced by the Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of the Lenders pursuant to ARTICLE X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to ARTICLE X.
"Aggregate Commitment" means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. The initial Aggregate Commitment is $437,500,000.
"Agreement" means this Three Year Credit Agreement, as it may be amended or modified and in effect from time to time.

"Agreement Accounting Principles" means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with those used in preparing the financial statements referred to in SECTION 5.5.
"Alternate Base Rate" means, for any day, a rate of interest per annum equal to the higher of (a) the Prime Rate for such day, and (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance which, except as otherwise provided in SECTION 2.11, bears interest at the Alternate Base Rate.
"Alternate Base Rate Loan" means a Loan which, except as otherwise provided in SECTION 2.11, bears interest at the Alternate Base Rate.
"Applicable Facility Fee Rate" means, at any time, the percentage determined in accordance with the Pricing Schedule at such time. The Applicable Facility Fee Rate shall change as and when the Borrower Debt Rating changes. The initial Applicable Facility Fee Rate shall be .09%.
"Applicable Margin" means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.
"Applicable Utilization Fee Rate" means, at any time, the percentage determined in accordance with the Pricing Schedule at such time. The Applicable Utilization Fee Rate shall change as and when the Borrower Debt Rating changes.
"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as "Sole Lead Arranger" and "Sole Book Manager".
"Article" means an article of this Agreement unless another document is specifically referenced.
"Authorized Officer" means any of the president, chief financial officer, treasurer or vice-president and controller of the Borrower, acting singly.
"Bank One" means Bank One, NA, a national banking association having its principal office in Chicago, Illinois, in its individual capacity, and its successors.
"Borrower" means Aon Corporation, a Delaware corporation, and its successors and assigns.
-2-

"Borrower Debt Rating" means the senior unsecured long term debt (without third party credit enhancement) rating of the Borrower as determined by a rating agency identified on the Pricing Schedule.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in SECTION 2.8.
"Business Day" means (a) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in United States dollars are carried on in the London interbank market and (b) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
"Change" is defined in SECTION 3.2.
"Change in Control" means (a) the acquisition by any Person, or two or more Persons acting in concert, including without limitation any acquisition effected by means of any transaction contemplated by SECTION 6.11, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock of the Borrower, or (b) during any period of 25 consecutive calendar months, commencing on the date of this Agreement, the ceasing of those individuals (the "CONTINUING DIRECTORS") who (i) were directors of the Borrower on the first day of each such period or (ii) subsequently became directors of the Borrower and whose initial election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of the Borrower, to constitute a majority of the board of directors of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make Loans not exceeding the amount set forth opposite its name on SCHEDULE 1 hereto, as it may be modified as a result of any assignment that has become effective pursuant to SECTION 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof.
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"Condemnation" is defined in SECTION 7.8.
"Consolidated" or "consolidated", when used in connection with any calculation, means a calculation to be determined on a consolidated basis for the Borrower and its Subsidiaries in accordance with Agreement Accounting Principles.
"Consolidated EBITDA" means Consolidated Net Income PLUS, to the extent deducted from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary losses incurred other than in the ordinary course of business, MINUS, to the extent included in Consolidated Net Income, extraordinary gains realized other than in the ordinary course of business, all calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period, the interest expense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Worth" means, at any date of determination, the consolidated common stockholders' equity of the Borrower and its consolidated Subsidiaries determined in accordance with Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of reference, each Person which is a member of the affiliated group of the Borrower if Consolidated returns are or shall be filed for such affiliated group for federal income tax purposes or any combined or unitary group of which the Borrower is a member for state income tax purposes.
"Contingent Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement or take-or-pay contract or application for a Letter of Credit.
"Controlled Group" means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in SECTION 2.9.
"CSC" means Combined Specialty Corporation, a Wholly-Owned Subsidiary of the Borrower, that will, immediately prior to the CSC Spin-Off, hold only the general insurance underwriting business of the Borrower.
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"CSC Distribution Agreement" means the distribution agreement to be filed with the U.S. Securities and Exchange Commission and entered into between the Borrower and CSC to effect the CSC Spin-Off in material conformity with the description of the CSC Spin-Off and pro-forma financial information relating to the CSC Spin-Off which was included in the Form 8-K filed with the U.S. Securities and Exchange Commission on December 3, 2001 by the Borrower under the Securities Act of 1934.
"CSC Group" means CSC and each of CSC's Subsidiaries.
"CSC Spin-Off" means the distribution, as a tax-free dividend by the Borrower to the current holders of the Borrower's common stock, of the outstanding shares of common stock of CSC to be effected pursuant to the terms of the CSC Distribution Agreement, together with the related transactions expressly contemplated by the terms of the CSC Distribution Agreement.
"Default" means an event described in ARTICLE VII.
"Environmental Laws" is defined in SECTION 5.15.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided in SECTION 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance: (a) for any one, two, three or six month Interest Period applicable to such Eurodollar Advance, the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, PROVIDED that, (i) if Reuters Screen FRBD is not available to the Agent for any reason, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, and (ii) if no such British Bankers' Association Interest Settlement Rate is available to the Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period; or
(b) for any fourteen (14) day Interest Period applicable to such Eurodollar Advance, the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars with first-class banks in the interbank market at approximately 10:00 a.m. (Chicago time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period.
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"Eurodollar Loan" means a Loan which, except as otherwise provided in
SECTION 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin for Eurodollar Advances.
"Excluded Taxes" means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (ii) the jurisdiction in which the Agent's or such Lender's principal executive office or such Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document is specifically referenced.
"Existing Credit Agreements" means that certain $600,000,000 364-Day Amended and Restated Credit Agreement dated as of October 8, 1998 among the Borrower, Bank One, as agent, and the lenders named therein, and that certain $600,000,000 Five Year Credit Agreement dated as of January 14, 1997 among the Borrower, Bank One, as agent, and the lenders named therein, in each case as amended, restated, supplemented or otherwise modified from time to time.
"Facility Termination Date" means February 8, 2005 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion.
"Financial Statements" is defined in SECTION 5.5.
"Fiscal Quarter" means each of the four three-month accounting periods comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December 31 of each year.
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"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
"Governmental Authority" means any government (foreign or domestic) or any state or other political subdivision thereof or any governmental body, agency, authority, department or commission (including without limitation any taxing authority or political subdivision) or any instrumentality or officer thereof (including, without limitation, any court or tribunal and any board of insurance, insurance department or insurance commissioner) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned or controlled by or subject to the control of any of the foregoing.
"Hazardous Materials" is defined in SECTION 5.15.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed money, (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations which are evidenced by notes, acceptances, or similar instruments,
(e) Capitalized Lease Obligations, (f) Contingent Obligations, (g) obligations for which such Person is obligated pursuant to or in respect of a Letter of Credit and (h) repurchase obligations or liabilities of such Person with respect to accounts or notes receivable sold by such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a period of fourteen (14) days or one, two, three or six months commencing on a Business Day selected by the Borrower pursuant to this Agreement. An Interest Period of one, two, three or six months shall end on (but exclude) the day which corresponds numerically to such date one, two, three or six months thereafter; PROVIDED, HOWEVER, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day; PROVIDED, HOWEVER, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.
"Lenders" means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender or the Agent pursuant to SECTION 2.17.
"Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.
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"Lien" means any security interest, lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to ARTICLE II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, any Notes issued pursuant to SECTION 2.13 and the other documents and agreements contemplated hereby and executed by the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the business, Property, condition (financial or otherwise), performance, results of operations, or prospects of the Post-Spin-Off Group taken as a whole or, if the Borrower has confirmed or it has notified the holders of the Borrower's common stock or the US Securities and Exchange Commission that the CSC Spin-Off is not to take place, the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations under the Loan Documents, or
(c) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Modified Required Lenders" means Lenders in the aggregate having at least 66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid principal amount of the outstanding Loans.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions.
"Non-U.S. Lender" is defined in SECTION 3.5(d).
"Note" is defined in SECTION 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrower to the Lenders or to any Lender, the Agent or any indemnified party arising under the Loan Documents.
"Other Taxes" is defined in SECTION 3.5(b).
"Participants" is defined in SECTION 12.2.1.
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"Payment Date" means the last day of each March, June, September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"Person" means any natural person, corporation, firm, joint venture, partnership, association, enterprise, limited liability company, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as defined in Section 3(2) of ERISA, as to which the Borrower or any member of the Controlled Group may have any liability.
"Post-Spin-Off Group" means the Borrower and each of its Subsidiaries but excluding any member of the CSC Group.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.
"Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
"pro-rata" means, when used with respect to a Lender, and any described aggregate or total amount, an amount equal to such Lender's pro-rata share or portion based on its percentage of the Aggregate Commitment or if the Aggregate Commitment has been terminated, its percentage of the aggregate principal amount of outstanding Advances.
"Purchasers" is defined in SECTION 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to depositary institutions.
"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks and certain other Persons for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System and certain other Persons.
"Release" is defined in the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. 39601 ET SEQ.
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"Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event; PROVIDED, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 51% of the aggregate unpaid principal amount of the outstanding Loans.
"Reserve Requirement" means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.
"Risk-Based Capital Guidelines" is defined in SECTION 3.2.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto.
"Schedule" refers to a specific schedule to this Agreement, unless another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group.
"Subsidiary" of a Person means (a) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower and its Subsidiaries, Property which (a) represents more than 10% of the consolidated assets of the Borrower and its Subsidiaries, as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries as at the end of the quarter next preceding the date on which such determination is made, or (b) is responsible for more than 10% of the consolidated net sales or of
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the consolidated net income of the Borrower and its Subsidiaries for the 12-month period ending as of the end of the quarter next preceding the date of determination.
"Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but EXCLUDING Excluded Taxes and Other Taxes.
"Termination Event" means, with respect to a Plan which is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any other member of the Controlled Group from such Plan during a plan year in which the Borrower or any other member of the Controlled Group was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a notice of intent to terminate such Plan or the treatment of an amendment of such Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Plan or (e) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Plan.
"364-Day Agreement" means that certain 364-Day Credit Agreement dated as of the date hereof among the Borrower, Bank One, as agent, and the lenders party thereto, as from time to time amended, restated or otherwise modified.
"Total Plan Liability" means, at any time, the present value of all vested and unvested accrued benefits under all Single Employer Plans, determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
"Transferee" is defined in SECTION 12.4.
"Transitional Services" means the services to be provided by the Post-Spin-Off Group to the CSC Group, including but not limited to human resource administration services, IT and telecommunications support and services, payroll, salary and employee benefits services, tax, audit and accounting services, legal services, treasury services (cash investment, foreign exchange, derivatives and hedging), intellectual property licensing, premium financing services, claims administration services and benefits/brokerage consultancy and risk management services.
"Type" means, with respect to any Advance, its nature as an Alternate Base Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
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"Unmatured Default" means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person, or (b) any partnership, association, joint venture, limited liability company or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise provided, all references herein to a "Wholly-Owned Subsidiary" shall mean a Wholly-Owned Subsidiary of the Borrower.
The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. COMMITMENT. From and including the date of this Agreement to the Facility Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Loans to the Borrower from time to time in amounts not to exceed in the aggregate at any one time outstanding the amount of its Commitment. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Facility Termination Date.
2.2. REQUIRED PAYMENTS; TERMINATION. Any outstanding Advances and all other unpaid Obligations shall be paid in full by the Borrower on the Facility Termination Date.
2.3. RATABLE LOANS. Each Advance hereunder shall consist of Loans made from the several Lenders ratably in proportion to the ratio that their respective Commitments bear to the Aggregate Commitment.
2.4. TYPES OF ADVANCES. The Advances may be Alternate Base Rate Advances or Eurodollar Advances, or a combination thereof, selected by the Borrower in accordance with SECTIONS 2.8 and 2.9.
2.5. FACILITY FEE; UTILIZATION FEE; REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower agrees to pay to the Agent for the account of each Lender a facility fee at a per annum rate equal to the Applicable Facility Fee Rate on such Lender's Commitment from the date hereof to and including the Facility Termination Date, payable on each Payment Date hereafter and on the Facility Termination Date. The Borrower also agrees to pay to the Agent for the ratable (based on Commitment amounts) account of the Lenders a utilization fee for each day from the date hereof to and including the later of the Facility Termination Date and the date all Loans are paid in full and all Commitments are terminated, such utilization fee to be equal to the Applicable Utilization Fee Rate for such day multiplied by the outstanding principal amount of the Loans on such day, payable on each Payment Date and on the Facility Termination Date.
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The Borrower may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in a minimum aggregate amount of $25,000,000 or any integral multiple of $5,000,000 in excess thereof, upon at least two (2) Business Days' written notice to the Agent, which notice shall specify the amount of any such reduction, PROVIDED, HOWEVER, that the amount of the Aggregate Commitment may not be reduced below the aggregate principal amount of the outstanding Advances. All accrued facility and utilization fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be in the minimum amount of $25,000,000 (and in multiples of $5,000,000 if in excess thereof); PROVIDED, HOWEVER, that (a) any Alternate Base Rate Advance may be in the amount of the unused Aggregate Commitment and (b) in no event shall more than six (6) Eurodollar Advances be permitted to be outstanding at any time.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay, without penalty or premium, all outstanding Alternate Base Rate Advances, or, in a minimum aggregate amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion of the outstanding Alternate Base Rate Advances upon notice to the Agent by 10:00 a.m. on the Business Day of the proposed prepayment. The Borrower may from time to time pay, subject to the payment of any funding indemnification amounts required by SECTION 3.4 but without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion of an outstanding Eurodollar Advance, upon two
(2) Business Days' prior notice to the Agent.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto from time to time; PROVIDED, HOWEVER, that in the event Loans are incurred on the date of this Agreement, all Loans incurred on such date shall be Alternate Base Rate Advances. The Borrower shall give the Agent irrevocable notice (a "BORROWING NOTICE") not later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Alternate Base Rate Advance and at least three (3) Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date of such Advance, which shall be a Business Day;
(b) the aggregate amount of such Advance;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Advance, the Interest Period applicable thereto, which shall end on or prior to the Facility Termination Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall make available its Loan or Loans, in funds immediately available in Chicago, to the Agent at its address specified pursuant to ARTICLE XIII. The Agent will make the funds so received from the Lenders available to the Borrower at the Agent's aforesaid address.
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2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Each Alternate Base Rate Advance shall continue as an Alternate Base Rate Advance unless and until such Alternate Base Rate Advance is converted into a Eurodollar Advance pursuant to this SECTION 2.9 or is repaid in accordance with SECTION 2.7. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into an Alternate Base Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with SECTION 2.7 or (y) the Borrower shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of SECTION 2.6, the Borrower may elect from time to time to convert all or any part of an Alternate Base Rate Advance into a Eurodollar Advance. The Borrower shall give the Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of an Alternate Base Rate Advance into a Eurodollar Advance or of continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time) on the date of a conversion into an Alternate Base Rate Advance, or at least three (3) Business Days, in the case of a conversion into or continuation of a Eurodollar Advance, prior to the date of the requested conversion or continuation, specifying:
(a) the requested date of such conversion or continuation, which shall be a Business Day;
(b) the aggregate amount and Type of the Advance which is to be converted or continued; and
(c) the amount and Type(s) of Advance(s) into which such Advance is to be converted or continued and, in the case of a conversion into or continuation of a Eurodollar Advance, the duration of the Interest Period applicable thereto, which shall end on or prior to the Facility Termination Date.
2.10. CHANGES IN INTEREST RATE, ETC. Each Alternate Base Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is converted from a Eurodollar Advance into an Alternate Base Rate Advance pursuant to SECTION 2.9, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to SECTION 2.9 hereof, at a rate per annum equal to the Alternate Base Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as an Alternate Base Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the Eurodollar Rate determined by the Agent as applicable to such Eurodollar Advance based upon the Borrower's selections under SECTIONS 2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest Period may end after the Facility Termination Date. The Borrower shall select Interest Periods so that it is not necessary to repay any portion of a Eurodollar Advance prior to the last day of the applicable Interest Period in order to make a mandatory repayment required pursuant to SECTION 2.2.
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2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the contrary contained in SECTION 2.8 or 2.9, no Advance may be made as, converted into or continued as a Eurodollar Advance (except with the consent of the Agent and the Required Lenders) when any Default or Unmatured Default has occurred and is continuing. During the continuance of a Default the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of SECTION 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that (a) each Eurodollar Advance shall bear interest for the remainder of the applicable Interest Period at the Eurodollar Rate otherwise applicable to such Interest Period plus 1% per annum and (b) each Alternate Base Rate Advance shall bear interest at a rate per annum equal to the Alternate Base Rate in effect from time to time plus 1% per annum, PROVIDED that, during the continuance of a Default under SECTION 7.6 or 7.7, the interest rates set forth in clauses (a) and (b) above shall be applicable to all Advances without any election or action on the part of the Agent or any Lender.
2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be made, without setoff, deduction or counterclaim, in immediately available funds to the Agent at the Agent's address specified pursuant to ARTICLE XIII, or at any other Lending Installation of the Agent specified in writing by the Agent to the Borrower, by noon (Chicago time) on the date when due and shall be applied ratably by the Agent among the Lenders. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified pursuant to ARTICLE XIII or at any Lending Installation specified in a notice received by the Agent from such Lender. The Agent is hereby authorized to charge the account of the Borrower maintained with Bank One for each payment of principal, interest and fees as it becomes due hereunder.
2.13. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to PARAGRAPHS (a) and (b) above shall be PRIMA FACIE evidence of the existence and amounts of the Obligations therein recorded; PROVIDED, HOWEVER, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.
(d) Any Lender may request that its Loans be evidenced by a promissory note in substantially the form of EXHIBIT A (including any amendment, modification, renewal or replacement thereof, a "NOTE"). In such event, the Borrower shall prepare, execute and
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deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after any assignment pursuant to SECTION 12.3) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to SECTION 12.3, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in PARAGRAPHS (a) and (b) above. Upon receipt of an affidavit of an officer of any Lender as to the loss, theft, destruction or mutilation of such Lender's Note, and, in the case of any such loss, theft destruction or mutilation, upon cancellation of such Note, the Borrower will issue, in lieu thereof, a replacement Note in the same principal amount thereof and otherwise of like tenor.
2.14. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders and the Agent to extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be acting on behalf of the Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. The Borrower agrees to deliver promptly to the Agent a written confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error.
2.15. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued on each Alternate Base Rate Advance shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which an Alternate Base Rate Advance is prepaid, whether due to acceleration or otherwise, and at maturity. Interest accrued on that portion of the outstanding principal amount of any Alternate Base Rate Advance converted into a Eurodollar Advance on a day other than a Payment Date shall be payable on the date of conversion. Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having an Interest Period longer than three (3) months shall also be payable on the last day of each three-month interval during such Interest Period. Interest with respect to Eurodollar Loans, facility fees and utilization fees shall be calculated for actual days elapsed on the basis of a 360-day year. Interest with respect to Alternate Base Rate Loans shall be calculated for the actual days elapsed on the basis of a 365 or 366-day year, as applicable. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is made in full and received prior to noon (Chicago time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment.
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2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. The Agent will notify each Lender of the Eurodollar Rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate.
2.17. LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending Installation selected by such Lender and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation and the Loans and any Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending Installation. Each Lender may, by written notice to the Agent and the Borrower in accordance with ARTICLE XIII, designate replacement or additional Lending Installations through which Loans will be made by it and for whose account Loan payments are to be made.
2.18. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan, or (b) in the case of the Borrower, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three (3) days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. REPLACEMENT OF LENDER. If the Borrower is required pursuant to
SECTION 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender's obligation to make or continue, or to convert Alternate Base Rate Advances into, Eurodollar Advances shall be suspended pursuant to SECTION 3.3 (any Lender so affected an "AFFECTED LENDER"), the Borrower may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, PROVIDED that no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and PROVIDED FURTHER that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an assignment substantially in the form of EXHIBIT C and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of
SECTION 12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected Lender in same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the
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Borrower hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under SECTIONS 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under SECTION 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the date of this Agreement, the adoption of any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change in the interpretation or administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:
(a) subjects any Lender or any applicable Lending Installation to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender in respect of its Eurodollar Loans, or
(b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining its Eurodollar Loans or reduces any amount receivable by any Lender or any applicable Lending Installation in connection with its Eurodollar Loans, or requires any Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of Eurodollar Loans held or interest received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation of making or maintaining its Eurodollar Loans or Commitment or to reduce the return received by such Lender or applicable Lending Installation in connection with such Eurodollar Loans or Commitment, then, within fifteen (15) days of demand by such Lender, the Borrower shall pay such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction in amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a Change, then, within fifteen (15) days of demand by such Lender, the Borrower shall pay such Lender the
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amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Agreement, its Loans or its Commitment to make Loans hereunder (after taking into account such Lender's policies as to capital adequacy). "CHANGE" means (a) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (b) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any Person controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (a) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices entitled "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that maintenance of its Eurodollar Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, interpretation or directive, whether or not having the force of law, or if the Required Lenders determine that (a) deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available or (b) the interest rate applicable to Eurodollar Advances does not accurately or fairly reflect the cost of making or maintaining Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be repaid or converted to Alternate Base Rate Advances, subject to the payment of any funding indemnification amounts required by SECTION 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance occurs on a date prior to the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5. TAXES. (a) All payments by the Borrower to or for the account of any Lender or the Agent hereunder or under any Note shall be made free and clear of and without deduction for any and all Taxes. If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 3.5) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (iv) the Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof within thirty (30) days after such payment is made.
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(b) In addition, the Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note ("OTHER TAXES").
(c) The Borrower hereby agrees to indemnify the Agent and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this
SECTION 3.5) paid by the Agent or such Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty (30) days of the date the Agent or such Lender makes demand therefor pursuant to SECTION 3.6.
(d) Each Lender that is not incorporated under the laws of the United States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it will, not more than ten (10) Business Days after the date of this Agreement, (i) deliver to each of the Borrower and the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, and (ii) deliver to each of the Borrower and the Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from United States backup withholding tax. Each Non-U.S. Lender further undertakes, to the extent lawful at such time, to deliver to each of the Borrower and the Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Borrower or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, UNLESS an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide the Borrower with an appropriate form pursuant to CLAUSE (d), above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this SECTION 3.5 with respect to Taxes imposed by the United States; PROVIDED that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its
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failure to deliver a form required under CLAUSE (d), above, the Borrower shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason not caused by or constituting gross negligence or willful misconduct of the Agent), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under this subsection, together with all reasonable costs and expenses related thereto (including reasonable attorneys fees and reasonable time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The obligations of the Lenders under this SECTION 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrower to such Lender under SECTIONS 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under SECTION 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrower (with a copy to the Agent) as to the amount due, if any, under SECTION 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrower in the absence of manifest error. The Borrower shall have no obligation to reimburse, compensate or indemnify any Lender with respect to a claim under this ARTICLE III if the Lender fails to deliver such written statement within 180 days after the date on which the Lender becomes aware of the event or occurrence giving rise to such claim. Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrower of such written statement. The
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obligations of the Borrower under SECTIONS 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. EFFECTIVENESS. This Agreement shall not become effective unless and until the Borrower has furnished the following to the Agent with sufficient copies for the Lenders and the other conditions set forth below have been satisfied:
(a) CHARTER DOCUMENTS; GOOD STANDING CERTIFICATES. Copies of the certificate of incorporation of the Borrower, together with all amendments thereto, both certified by the appropriate governmental officer in its jurisdiction of incorporation, together with a good standing certificate issued by the Secretary of State of the jurisdiction of its incorporation and such other jurisdictions as shall be requested by the Agent.
(b) BY-LAWS AND RESOLUTIONS. Copies, certified by the Secretary or Assistant Secretary of the Borrower, of its by-laws and of its Board of Directors' resolutions authorizing the execution, delivery and performance of the Loan Documents by the Borrower.
(c) SECRETARY'S CERTIFICATE. An incumbency certificate, executed by the Secretary or Assistant Secretary of the Borrower, which shall identify by name and title and bear the signature of the officers of the Borrower authorized to sign the Loan Documents and to make borrowings hereunder, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Borrower.
(d) OFFICER'S CERTIFICATE. A certificate, dated the date of this Agreement, signed by an Authorized Officer of the Borrower, in form and substance satisfactory to the Agent, to the effect that: (i) on such date (both before and after giving effect to the making of any Loans hereunder on such date) no Default or Unmatured Default has occurred and is continuing; (ii) each of the representations and warranties set forth in ARTICLE V of this Agreement is true and correct on and as of such date; and (iii) since December 31, 2000 no event or change has occurred that has caused or evidences a Material Adverse Effect.
(e) LEGAL OPINIONS. Written opinions of internal counsel to the Borrower and of Sidley Austin Brown & Wood, special counsel to the Borrower, addressed to the Agent and the Lenders in form and substance acceptable to the Agent and its counsel.
(f) NOTES. Any Notes requested by a Lender pursuant to SECTION 2.13 payable to the order of each such requesting Lender.
(g) LOAN DOCUMENTS. Executed originals of this Agreement and each of the Loan Documents, which shall be in full force and effect, together with all schedules, exhibits, certificates, instruments, opinions, documents and financial statements required to be delivered pursuant hereto and thereto.
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(h) LETTERS OF DIRECTION. Written money transfer instructions in form and substance acceptable to the Agent and its counsel addressed to the Agent and signed by an Authorized Officer, together with such other related money transfer authorizations as the Agent may have reasonably requested.
(i) PAYMENT OF FEES. The Borrower shall have paid all fees due to Bank One under the fee letter dated November 28, 2001.
(j) EXISTING CREDIT AGREEMENTS. The Existing Credit Agreements shall have expired or been terminated and all amounts owing thereunder (including all principal, interest and accrued fees) shall have been paid (or shall contemporaneously be paid) in full.
(k) OTHER. Such other documents as the Agent, any Lender or their counsel may have reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and none would result from such Advance;
(b) The representations and warranties contained in ARTICLE V (other than SECTION 5.6) are true and correct as of such Borrowing Date;
(c) A Borrowing Notice shall have been properly submitted; and
(d) All legal matters incident to the making of such Advance shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute a representation and warranty by the Borrower that the conditions contained in
SECTION 4.2 have been satisfied. Any Lender may require a duly completed compliance certificate in substantially the form of EXHIBIT B hereto as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and its Subsidiaries is a corporation duly and properly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and is duly qualified and in good standing as a foreign corporation and is duly authorized to conduct its business in each jurisdiction in which its business is conducted or proposed to be conducted except where failure to be so qualified or authorized could not reasonably be expected to have a Material Adverse Effect.
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5.2. AUTHORIZATION AND VALIDITY. The Borrower has all requisite power and authority (corporate and otherwise) and legal right to execute and deliver each of the Loan Documents and to perform its obligations thereunder. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder have been duly authorized by proper corporate proceedings and the Loan Documents constitute legal, valid and binding obligations of the Borrower enforceable against the Borrower, in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally.
5.3. COMPLIANCE WITH LAWS AND CONTRACTS. The Borrower and its Subsidiaries have complied in all material respects with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof, having jurisdiction over the conduct of their respective businesses or the ownership of their respective properties, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Neither the execution and delivery by the Borrower of the Loan Documents, the application of the proceeds of the Loans, or any other transaction contemplated in the Loan Documents, nor compliance with the provisions of the Loan Documents will, or at the relevant time did, (a) violate any law, rule, regulation (including Regulation U), order, writ, judgment, injunction, decree or award binding on the Borrower or any Subsidiary or the Borrower's or any Subsidiary's charter, articles or certificate of incorporation or by-laws, (b) violate the provisions of or require the approval or consent of any party to any indenture, instrument or agreement to which the Borrower or any Subsidiary is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien (other than Liens permitted by the Loan Documents) in, of or on the property of the Borrower or any Subsidiary pursuant to the terms of any such indenture, instrument or agreement, or (c) require any consent of the stockholders of any Person, except for any violation of, or failure to obtain an approval or consent required under, any such indenture, instrument or agreement that could not reasonably be expected to have a Material Adverse Effect.
5.4. GOVERNMENTAL CONSENTS. No order, consent, approval, qualification, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of, any court, governmental or public body or authority, or any subdivision thereof, any securities exchange or other Person is or at the relevant time was required to authorize, or is or at the relevant time was required in connection with the execution, delivery, consummation or performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents, the application of the proceeds of the Loans or any other transactions contemplated in the Loan Documents. Neither the Borrower nor any Subsidiary is in default under or in violation of any foreign, federal, state or local law, rule, regulation, order, writ, judgment, injunction, decree or award binding upon or applicable to the Borrower or such Subsidiary, in each case the consequence of which default or violation could reasonably be expected to have a Material Adverse Effect.
5.5. FINANCIAL STATEMENTS. The Borrower has heretofore furnished to each of the Lenders (a) the December 31, 2000 audited consolidated financial statements of the Borrower
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and its Subsidiaries, and (b) the unaudited consolidated financial statements of the Borrower and its Subsidiaries through September 30, 2001 (collectively, the "FINANCIAL STATEMENTS"). Each of the Financial Statements was prepared in accordance with Agreement Accounting Principles and fairly presents the consolidated financial condition and operations of the Borrower and its Subsidiaries at such dates and the consolidated results of their operations for the respective periods then ended (except, in the case of such unaudited statements, for normal year-end audit adjustments).
5.6. MATERIAL ADVERSE CHANGE. Since December 31, 2000, there has been no change in the business, Property, condition (financial or otherwise), performance, prospects or results of operations of the Borrower and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect.
5.7. TAXES. The Borrower and its Subsidiaries have filed or caused to be filed on a timely basis and in correct form all United States federal, state and other material tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Borrower or any Subsidiary, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists. As of the date hereof, the United States income tax returns of the Borrower on a consolidated basis have been audited by the Internal Revenue Service through its Fiscal Year ending December 31, 1989. No tax liens have been filed and no claims are being asserted with respect to any such taxes which could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of any taxes or other governmental charges are in accordance with Agreement Accounting Principles.
5.8. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation, arbitration, proceeding, inquiry or governmental investigation (including, without limitation, by the Federal Trade Commission) pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any Subsidiary or any of their respective Properties that could reasonably be expected to have a Material Adverse Effect or to prevent, enjoin or unduly delay the making of the Loans under this Agreement.
5.9. ERISA. The Unfunded Liability of all Single Employer Plans does not in the aggregate exceed twenty percent (20%) of the Total Plan Liability for all Single Employer Plans. Neither the Borrower nor any other member of the Controlled Group maintains, or is obligated to contribute to, any Multiemployer Plan or has incurred, or is reasonably expected to incur, any withdrawal liability to any Multiemployer Plan. Each Plan complies in all material respects with all applicable requirements of law and regulations. Neither the Borrower nor any member of the Controlled Group has, with respect to any Plan, failed to make any contribution or pay any amount required under Section 412 of the Code or Section 302 of ERISA or the terms of such Plan which could reasonably be expected to have a Material Adverse Effect. There are no pending or, to the knowledge of the Borrower, threatened claims, actions, investigations or lawsuits against any Plan, any fiduciary thereof, or the Borrower or any member of the Controlled Group with respect to a Plan which could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any member of the Controlled Group has engaged in
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any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in connection with any Plan which would subject such Person to any material liability. Within the last five (5) years neither the Borrower nor any member of the Controlled Group has engaged in a transaction which resulted in a Single Employer Plan with an Unfunded Liability being transferred out of the Controlled Group which could reasonably be expected to have a Material Adverse Effect. No Termination Event has occurred or is reasonably expected to occur with respect to any Plan which is subject to Title IV of ERISA which could reasonably be expected to have a Material Adverse Effect.
5.10. DEFAULTS. No Default or Unmatured Default has occurred and is continuing.
5.11. REGULATION U. Margin Stock constitutes less than 25% of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder. Neither the Borrower nor any Subsidiary is engaged, directly or indirectly, principally, or as one of its important activities, in the business of extending, or arranging for the extension of, credit for the purpose of purchasing or carrying Margin Stock. No part of the proceeds of any Loan will be used in a manner which would violate, or result in a violation of, Regulation U. Neither the making of any Advance hereunder nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation U.
5.12. INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither the Borrower nor any Subsidiary is, or after giving effect to any Advance will be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Neither the Borrower nor any Subsidiary is a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.13. OWNERSHIP OF PROPERTIES. As of the date of this Agreement, the Borrower and its Subsidiaries have a subsisting leasehold interest in, or good and marketable title, free of all Liens, other than those permitted by SECTION 6.12 or by any of the other Loan Documents, to all of the properties and assets reflected in the Financial Statements as being owned by it, except for assets sold, transferred or otherwise disposed of in the ordinary course of business or as required by or in connection with the CSC Spin-Off (provided that such sale, transfer or other disposal in connection with the CSC Spin-Off could not reasonably be expected to have a Material Adverse Effect) since the date thereof. The Borrower and its Subsidiaries own or possess rights to use all licenses, patents, patent applications, copyrights, service marks, trademarks and trade names necessary to continue to conduct their business as heretofore conducted, and no such license, patent or trademark has been declared invalid, been limited by order of any court or by agreement or is the subject of any infringement, interference or similar proceeding or challenge, except for proceedings and challenges which could not reasonably be expected to have a Material Adverse Effect.
5.14. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect or which restricts or imposes conditions upon the ability of any Subsidiary to (a) pay dividends or make other distributions on
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its capital stock, (b) make loans or advances to the Borrower or (c) repay loans or advances from the Borrower. Neither the Borrower nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement to which it is a party, which default could reasonably be expected to have a Material Adverse Effect.
5.15. ENVIRONMENTAL LAWS. There are no claims, investigations, litigation, administrative proceedings, notices, requests for information (each a "PROCEEDING"), whether pending or threatened, or judgments or orders asserting violations of applicable federal, state and local environmental, health and safety statutes, regulations, ordinances, codes, rules, orders, decrees, directives and standards ("ENVIRONMENTAL LAWS") or relating to any toxic or hazardous waste, substance or chemical or any pollutant, contaminant, chemical or other substance defined or regulated pursuant to any Environmental Law, including, without limitation, asbestos, petroleum, crude oil or any fraction thereof ("HAZARDOUS MATERIALS") asserted against the Borrower or any of its Subsidiaries which, in any case, could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary has caused or permitted any Hazardous Materials to be released, either on or under real property, currently or formerly, legally or beneficially owned or operated by the Borrower or any Subsidiary or on or under real property to which the Borrower or any of its Subsidiaries transported, arranged for the transport or disposal of, or disposed of Hazardous Materials, which release could reasonably be expected to have a Material Adverse Effect.
5.16. INSURANCE. The Borrower and its Subsidiaries maintain, with financially sound and reputable insurance companies, insurance on their Property in such amounts and covering such risks as is consistent with sound business practice.
5.17. INSURANCE LICENSES. No material license, permit or authorization of the Borrower or any Subsidiary to engage in the business of insurance or insurance-related activities is the subject of a proceeding for suspension or revocation, except where such suspension or revocation would not individually or in the aggregate have a Material Adverse Effect.
5.18. SOLVENCY. Immediately after the consummation of the CSC Spin-Off and the making of any Loans related thereto, (a) the fair value of the assets of the Post-Spin-Off Group on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Post-Spin-Off Group on a consolidated basis; (b) the present fair saleable value of the Property of the Post-Spin-Off Group on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Post-Spin-Off Group on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) the Post-Spin-Off Group on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Post-Spin-Off Group on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and as proposed to be conducted taking into account the CSC Spin-Off.
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5.19. DISCLOSURE. None of the (a) information, exhibits or reports furnished or to be furnished by the Borrower or any Subsidiary to the Agent or to any Lender in connection with the negotiation of the Loan Documents, or (b) representations or warranties of the Borrower or any Subsidiary contained in this Agreement, the other Loan Documents, or any other document, certificate or written statement furnished to the Agent or the Lenders by or on behalf of the Borrower or any Subsidiary for use in connection with the transactions contemplated by this Agreement, as the case may be, contained, contains or will contain any untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. As of the date hereof, there is no fact known to the Borrower (other than matters of a general economic nature) that has had or could reasonably be expected to have a Material Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and each Subsidiary, a system of accounting established and administered in accordance with generally accepted accounting principles, consistently applied, and will furnish to the Lenders:
(a) As soon as practicable and in any event within ninety (90) days after the close of each of its Fiscal Years, an unqualified audit report certified by independent certified public accountants, acceptable to the Lenders, prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, including balance sheets as of the end of such period and related statements of income, retained earnings and cash flows accompanied by (i) any management letter prepared by said accountants and (ii) a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof.
(b) As soon as practicable and in any event within 45 days after the close of the first three Fiscal Quarters of each of its Fiscal Years, for itself and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated statements of income, retained earnings and cash flows for the period from the beginning of such Fiscal Year to the end of such quarter, all certified by its chief financial officer.
(c) Together with the financial statements required by CLAUSES
(a) and (b) above, a compliance certificate in substantially the form of EXHIBIT B hereto signed by its chief financial officer showing the calculations necessary to determine compliance with this
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Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.
(d) Within 270 days after the close of each Fiscal Year, a statement of the Unfunded Liabilities of each Single Employer Plan, certified as correct by an actuary enrolled under ERISA.
(e) As soon as possible and in any event within ten (10) days after the Borrower knows that any Termination Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of the Borrower, describing said Termination Event and the action which the Borrower proposes to take with respect thereto.
(f) As soon as possible and in any event within ten (10) days after the Borrower learns thereof, notice of the assertion or commencement of any claims, action, suit or proceeding against or affecting the Company or any Subsidiary which may reasonably be expected to have a Material Adverse Effect.
(g) Promptly upon learning thereof, notice of any change in the credit rating of the Borrower's senior unsecured long term debt by S&P or Moody's.
(h) Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of all financial statements, reports and proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission.
(j) Promptly upon learning thereof, notice of the completion of the CSC Spin-Off.
(k) Such other information (including, without limitation, non-financial information) as the Agent or any Lender may from time to time reasonably request.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary to, use the proceeds of the Advances to meet the general corporate needs of the Borrower and its Subsidiaries, including commercial paper support. The Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any "margin stock" (as defined in Regulation U) or to finance the acquisition of any Person which has not been approved and recommended by the board of directors (or functional equivalent thereof) of such Person.
6.3. NOTICE OF DEFAULT. The Borrower will give prompt notice in writing to the Lenders of the occurrence of (a) any Default or Unmatured Default and (b) of any other event or development, financial or other, relating specifically to the Borrower or any of its Subsidiaries (and not of a general economic or political nature) which could reasonably be expected to have a Material Adverse Effect.
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6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and to do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; PROVIDED, HOWEVER, that nothing in this SECTION 6.4 shall prohibit (a) the dissolution or sale, transfer or other disposition of any Subsidiary that is not otherwise prohibited by this Agreement or (b) the occurrence of the CSC Spin-Off and the provision of the Transitional Services.
6.5. TAXES. The Borrower will, and will cause each Subsidiary to, timely file complete and correct United States federal and applicable foreign, state and local tax returns required by applicable law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies insurance on all their Property in such amounts and covering such risks as is consistent with sound business practice, and the Borrower will furnish to the Agent and any Lender upon request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, the failure to comply with which could reasonably be expected to have a Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each Subsidiary to, do all things necessary to maintain, preserve, protect and keep its Property in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times.
6.9. INSPECTION. The Borrower will, and will cause each Subsidiary to, permit the Agent and the Lenders, by their respective representatives and agents, to inspect any of the Property, corporate books and financial records of the Borrower and each Subsidiary, to examine and make copies of the books of accounts and other financial records of the Borrower and each Subsidiary, and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Lenders may designate. The Borrower will keep or cause to be kept, and cause each Subsidiary to keep or cause to be kept, appropriate records and books of account in which complete entries are to be made reflecting its and their business and financial transactions, such entries to be made in accordance with Agreement Accounting Principles consistently applied.
6.10. CAPITAL STOCK AND DIVIDENDS. So long as any Default or Unmatured Default has occurred and is continuing, the Borrower will not declare or pay any dividends or make any
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distributions on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock or any options or other rights in respect thereof at any time outstanding, other than any such dividend or distribution required in connection with the CSC Spin-Off; PROVIDED that no such dividend or distribution could reasonably be expected to have a Material Adverse Effect.
6.11. MERGER. Except with respect to any transaction or step required in connection with the CSC Spin-Off (provided that no such transaction or step could reasonably be expected to have a Material Adverse Effect), the Borrower will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that (a) a Wholly-Owned Subsidiary may merge into the Borrower or any Wholly-Owned Subsidiary of the Borrower, (b) the Borrower or any Subsidiary may merge or consolidate with any other Person so long as the Borrower or such Subsidiary is the continuing or surviving corporation and, prior to and after giving effect to such merger or consolidation, no Default or Unmatured Default shall exist, and (c) any Subsidiary may enter into a merger or consolidation as a means of effecting a disposition or acquisition which would not result in a Default or Unmatured Default.
6.12. LIENS. The Borrower will not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with generally accepted principles of accounting shall have been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure the payment of obligations not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or the Subsidiaries;
(e) Encumbrances over and limited to the balance of credit balances on bank accounts of the Borrower and its Subsidiaries created in order to facilitate the operation of such bank accounts and other bank accounts of the Borrower and its Subsidiaries on a net balance
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basis with credit balances and debit balances on the various accounts being netted off for interest purposes;
(f) Any Lien arising by operation of law in the ordinary course of trading in respect of any obligation which is less than sixty (60) days overdue or which is being contested in good faith and by appropriate means and for which adequate reserves have been made;
(g) Encumbrances created by any of the Borrower or its Subsidiaries over deposits and investments in the ordinary course of such Person's insurance and reinsurance trade to comply with the requirements of any regulatory body of insurance or insurance broking business; and
(h) Other Liens securing an aggregate principal amount of obligations at no time exceeding an amount equal to ten percent (10%) of Consolidated Net Worth at such time; PROVIDED, HOWEVER that during any period when the sum of (i) the aggregate principal amount of all obligations secured pursuant to this SECTION 6.12(h) plus (ii) the aggregate Unfunded Liability of all Single Employer Plans exceeds ten percent (10%) of Consolidated Net Worth, the creation of additional Liens otherwise allowed hereunder shall be permitted by this SECTION 6.12(h) only to the extent they secure an aggregate principal amount of obligations not in excess of one percent (1%) of Consolidated Net Worth.
6.13. AFFILIATES. The Borrower will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except (a) for transactions between the Borrower and any Wholly-Owned Subsidiary of the Borrower or between Wholly-Owned Subsidiaries of the Borrower, (b) in the ordinary course of business and pursuant to the reasonable requirements of the Borrower's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms-length transaction and (c) as required in connection with the CSC Spin-Off; PROVIDED that no such transaction, payment or transfer could reasonably be expected to have a Material Adverse Effect.
6.14. CHANGE IN FISCAL YEAR. The Borrower shall not change its Fiscal Year to end on any date other than December 31 of each year.
6.15. INCONSISTENT AGREEMENTS. The Borrower shall not, nor shall it permit any Subsidiary to, enter into any indenture, agreement, instrument or other arrangement which, (a) directly or indirectly prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon, the incurrence of the Obligations, the amending of the Loan Documents or the ability of any Subsidiary to (i) pay dividends or make other distributions on its capital stock, (ii) make loans or advances to the Borrower or (iii) repay loans or advances from the Borrower or (b) contains any provision which would be violated or breached by the making of Advances or by the performance by the Borrower of any of its obligations under any Loan Document.
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6.16. SALE OF ASSETS. Except with respect to any transaction or step required in connection with the CSC Spin-Off (provided that no such transaction or step could reasonably be expected to have a Material Adverse Effect), the Borrower will not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of Property which represents more than 25% of the consolidated assets of the Borrower and its Subsidiaries, as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries as at the end of the quarter immediately preceding the date on which such determination is made, to any other Person(s) in any Fiscal Year.
6.17. FINANCIAL COVENANTS.
6.17.1. MINIMUM CONSOLIDATED NET WORTH. The Borrower shall at all times prior to the CSC Spin-Off maintain a minimum Consolidated Net Worth of at least $2,500,000,000 and shall at all times from and after the CSC Spin-Off maintain a minimum Consolidated Net Worth of at least $2,000,000,000.
6.17.2. CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE. The Borrower will maintain, as at the last day of each of its fiscal quarters, a ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense, in each case calculated for the four fiscal quarters then ending, of not less than 4.0 to 1.0.
6.18. ERISA. The Borrower will (a) fulfill, and cause each member of the Controlled Group to fulfill, its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan, except where a failure to fulfill such obligations individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, (b) comply, and cause each member of the Controlled Group to comply, with all applicable provisions of ERISA and the Code with respect to each Plan, except where such failure or noncompliance individually or in the aggregate would not have a Material Adverse Effect and
(c) not, and not permit any member of the Controlled Group to, (i) seek a waiver of the minimum funding standards under ERISA, (ii) terminate or withdraw from any Plan or (iii) take any other action with respect to any Plan which would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to administer, any Plan, unless the actions or events described in the foregoing clauses (i), (ii) or (iii) individually or in the aggregate would not have a Material Adverse Effect.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or in connection with this Agreement, any other Loan Document, any Loan, or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be false in any material respect on the date as of which made or deemed made.
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7.2. Nonpayment of (a) any principal of any Loan when due, or (b) any interest upon any Loan or any facility fee, utilization fee or other fee or obligations under any of the Loan Documents within five (5) days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
SECTION 6.2, SECTION 6.3(a) or SECTIONS 6.10 through 6.18.
7.4. The breach by the Borrower (other than a breach which constitutes a Default under SECTION 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement which is not remedied within twenty (20) days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any Indebtedness aggregating in excess of $25,000,000 when due; or the default by the Borrower or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement or agreements under which any such Indebtedness was created or is governed, or the occurrence of any other event or existence of any other condition, the effect of any of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (b) make an assignment for the benefit of creditors, (c) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (d) institute any proceeding seeking an order for relief under the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (e) take any corporate action to authorize or effect any of the foregoing actions set forth in this SECTION 7.6, (f) fail to contest in good faith any appointment or proceeding described in SECTION 7.7 or (g) become unable to pay, not pay, or admit in writing its inability to pay, its debts generally as they become due.
7.7. Without the application, approval or consent of the Borrower or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Borrower or any of its Subsidiaries or any Substantial Portion of its Property, or a proceeding described in SECTION 7.6(d) shall be instituted against the Borrower or any of its Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty (60) consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of (each a "CONDEMNATION"), all or any portion of the Property of the Borrower and its Subsidiaries which, when taken together with all other Property of the Borrower and its Subsidiaries so condemned, seized, appropriated, or taken custody or
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control of, during the twelve-month period ending with the month in which any such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within thirty
(30) days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $25,000,000 (or multiple judgments or orders for the payment of an aggregate amount in excess of $50,000,000), which is not stayed on appeal or otherwise being appropriately contested in good faith and as to which no enforcement actions have been commenced.
7.10. Any Change in Control shall occur.
7.11. The Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate twenty percent (20%) of the Total Plan Liability for all Single Employer Plans or any Termination Event shall occur in connection with any Plan which could reasonably be expected to have a Material Adverse Effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in SECTION 7.6 or 7.7 occurs with respect to the Borrower, the obligations of the Lenders to make Loans hereunder shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Agent or any Lender. If any other Default occurs, the Required Lenders (or the Agent with the consent or upon the instruction of the Required Lenders) may terminate or suspend the obligations of the Lenders to make Loans hereunder, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives.
If, within ten (10) Business Days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans hereunder as a result of any Default (other than any Default as described in
SECTION 7.6 or 7.7 with respect to the Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (or, in the case of an acceleration and/or termination upon the occurrence of a Default under SECTION 7.10, the Modified Required Lenders), in their sole discretion, shall so direct, the Agent shall, by notice to the Borrower, rescind and annul such acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this ARTICLE VIII, the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or thereunder or waiving any Default hereunder or thereunder; PROVIDED, HOWEVER, that no such supplemental agreement shall, without the consent of each Lender:
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(a) Extend the Facility Termination Date, compromise or forgive the principal amount of any Loan, or reduce the rate of interest or compromise or forgive payment of interest on any Loan, or reduce the amount of any fee payable hereunder;
(b) Reduce the percentage specified in the definition of Required Lenders or Modified Required Lenders;
(c) Increase the amount of the Commitment of any Lender
hereunder;
(d) Amend this SECTION 8.2; or
(e) Permit any assignment by the Borrower of its Obligations or its rights hereunder.
PROVIDED, FURTHER, that no such supplemental agreement shall, without the consent of the Modified Required Lenders amend the definition of "Change of Control" or amend or waive SECTION 7.10.
No amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent. The Agent may waive payment of the fee required under SECTION 12.3.2 without obtaining the consent of any other party to this Agreement.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Loan notwithstanding the existence of a Default or the inability of the Borrower to satisfy the conditions precedent to such Loan shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to SECTION 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the Borrower contained in this Agreement or of the Borrower or any Subsidiary contained in any Loan Document shall survive the making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation.
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9.3. HEADINGS. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and understanding among the Borrower, the Agent and the Lenders and supersede all prior agreements and understandings among the Borrower, the Agent and the Lenders relating to the subject matter thereof other than the fee letter described in SECTION 10.13.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns; PROVIDED, HOWEVER, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of SECTIONS 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.
9.6. EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the Agent and the Arranger for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent or the Arranger, which attorneys may be employees of the Agent or the Arranger) paid or incurred by the Agent or the Arranger in connection with the preparation, negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment, modification, and administration of the Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger and the Lenders for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, the Arranger and the Lenders, which attorneys may be employees of the Agent, the Arranger or the Lenders) paid or incurred by the Agent, the Arranger or any Lender in connection with the collection of the Obligations or the enforcement of the Loan Documents. The Borrower further agrees to indemnify the Agent, the Arranger, each Lender, their respective affiliates, and each of their directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, the Arranger, any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby, or the direct or indirect application or proposed application of the proceeds of any Loan hereunder except to the extent that they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party seeking indemnification. The obligations of the Borrower under this SECTION 9.6 shall survive the termination of this Agreement.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders.
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9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between the Borrower on the one hand and the Lenders and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent, the Arranger nor any Lender shall have any fiduciary responsibilities to the Borrower. Neither the Agent, the Arranger nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower's business or operations. Neither the Agent, the Arranger nor any Lender shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by the Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.
9.11. CONFIDENTIALITY. Each Lender agrees to hold any confidential information which it may receive from the Borrower pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which such Lender is a party, (vi) to such Lender's direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, and (vii) permitted by Section 12.4.
9.12. DISCLOSURE. The Borrower and each Lender hereby acknowledge and agree that Bank One and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its Affiliates.
ARTICLE X
THE AGENT
10.1. APPOINTMENT. Bank One, NA is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the "Agent") hereunder and under each other Loan Document, and each of the Lenders irrevocably (subject to Section 10.12) authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this ARTICLE X. Notwithstanding the use of the defined term "Agent," it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan
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Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative, the Agent (i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of the Lenders within the meaning of Section 1-201 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder, except any action specifically provided by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in ARTICLE IV, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any collateral security; or (g) the financial condition of the Borrower or any guarantor of any of the Obligations or of any of the Borrower's or any such guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Borrower to the Agent at such time, but is voluntarily furnished by the Borrower to the Agent (either in its capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders or, if expressly required hereunder, the Modified Required Lenders or all the Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action
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permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders or, if expressly required hereunder, the Modified Required Lenders or all the Lenders. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro-rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Agent and the Lenders and all matters pertaining to the Agent's duties hereunder and under any other Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents, PROVIDED that (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required pursuant to SECTION 3.5(g) shall, notwithstanding the provisions of this SECTION 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under this SECTION 10.8 shall survive payment of the Obligations and termination of this Agreement.
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10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender, the Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitment and its Loans as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has, independently and without reliance upon the Agent, the Arranger or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Arranger or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, 45 days after the retiring Agent gives notice of its intention to resign. The Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders, such removal to be effective on the date specified by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders within thirty (30) days after the resigning Agent's giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of the Borrower and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of the Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Agent hereunder. If the Agent has resigned or been removed and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders; PROVIDED, such Lenders so performing such duties shall be deemed to be an Agent hereunder with full benefit of all provisions indemnifying the Agent hereunder. No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent
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shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of the Agent, the resigning or removed Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of an Agent, the provisions of this ARTICLE X shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. In the event that there is a successor to the Agent by merger, or the Agent assigns its duties and obligations to an Affiliate pursuant to this SECTION 10.12, then the term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Agent.
10.13. AGENT AND ARRANGER FEES. The Borrower agrees to pay to the Agent and the Arranger, for their respective accounts, the fees agreed to by the Borrower, the Agent and the Arranger pursuant to that certain letter agreement dated November 28, 2001, or as otherwise agreed from time to time.
10.14. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under ARTICLES IX and X.
10.15. SYNDICATION AGENTS; SENIOR MANAGING AGENTS; MANAGING AGENTS. None of the Lenders identified in this Agreement as the "Syndication Agents", "Senior Managing Agents" or "Managing Agents" shall have any right, power, obligation, liability, responsibility or duty under this Agreement in such identified capacity other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Agent in SECTION 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of the Lenders under applicable law, if the Borrower becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of the Borrower may be offset and applied toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has payment made to it upon its Loans (other than payments received pursuant to
SECTION 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly
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upon demand, to purchase a portion of the Loans held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of Loans. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their Loans. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. If an amount to be setoff is to be applied to Indebtedness of the Borrower to a Lender, other than Indebtedness comprised of Loans made by such Lender, such amount shall be applied ratably to such other Indebtedness and to the Indebtedness comprised of such Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lenders and their respective successors and assigns, except that (i) the Borrower shall not have the right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with SECTION 12.3. The parties to this Agreement acknowledge that clause (ii) of this SECTION 12.1 relates only to absolute assignments and does not prohibit assignments creating security interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee; PROVIDED, HOWEVER, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of SECTION 12.3. The Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with SECTION 12.3; PROVIDED, HOWEVER, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to
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the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Loans and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of SECTION 8.2 or of any other Loan Document.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each Participant which has been identified as such to the Borrower in writing shall be deemed to have the right of setoff provided in SECTION 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents; PROVIDED, that each Lender shall retain the right of setoff provided in SECTION 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in SECTION 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with SECTION 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more banks or other entities ("PURCHASERS") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of EXHIBIT C or in such other form as may be agreed to by the parties thereto. The consent of the Borrower and the Agent shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Lender, an Affiliate thereof or an Approved Fund; PROVIDED, HOWEVER, that if a Default has occurred and is continuing, the consent of the Borrower shall not be required. Such consent shall not be unreasonably withheld or delayed. Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate thereof shall (unless each of the Borrower and the Agent otherwise consents) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the remaining amount of the assigning Lender's Commitment (calculated as at the date of such assignment) or outstanding Loans (if the applicable Commitment has been terminated).
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of an assignment, together with any consents required by SECTION 12.3.1, and
(ii) payment of a $4,000 fee to
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the Agent for processing such assignment, such assignment shall become effective on the effective date specified in such assignment. The assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Loans under the applicable assignment agreement constitutes "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Lenders or the Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Commitment and Loans assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this SECTION 12.3.2, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any prospective Transferee any and all information in such Lender's possession concerning the creditworthiness of the Borrower and its Subsidiaries; PROVIDED that each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of SECTION 3.5(d).
ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by SECTION 2.14 with respect to borrowing notices, all notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Agent, at its address or facsimile number set forth on the signature pages hereof, (y) in the case of any Lender, at its address or facsimile number set forth below its signature hereto or (z) in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower in accordance with the provisions of this SECTION 13.1. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (ii) if given by mail, 72 hours after such communication is
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deposited in the mails with first class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section; PROVIDED that notices to the Agent under ARTICLE II shall not be effective until received.
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Agent and the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
-46-

15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[signature pages to follow]
-47-

IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed this Agreement as of the date first above written.
AON CORPORATION

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   Aon Center
                  200 East Randolph Drive
                  Chicago, Illinois  60601
                  Attn:  Diane Aigotti

       Telecopy:  (312) 381-6060
       Telephone: (312) 381-3230	

BANK ONE, NA,

individually and as Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   1 Bank One Plaza
                  Suite IL1-0085, 16th Floor
                  Chicago, Illinois 60670
                  Attn: Cindy Priest

       Telecopy:  (312) 732-4033
       Telephone: (312) 732-9565	

ABN AMRO BANK N.V.,
 individually and as Syndication Agent
By:
 Print Name:

Title:

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   135 S. LaSalle Street,
                  Suite 625
                  Chicago, IL 60674
                  Attn:  Andrew Haak

       Telecopy:  (312) 606-8425
       Telephone: (312) 904-2851	

CITIBANK, N.A.,	

individually and as Syndication Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   388 Greenwich Street
                  22nd Floor
                  New York, New York 10013
                  Attn:  Peter C. Bickford

       Telecopy:  (212) 816-4144
       Telephone: (212) 816-4022	

FIRST UNION NATIONAL BANK,
 individually and as Syndication Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   301 South College Street
                  DC-5,
                  NC0169
                  Charlotte, NC 28288-0169
                  Attn:  Lance P. Black

       Telecopy:  (704) 383-7611
       Telephone: (704) 374-6628	

JP MORGAN CHASE BANK,
 individually and as Senior Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   270 Park Avenue
                  15th Floor
                  New York, NY 10017
                  Attn: Helen Newcomb

       Telecopy:  (212) 270-0412
       Telephone: (212) 270-6260	

THE BANK OF NEW YORK,
 individually and as Senior Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   One Wall Street
                  17th Floor
                  New York, New York 10286
                  Attn: Evan Glass

       Telecopy:  (212) 809-9520
       Telephone: (212) 635-6466	

THE NORTHERN TRUST COMPANY,
 individually and as Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   50 S. LaSalle Street
                  Chicago, Illinois 60675
                  Attn:  Richard W. Berger

       Telecopy:  (312) 557-2673
       Telephone: (312) 444-5918	

BANK OF MONTREAL,	

individually and as Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   111 West Monroe Street
                  Suite 12 West
                  Chicago, Illinois 60603
                  Attn:  Randy J. Goodleaf

       Telecopy:  (312) 845-2196
       Telephone: (312) 845-2035	

FLEET NATIONAL BANK,
 individually and as Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   100 Federal Street
                  Mail Code: MA DE 10010H
                  Boston, MA 02110
                  Attn:  Eugene G. Ardito

       Telecopy:  (617) 434-1096
       Telephone: (617) 434-3311	

ROYAL BANK OF CANADA,
 individually and as Managing Agent

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   New York Branch
                  One Liberty Plaza
                  3rd Floor
                  New York, NY  10006-1404
                  Attn:   Manager, Loans
                  Administration

       Telecopy:  (416) 955-6720
       Telephone: (416) 955-6679	

with a copy to:

Address:   New York Branch
           One Liberty Plaza
           3rd Floor
           New York, NY  10006-1404
           Attn:   Alexander Birr

Telecopy:  (212) 428-6201
Telephone: (212) 428-6404	

THE BANK OF NOVA SCOTIA

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   181 W. Madison
                  Suite 3700
                  Chicago, IL 60602
                  Attn:  Lisa Garling

       Telecopy:  (312) 201-4108
       Telephone: (312) 201-4135	

WELLS FARGO BANK, N.A.
By:
 Print Name:

Title:

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   230 W. Monroe Street
                  Suite 2900
                  Chicago, IL 60606
                  Attn:  Robert C. Meyer

       Telecopy:  (312) 845-8606
       Telephone: (312) 345-8623	

FIRSTAR BANK, N.A.

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   777 East Wisconsin Avenue
                  Milwaukee, Wisconsin 53202
                  Attn:  James Spredemann

       Telecopy:  (414) 765-5367
       Telephone: (414) 765-6626	

THE FUJI BANK, LIMITED

By:
   ---------------------------------------
Print Name:
           -------------------------------
Title:
      ------------------------------------

       Address:   227 West Monroe Street
                  Suite 2600
                  Chicago, IL 60606
                  Attn:  Peter L. Chinnici

       Telecopy:  (312) 621-0539
       Telephone: (312) 621-0500	

STATE STREET BANK AND TRUST
COMPANY

    By:
       ---------------------------------------
    Print Name:
               -------------------------------
    Title:
          ------------------------------------

           Address:   2 Avenue de Lafayette
                      Mail Code: LCC2
                      Boston, MA 02111
                      Attn:  Lise Anne Boutiette

           Telecopy:  (617) 662-3778
           Telephone: (617) 662-3262	

PRICING SCHEDULE	

-------------------------------------------------------------------------------------------------------------------------------
                            LEVEL I          LEVEL II         LEVEL III        LEVEL IV         LEVEL V           LEVEL VI
                            STATUS            STATUS           STATUS           STATUS          STATUS             STATUS
-------------------------------------------------------------------------------------------------------------------------------
BORROWER DEBT               AA-/Aa3           A+/A1            A/A2             A-/A3          BBB+/Baa1    LESS THAN BBB+/Baa1
   RATING
-------------------------------------------------------------------------------------------------------------------------------
    Applicable               .07%             .08%             .09%              .11%            .125%              .15%
Facility Fee Rate
-------------------------------------------------------------------------------------------------------------------------------
   Applicable
     Margin
-------------------------------------------------------------------------------------------------------------------------------
Eurodollar Rate              .13%             .17%             .21%             .265%            .375%             .475%
-------------------------------------------------------------------------------------------------------------------------------
Alternate Base               0.0              0.0              0.0               0.0              0.0               0.0
Rate
-------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------
Applicable                   .10%             .10%             .10%             .125%            .125%             .125%
Utilization Fee
Rate* (GREATER THAN 33%)
===============================================================================================================================	

Subject to the following two sentences, a particular Level Status shall exist on a particular day if on such day the Borrower does not qualify for a Level Status with more advantageous pricing and either the Moody's Rating or the S&P Rating is at least equal to the corresponding rating specified for such Level Status in the table above. In the event of a difference in the equivalent "rating level" from S&P and Moody's resulting in a split of only one level, then the Level Status shall be determined by reference to the higher of the two Ratings. In the event of a difference in the equivalent "rating level" from S&P and Moody's resulting in a

* The Applicable Utilization Fee Rate shall be payable with respect to outstanding Advances on days when Utilization is greater than 33%. "Utilization" means, for any day, a percentage equal to the aggregate principal amount of Loans hereunder and "Loans" (as defined in the 364-Day Agreement) outstanding on such day (and at the close of business on such day if a Business Day) divided by the sum on such day of the Aggregate Commitment and the "Aggregate Commitment" under the 364-Day Agreement; PROVIDED that for purposes of computing the Utilization Fee (a) the Aggregate Commitment shall be deemed to in no event be less than the aggregate outstanding principal amount of the Loans, (b) the "Aggregate Commitment" (as defined in the 364-Day Agreement) shall be deemed to in no event be less than the aggregate outstanding principal amount of the "Loans" (as defined in the 364-Day Agreement) and (c) on and after the "Revolving Credit Termination Date" (as defined in the 364-Day Agreement), the "Aggregate Commitment" (as defined in the 364-Day Agreement) shall be deemed to be equal to the aggregate outstanding principal amount of the "Loans" (as defined in the 364-Day Agreement).

split of greater than one level, then the Level Status shall be that Level Status one below the Level Status determined by reference to the higher of the two Ratings. The above ratings are in the format of S&P Rating/Moody's Rating.
For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:
"Level Status" means either Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status.
"Moody's Rating" means, at any time, the Borrower Debt Rating issued by Moody's and then in effect.
"Rating" means Moody's Rating or S&P Rating.
"S&P Rating" means, at any time, the Borrower Debt Rating issued by S&P and then in effect.
The Applicable Margin and Applicable Facility Fee Rate shall be determined in accordance with the foregoing table based on the Borrower's Level Status as determined from its then-current Moody's and S&P Ratings. The Rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Borrower has no Moody's Rating or no S&P Rating or the Borrower does not qualify for a Level Status with more advantageous pricing, Level VI Status shall exist.
-2-

SCHEDULE 1
COMMITMENTS

             LENDER                                    COMMITMENT
             ------                                    ----------
Bank One, NA                                        $   50,000,000
ABN AMRO Bank N.V.                                      45,000,000
Citibank, N.A.                                          45,000,000
First Union National Bank                               45,000,000
JP Morgan Chase Bank                                    40,000,000
The Bank of New York                                    37,500,000
The Northern Trust Company                              30,000,000
Bank of Montreal                                        25,000,000
Fleet National Bank                                     25,000,000
Royal Bank of Canada                                    25,000,000
The Bank of Nova Scotia                                 17,500,000
Wells Fargo Bank, N.A.                                  15,000,000
Firstar Bank, N.A.                                      12,500,000
The Fuji Bank, Limited                                  12,500,000
State Street Bank and Trust Company                     12,500,000

TOTAL                                               $  437,500,000
                                                    ==============	

EXHIBIT A
NOTE
[$______________] [Date]
Aon Corporation, a Delaware corporation (the "Borrower"), promises to pay to the order of ____________________________________ (the "Lender") the lesser of the principal sum of ______________________ Dollars or the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the main office of Bank One, NA in Chicago, Illinois, as Agent, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay the principal of and accrued and unpaid interest on the Loans in full on the Facility Termination Date and shall make such mandatory payments as are required to be made under the terms of Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Three Year Credit Agreement dated as of February 8, 2002 (which, as it may be amended or modified and in effect from time to time, is herein called the "Agreement"), among the Borrower, the lenders party thereto, including the Lender, and Bank One, NA, as Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement.
AON CORPORATION
By:
 Print Name:

Title:

A-1

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF AON CORPORATION,
DATED ___________,

                             Principal                 Maturity                    Principal
                             Amount of                of Interest                   Amount               Unpaid
         Date                  Loan                     Period                       Paid                Balance
----------------------------------------------------------------------------------------------------------------	

EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Three Year Credit Agreement dated as of February 8, 2002 (as amended, modified, renewed or extended from time to time, the "Agreement") among the Borrower, the lenders party thereto and Bank One, NA, as Agent for the Lenders. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ____________________of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Unmatured Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ___ day of _______, 200_.
B-1

SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ______________, 200_ with Provisions of Section 6.17 of the Agreement
1. SECTION 6.17.1 - CONSOLIDATED NET WORTH
A. Consolidated Net Worth $___________
B. Must be greater than $2,500,000,000 (or, at all times from and after the CSC Spin-Off, $2,000,000,000)
Complies ________ Does Not Comply ___
2. SECTION 6.17.2 - CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE
A. Consolidated EBITDA
(for four fiscal quarters ended ___________, 200__)
(i) Consolidated Net Income $________
(ii) Consolidated Interest Expense $________
(iii) taxes $________
(iv) depreciation $________
(v) amortization $________
(vi) extraordinary losses $________
(vii) extraordinary gains $________
(viii) Sum of (i) through (vi) minus (vii) $________
B. Consolidated Interest Expense (for four fiscal quarters ended ___________, 200__) $________
C. Ratio of A to B ___ to 1.0
D. Permitted Ratio Greater than 4.0 to 1.0
Complies ____ Does Not Comply ___

EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between _________________________ (the "Assignor") and _____________________________ (the "Assignee") is dated as of ________________, 20__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement (which, as it may be amended, modified, renewed or extended from time to time is herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor's rights and obligations under the Credit Agreement and the other Loan Documents, such that after giving effect to such assignment the Assignee shall have purchased pursuant to this Assignment Agreement the percentage interest specified in Item 3 of Schedule 1 of all outstanding rights and obligations under the Credit Agreement and the other Loan Documents relating to the facilities listed in Item 3 of Schedule 1. The aggregate Commitment (or Loans, if the applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the "Effective Date") shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by the Agent) after this Assignment Agreement, together with any consents required under the Credit Agreement, are delivered to the Agent. In no event will the Effective Date occur if the payments required to be made by the Assignee to the Assignor on the Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the Assignor and the Assignee. On and after the Effective Date, the Assignee shall be entitled to receive from the Agent all payments of principal, interest and fees with respect to the interest assigned hereby. The Assignee will promptly remit to the Assignor any interest on Loans and fees received from the Agent which relate to the portion of the Commitment or Loans assigned to the Assignee hereunder for periods prior to the Effective Date and not previously paid by the Assignee to the Assignor. In the event that either party hereto receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto.
C-1

5. RECORDATION FEE. The Assignor and Assignee each agree to pay one-half of the recordation fee required to be paid to the Agent in connection with this Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S LIABILITY. The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder, (ii) such interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is duly authorized. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Loan Document, including without limitation, documents granting the Assignor and the other Lenders a security interest in assets of the Borrower or any guarantor, (ii) any representation, warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of the Borrower or any guarantor, (iv) the performance of or compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of the property, books or records of the Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Loans or (vii) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information at it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) confirms that the execution and delivery of this Assignment Agreement by the Assignee is duly authorized, (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, (vi) agrees that its payment instructions and notice instructions are as set forth in the attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are "plan assets" as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee's non-performance of the obligations assumed under this Assignment Agreement, and
-2-

(ix) if applicable, attaches the forms prescribed by the Internal Revenue Service of the United States certifying that the Assignee is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until notice of a change is delivered) shall be the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be executed in counterparts. Transmission by facsimile of an executed counterpart of this Assignment Agreement shall be deemed to constitute due and sufficient delivery of such counterpart and such facsimile shall be deemed to be an original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have executed this Assignment Agreement by executing Schedule 1 hereto as of the date first above written.
-3-

SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Three Year Credit Agreement dated as of February 8, 2002 among Aon Corporation, Bank One, NA, as agent, and the lenders party thereto.
2. Date of Assignment Agreement: _____________, 200__
3. Amounts (As of Date of Item 2 above):

                                                      Facility
                                                         1*
                                                      --------
     a.      Assignee's percentage
             of each Facility purchased
             under the Assignment
             Agreement                                  ____ %

     b.      Amount of
             each Facility
             purchased
             under the Assignment
             Agreement                                  $_____

4.   Assignee's Commitment (or Loans
     with respect to terminated
     Commitments) purchased
     hereunder:                                               $ ___________

5.   Proposed Effective Date:                                 ________________

6.   Non-standard Recordation Fee
     Arrangement (if applicable)

Accepted and Agreed:

[NAME OF ASSIGNOR]                         [NAME OF ASSIGNEE]

By:                                        By:
   ---------------------------------           ---------------------------------
Title:                                     Title:
      ------------------------------              ------------------------------

                                       -1-	

CONSENTED TO BY                            CONSENTED TO BY
AON CORPORATION                            BANK ONE, NA

By:                                        By:
   ---------------------------------           ---------------------------------
Title:                                     Title:
      ------------------------------              ------------------------------	

* Insert specific facility names per Credit Agreement ** Percentage taken to 10 decimal places *** If fee is split 50-50, pick N/A as option **** Delete if not required by Credit Agreement
-2-

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must include notice addresses for the Assignor and the Assignee

(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:

Name:                                  Telephone No.:
     -----------------------------                   ---------------------------
Fax No.:                               Telex No.:
        --------------------------               -------------------------------	

Answerback:
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

ADDRESS FOR NOTICES FOR ASSIGNOR:

ASSIGNEE INFORMATION
CREDIT CONTACT:

Name:                                  Telephone No.:
     -----------------------------                   ---------------------------
Fax No.:                               Telex No.:
        --------------------------               -------------------------------	

Answerback:
KEY OPERATIONS CONTACTS:

Booking Installation:                  Booking Installation:
                     -------------                          --------------------
Name:                                  Name:
     -----------------------------          ------------------------------------
Telephone No.:                         Telephone No.:
              --------------------                   ---------------------------
Fax No.:                               Fax No.:
        --------------------------             ---------------------------------
Telex No.:                             Telex No.:
          ------------------------               -------------------------------
Answerback:                            Answerback:
           -----------------------                ------------------------------	

-1-

PAYMENT INFORMATION:
Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

ADDRESS FOR NOTICES FOR ASSIGNEE:

BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.

INITIAL FUNDING CONTACT:               SUBSEQUENT OPERATIONS CONTACT:

Name:                                  Name:
     -----------------------                ------------------------------------
Telephone No.: (312)                   Telephone No.: (312)
              --------------                         ---------------------------
Fax No.: (312)                         Fax No.: (312)
        --------------------                    --------------------------------
                            Bank One Telex No.:  190201  (Answerback: FNBC UT)
                                                --------------------------------	

INITIAL FUNDING STANDARDS:
Libor - Fund 2 days after rates are set.

BANK ONE WIRE INSTRUCTIONS:        Bank One, NA, ABA # 071000013
                                   LS2 Incoming Account # 481152860000
                                   Ref:________________

ADDRESS FOR NOTICES FOR BANK ONE:  1 Bank One Plaza, Chicago, IL  60670
                                   Attn: Agency Compliance Division,
                                         Suite IL1-0353
                                   Fax No. (312) 732-2038 or (312) 732-4339	

-2-

EXHIBIT 10(y)
EXECUTION COPY

$437,500,000 
364-DAY CREDIT AGREEMENT
AMONG
AON CORPORATION,
AS BORROWER,
THE LENDERS,
BANK ONE, NA,
AS AGENT,
AND
CITIBANK, N.A.,
ABN AMRO BANK N.V.
AND
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENTS
DATED AS OF
FEBRUARY 8, 2002

BANC ONE CAPITAL MARKETS, INC.
SOLE LEAD ARRANGER AND SOLE BOOK MANAGER

TABLE OF CONTENTS

ARTICLE I DEFINITIONS.......................................................................................1
ARTICLE II THE CREDITS.....................................................................................12
2.1.    Commitment.........................................................................................12
2.2.    Required Payments; Termination.....................................................................12
2.3.    Ratable Loans......................................................................................12
2.4.    Types of Advances..................................................................................13
2.5.    Facility Fee; Utilization Fee; Reductions and Increases in Aggregate Commitment....................13
2.6.    Minimum Amount of Each Advance.....................................................................14
2.7.    Optional Principal Payments........................................................................14
2.8.    Method of Selecting Types and Interest Periods for New Advances....................................14
2.9.    Conversion and Continuation of Outstanding Advances................................................15
2.10.   Changes in Interest Rate, etc......................................................................15
2.11.   Rates Applicable After Default.....................................................................16
2.12.   Method of Payment..................................................................................16
2.13.   Noteless Agreement; Evidence of Indebtedness.......................................................16
2.14.   Telephonic Notices.................................................................................17
2.15.   Interest Payment Dates; Interest and Fee Basis.....................................................17
2.16.   Notification of Advances, Interest Rates, Prepayments and Commitment Reductions....................18
2.17.   Lending Installations..............................................................................18
2.18.   Non-Receipt of Funds by the Agent..................................................................18
2.19.   Extension of Revolving Credit Termination Date and Facility Termination Date.......................18
2.20.   Replacement of Lender..............................................................................19
ARTICLE III YIELD PROTECTION; TAXES........................................................................19
3.1.    Yield Protection...................................................................................19
3.2.    Changes in Capital Adequacy Regulations............................................................20
3.3.    Availability of Types of Advances..................................................................21
3.4.    Funding Indemnification............................................................................21
3.5.    Taxes..............................................................................................21
3.6.    Lender Statements; Survival of Indemnity...........................................................23
ARTICLE IV CONDITIONS PRECEDENT............................................................................23
4.1.    Effectiveness......................................................................................23
4.2.    Each Advance.......................................................................................25
ARTICLE V REPRESENTATIONS AND WARRANTIES...................................................................25
5.1.    Corporate Existence and Standing...................................................................25
5.2.    Authorization and Validity.........................................................................25
5.3.    Compliance with Laws and Contracts.................................................................25
5.4.    Governmental Consents..............................................................................26
5.5.    Financial Statements...............................................................................26
5.6.    Material Adverse Change............................................................................26
5.7.    Taxes..............................................................................................26
5.8.    Litigation and Contingent Obligations..............................................................27	

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5.9.    ERISA..............................................................................................27
5.10.   Defaults...........................................................................................27
5.11.   Regulation U.......................................................................................27
5.12.   Investment Company; Public Utility Holding Company.................................................28
5.13.   Ownership of Properties............................................................................28
5.14.   Material Agreements................................................................................28
5.15.   Environmental Laws.................................................................................28
5.16.   Insurance..........................................................................................29
5.17.   Insurance Licenses.................................................................................29
5.18.   Solvency...........................................................................................29
5.19.   Disclosure.........................................................................................29
ARTICLE VI COVENANTS.......................................................................................30
6.1.    Financial Reporting................................................................................30
6.2.    Use of Proceeds....................................................................................31
6.3.    Notice of Default..................................................................................31
6.4.    Conduct of Business................................................................................31
6.5.    Taxes..............................................................................................31
6.6.    Insurance..........................................................................................32
6.7.    Compliance with Laws...............................................................................32
6.8.    Maintenance of Properties..........................................................................32
6.9.    Inspection.........................................................................................32
6.10.   Capital Stock and Dividends........................................................................32
6.11.   Merger.............................................................................................32
6.12.   Liens..............................................................................................33
6.13.   Affiliates.........................................................................................34
6.14.   Change in Fiscal Year..............................................................................34
6.15.   Inconsistent Agreements............................................................................34
6.16.   Sale of Assets.....................................................................................34
6.17.   Financial Covenants................................................................................34
6.18.   ERISA..............................................................................................35
ARTICLE VII DEFAULTS.......................................................................................35
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES................................................37
8.1.    Acceleration.......................................................................................37
8.2.    Amendments.........................................................................................37
8.3.    Preservation of Rights.............................................................................38
ARTICLE IX GENERAL PROVISIONS..............................................................................38
9.1.    Survival of Representations........................................................................38
9.2.    Governmental Regulation............................................................................38
9.3.    Headings...........................................................................................38
9.4.    Entire Agreement...................................................................................38
9.5.    Several Obligations; Benefits of this Agreement....................................................39
9.6.    Expenses; Indemnification..........................................................................39
9.7.    Numbers of Documents...............................................................................39
9.8.    Accounting.........................................................................................39	

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9.9.    Severability of Provisions.........................................................................39
9.10.   Nonliability of Lenders............................................................................40
9.11.   Confidentiality....................................................................................40
9.12.   Disclosure.........................................................................................40
ARTICLE X THE AGENT........................................................................................40
10.1.   Appointment........................................................................................40
10.2.   Powers.............................................................................................41
10.3.   General Immunity...................................................................................41
10.4.   No Responsibility for Loans, Recitals, etc.........................................................41
10.5.   Action on Instructions of Lenders..................................................................41
10.6.   Employment of Agents and Counsel...................................................................42
10.7.   Reliance on Documents; Counsel.....................................................................42
10.8.   Agent's Reimbursement and Indemnification..........................................................42
10.9.   Notice of Default..................................................................................42
10.10.  Rights as a Lender.................................................................................42
10.11.  Lender Credit Decision.............................................................................43
10.12.  Successor Agent....................................................................................43
10.13.  Agent and Arranger Fees............................................................................44
10.14.  Delegation to Affiliates...........................................................................44
10.15.  Syndication Agents; Senior Managing Agents; Managing Agents........................................44
ARTICLE XI SETOFF; RATABLE PAYMENTS........................................................................44
11.1.   Setoff.............................................................................................44
11.2.   Ratable Payments...................................................................................44
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..............................................45
12.1.   Successors and Assigns.............................................................................45
12.2.   Participations.....................................................................................45
12.3.   Assignments........................................................................................46
12.4.   Dissemination of Information.......................................................................47
12.5.   Tax Treatment......................................................................................47
ARTICLE XIII NOTICES.......................................................................................47
13.1.   Giving Notice......................................................................................47
13.2.   Change of Address..................................................................................47
ARTICLE XIV COUNTERPARTS...................................................................................48
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................................48
15.1.   CHOICE OF LAW......................................................................................48
15.2.   CONSENT TO JURISDICTION............................................................................48
15.3.   WAIVER OF JURY TRIAL...............................................................................48	

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EXHIBITS

Exhibit A           Note
Exhibit B           Compliance Certificate
Exhibit C           Assignment Agreement
Exhibit D           Commitment Addition Agreement

                                    SCHEDULES

Pricing Schedule
Schedule 1          Commitments	

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364-DAY CREDIT AGREEMENT
This 364-Day Credit Agreement, dated as of February 8, 2002, is among Aon Corporation, a Delaware corporation, the Lenders and Bank One, NA, a national banking association having its principal office in Chicago, Illinois, as Agent.
R E C I T A L S:
A. The Borrower has requested the Lenders to make financial accommodations to it in the aggregate principal amount of $437,500,000; and
B. The Lenders are willing to extend such financial accommodations on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance" means a borrowing of Loans, (a) advanced by the Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of the Lenders pursuant to ARTICLE X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to ARTICLE X.
"Aggregate Commitment" means the aggregate of the Commitments of all the Lenders, as reduced or increased from time to time pursuant to the terms hereof. The initial Aggregate Commitment is $437,500,000.

"Agreement" means this 364-Day Credit Agreement, as it may be amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with those used in preparing the financial statements referred to in SECTION 5.5.
"Alternate Base Rate" means, for any day, a rate of interest per annum equal to the higher of (a) the Prime Rate for such day, and (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Advance" means an Advance which, except as otherwise provided in SECTION 2.11, bears interest at the Alternate Base Rate.
"Alternate Base Rate Loan" means a Loan which, except as otherwise provided in SECTION 2.11, bears interest at the Alternate Base Rate.
"Applicable Facility Fee Rate" means, at any time, the percentage determined in accordance with the Pricing Schedule at such time. The Applicable Facility Fee Rate shall change as and when the Borrower Debt Rating changes. The initial Applicable Facility Fee Rate shall be .07%.
"Applicable Margin" means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.
"Applicable Utilization Fee Rate" means, at any time, the percentage determined in accordance with the Pricing Schedule at such time. The Applicable Utilization Fee Rate shall change as and when the Borrower Debt Rating changes.
"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as "Sole Lead Arranger" and "Sole Book Manager".
"Article" means an article of this Agreement unless another document is specifically referenced.
"Authorized Officer" means any of the president, chief financial officer, treasurer or vice-president and controller of the Borrower, acting singly.
"Bank One" means Bank One, NA, a national banking association having its principal office in Chicago, Illinois, in its individual capacity, and its successors.
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"Borrower" means Aon Corporation, a Delaware corporation, and its successors and assigns.
"Borrower Debt Rating" means the senior unsecured long term debt (without third party credit enhancement) rating of the Borrower as determined by a rating agency identified on the Pricing Schedule.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in SECTION 2.8.
"Business Day" means (a) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in United States dollars are carried on in the London interbank market and (b) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
"Change" is defined in SECTION 3.2.
"Change in Control" means (a) the acquisition by any Person, or two or more Persons acting in concert, including without limitation any acquisition effected by means of any transaction contemplated by SECTION 6.11, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock of the Borrower, or (b) during any period of 25 consecutive calendar months, commencing on the date of this Agreement, the ceasing of those individuals (the "CONTINUING DIRECTORS") who (i) were directors of the Borrower on the first day of each such period or (ii) subsequently became directors of the Borrower and whose initial election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of the Borrower, to constitute a majority of the board of directors of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
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"Commitment" means, for each Lender, the obligation of such Lender to make Loans not exceeding the amount set forth opposite its name on SCHEDULE 1 hereto, as it may be modified as a result of any assignment that has become effective pursuant to SECTION 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof.
"Condemnation" is defined in SECTION 7.8.
"Consolidated" or "consolidated", when used in connection with any calculation, means a calculation to be determined on a consolidated basis for the Borrower and its Subsidiaries in accordance with Agreement Accounting Principles.
"Consolidated EBITDA" means Consolidated Net Income PLUS, to the extent deducted from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary losses incurred other than in the ordinary course of business, MINUS, to the extent included in Consolidated Net Income, extraordinary gains realized other than in the ordinary course of business, all calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period, the interest expense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Net Worth" means, at any date of determination, the consolidated common stockholders' equity of the Borrower and its consolidated Subsidiaries determined in accordance with Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of reference, each Person which is a member of the affiliated group of the Borrower if Consolidated returns are or shall be filed for such affiliated group for federal income tax purposes or any combined or unitary group of which the Borrower is a member for state income tax purposes.
"Contingent Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement or take-or-pay contract or application for a Letter of Credit.
"Controlled Group" means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
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"Conversion/Continuation Notice" is defined in SECTION 2.9.
"CSC" means Combined Specialty Corporation, a Wholly-Owned Subsidiary of the Borrower, that will, immediately prior to the CSC Spin-Off, hold only the general insurance underwriting business of the Borrower.
"CSC Distribution Agreement" means the distribution agreement to be filed with the U.S. Securities and Exchange Commission and entered into between the Borrower and CSC to effect the CSC Spin-Off in material conformity with the description of the CSC Spin-Off and pro-forma financial information relating to the CSC Spin-Off which was included in the Form 8-K filed with the U.S. Securities and Exchange Commission on December 3, 2001 by the Borrower under the Securities Act of 1934.
"CSC Group" means CSC and each of CSC's Subsidiaries.
"CSC Spin-Off" means the distribution, as a tax-free dividend by the Borrower to the current holders of the Borrower's common stock, of the outstanding shares of common stock of CSC to be effected pursuant to the terms of the CSC Distribution Agreement, together with the related transactions expressly contemplated by the terms of the CSC Distribution Agreement.
"Default" means an event described in ARTICLE VII.
"Environmental Laws" is defined in SECTION 5.15.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided in SECTION 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance: (a) for any one, two, three or six month Interest Period applicable to such Eurodollar Advance, the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, PROVIDED that, (i) if Reuters Screen FRBD is not available to the Agent for any reason, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, and (ii) if no such British Bankers' Association Interest Settlement Rate is available to the Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
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first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period; or
(b) for any fourteen (14) day Interest Period applicable to such Eurodollar Advance, the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars with first-class banks in the interbank market at approximately 10:00 a.m. (Chicago time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
SECTION 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin for Eurodollar Advances.
"Excluded Taxes" means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (ii) the jurisdiction in which the Agent's or such Lender's principal executive office or such Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document is specifically referenced.
"Existing Credit Agreements" means that certain $600,000,000 364-Day Amended and Restated Credit Agreement dated as of October 8, 1998 among the Borrower, Bank One, as agent, and the lenders named therein, and that certain $600,000,000 Five Year Credit Agreement dated as of January 14, 1997 among the Borrower, Bank One, as agent, and the lenders named therein, in each case as amended, restated, supplemented or otherwise modified from time to time.
"Facility Termination Date" means February 7, 2004, as such date may be extended from time to time pursuant to SECTION 2.19, or any earlier date (a) on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof (other than pursuant to the third sentence of
SECTION 2.1) or (b) on or after the Revolving Credit Termination Date, on which the Revolving Credit Termination Balance and all other unpaid Obligations shall be paid in full.
"Federal Funds Effective Rate" means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such
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day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion.
"Financial Statements" is defined in SECTION 5.5.
"Fiscal Quarter" means each of the four three-month accounting periods comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December 31 of each year.
"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
"Governmental Authority" means any government (foreign or domestic) or any state or other political subdivision thereof or any governmental body, agency, authority, department or commission (including without limitation any taxing authority or political subdivision) or any instrumentality or officer thereof (including, without limitation, any court or tribunal and any board of insurance, insurance department or insurance commissioner) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned or controlled by or subject to the control of any of the foregoing.
"Hazardous Materials" is defined in SECTION 5.15.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed money, (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations which are evidenced by notes, acceptances, or similar instruments,
(e) Capitalized Lease Obligations, (f) Contingent Obligations, (g) obligations for which such Person is obligated pursuant to or in respect of a Letter of Credit and (h) repurchase obligations or liabilities of such Person with respect to accounts or notes receivable sold by such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a period of fourteen (14) days or one, two, three or six months commencing on a Business Day selected by the Borrower pursuant to this Agreement. An Interest Period of one, two, three or six months shall end on (but exclude) the day which corresponds numerically to such date one, two, three or six months thereafter; PROVIDED, HOWEVER, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding
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Business Day; PROVIDED, HOWEVER, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.
"Lenders" means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender or the Agent pursuant to SECTION 2.17.
"Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.
"Lien" means any security interest, lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to ARTICLE II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, any Notes issued pursuant to
SECTION 2.13 and the other documents and agreements contemplated hereby and executed by the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the business, Property, condition (financial or otherwise), performance, results of operations, or prospects of the Post-Spin-Off Group taken as a whole or, if the Borrower has confirmed or it has notified the holders of the Borrower's common stock or the US Securities and Exchange Commission that the CSC Spin-Off is not to take place, the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations under the Loan Documents, or
(c) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Modified Required Lenders" means Lenders in the aggregate having at least 66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid principal amount of the outstanding Loans.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
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"Multiemployer Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions.
"Non-U.S. Lender" is defined in SECTION 3.5(d).
"Note" is defined in SECTION 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrower to the Lenders or to any Lender, the Agent or any indemnified party arising under the Loan Documents.
"Other Taxes" is defined in SECTION 3.5(b).
"Participants" is defined in SECTION 12.2.1.
"Payment Date" means the last day of each March, June, September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"Person" means any natural person, corporation, firm, joint venture, partnership, association, enterprise, limited liability company, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as defined in Section 3(2) of ERISA, as to which the Borrower or any member of the Controlled Group may have any liability.
"Post-Spin-Off Group" means the Borrower and each of its Subsidiaries but excluding any member of the CSC Group.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.
"Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
"pro-rata" means, when used with respect to a Lender, and any described aggregate or total amount, an amount equal to such Lender's pro-rata share or portion based on its percentage of the Aggregate Commitment or if the Aggregate Commitment has been terminated, its percentage of the aggregate principal amount of outstanding Advances.
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"Purchasers" is defined in SECTION 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to depositary institutions.
"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks and certain other Persons for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System and certain other Persons.
"Release" is defined in the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. 39601 ET SEQ.
"Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event; PROVIDED, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 51% of the aggregate unpaid principal amount of the outstanding Loans.
"Reserve Requirement" means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.
"Revolving Credit Termination Balance" means the aggregate principal amount of Advances outstanding on the Revolving Credit Termination Date after giving effect to any Advances made or repaid on such date.
"Revolving Credit Termination Date" means February 7, 2003 or any later date as may be specified as the Revolving Credit Termination Date in accordance with SECTION 2.19 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.
"Risk-Based Capital Guidelines" is defined in SECTION 3.2.
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"S&P" means Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto.
"Schedule" refers to a specific schedule to this Agreement, unless another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group.
"Subsidiary" of a Person means (a) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower and its Subsidiaries, Property which (a) represents more than 10% of the consolidated assets of the Borrower and its Subsidiaries, as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries as at the end of the quarter next preceding the date on which such determination is made, or (b) is responsible for more than 10% of the consolidated net sales or of the consolidated net income of the Borrower and its Subsidiaries for the 12-month period ending as of the end of the quarter next preceding the date of determination.
"Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but EXCLUDING Excluded Taxes and Other Taxes.
"Termination Event" means, with respect to a Plan which is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any other member of the Controlled Group from such Plan during a plan year in which the Borrower or any other member of the Controlled Group was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a notice of intent to terminate such Plan or the treatment of an amendment of such Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Plan or (e) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Plan.
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"Three Year Agreement" means that certain Three Year Credit Agreement dated as of the date hereof among the Borrower, Bank One, as agent, and the lenders party thereto, as from time to time amended, restated or otherwise modified.
"Total Plan Liability" means, at any time, the present value of all vested and unvested accrued benefits under all Single Employer Plans, determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
"Transferee" is defined in SECTION 12.4.
"Transitional Services" means the services to be provided by the Post-Spin-Off Group to the CSC Group, including but not limited to human resource administration services, IT and telecommunications support and services, payroll, salary and employee benefits services, tax, audit and accounting services, legal services, treasury services (cash investment, foreign exchange, derivatives and hedging), intellectual property licensing, premium financing services, claims administration services and benefits/brokerage consultancy and risk management services.
"Type" means, with respect to any Advance, its nature as an Alternate Base Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person, or (b) any partnership, association, joint venture, limited liability company or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise provided, all references herein to a "Wholly-Owned Subsidiary" shall mean a Wholly-Owned Subsidiary of the Borrower.
The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
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2.1. COMMITMENT. From and including the date of this Agreement to the Revolving Credit Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Loans to the Borrower from time to time in amounts not to exceed in the aggregate at any one time outstanding the amount of its Commitment. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Revolving Credit Termination Date. The Commitments to lend hereunder shall expire on the Revolving Credit Termination Date. Principal payments made after the Revolving Credit Termination Date may not be reborrowed.
2.2. REQUIRED PAYMENTS; TERMINATION. The Revolving Credit Termination Balance and all other unpaid Obligations shall be paid in full by the Borrower on the Revolving Credit Termination Date; PROVIDED, HOWEVER, that upon the written request of the Borrower, delivered to the Agent at least ten (10) Business Days prior to the Revolving Credit Termination Date, the Revolving Credit Termination Balance shall be due and payable on the Facility Termination Date.
2.3. RATABLE LOANS. Each Advance hereunder shall consist of Loans made from the several Lenders ratably in proportion to the ratio that their respective Commitments bear to the Aggregate Commitment.
2.4. TYPES OF ADVANCES. The Advances may be Alternate Base Rate Advances or Eurodollar Advances, or a combination thereof, selected by the Borrower in accordance with SECTIONS 2.8 and 2.9.
2.5. FACILITY FEE; UTILIZATION FEE; REDUCTIONS AND INCREASES IN AGGREGATE COMMITMENT. (a) The Borrower agrees to pay to the Agent for the account of each Lender a facility fee at a per annum rate equal to the Applicable Facility Fee Rate on such Lender's Commitment (or, after the Revolving Credit Termination Date, on the principal amount of such Lender's Loans) from the date hereof to and including the Facility Termination Date, payable on each Payment Date hereafter and on the Facility Termination Date. The Borrower also agrees to pay to the Agent for the ratable (based on Commitment (or after termination of the Commitments, outstanding Loan) amounts) account of the Lenders a utilization fee for each day from the date hereof to and including the later of the Facility Termination Date and the date all Loans are paid in full and all Commitments are terminated, such utilization fee to be equal to the Applicable Utilization Fee Rate for such day multiplied by the outstanding principal amount of the Loans on such day, payable on each Payment Date and on the Facility Termination Date. The Borrower may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in a minimum aggregate amount of $25,000,000 or any integral multiple of $5,000,000 in excess thereof, upon at least two (2) Business Days' written notice to the Agent, which notice shall specify the amount of any such reduction, PROVIDED, HOWEVER, that the amount of the Aggregate Commitment may not be reduced below the aggregate principal amount of the outstanding Advances. All accrued facility and utilization fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Loans hereunder.
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(b) Prior to the Revolving Credit Termination Date, the Borrower may, at its option, on up to two occasions, seek to increase the Aggregate Commitment by a minimum amount of $10,000,000 and up to an aggregate amount of $62,500,000 (resulting in a maximum Aggregate Commitment of $500,000,000) upon at least three (3) Business Days' prior written notice to the Agent, which notice shall specify the amount of any such increase and shall certify (i) that no Default or Unmatured Default has occurred and is continuing and (ii) that each of the representations and warranties set forth in ARTICLE V of this Agreement is true and correct on and as of such date (except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date). The Borrower may, after giving such notice, offer the increase (which may be declined by any Lender in its sole discretion) in the Aggregate Commitment on either a ratable basis to the Lenders or on a non pro-rata basis to one or more Lenders and/or to other Lenders or entities reasonably acceptable to the Agent; PROVIDED that (x) the minimum amount of any increase for any new Lender shall be $10,000,000 and (y) after giving effect to any increase, no Lender's Commitment shall be greater than 25% of the Aggregate Commitment. No increase in the Aggregate Commitment shall become effective until the existing or new Lenders extending such incremental Commitment amount and the Borrower shall have delivered to the Agent a Commitment Addition Agreement substantially in the form of EXHIBIT D (or in such other form as may be reasonably satisfactory to the Agent) pursuant to which any such existing Lender states the amount of its Commitment increase, any such new Lender states its Commitment amount and agrees to assume and accept the obligations and rights of a Lender hereunder and the Borrower accepts such incremental Commitments. The Lenders (new or existing) shall accept an assignment from the existing Lenders, and the existing Lenders shall make an assignment to the new or existing Lender accepting a new or increased Commitment, of an interest in each then outstanding Advance such that, after giving effect thereto, all Advances are held ratably by the Lenders in proportion to their respective Commitments. Assignments pursuant to the preceding sentence shall be made in exchange for the principal amount assigned plus accrued and unpaid interest, facility fees and utilization fees. The Borrower shall make any payments under SECTION 3.4 resulting from such assignments. Any such increase of the Aggregate Commitment shall be subject to receipt by the Agent from the Borrower of such supplemental opinions, resolutions, certificates and other documents as the Agent may reasonably request.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be in the minimum amount of $25,000,000 (and in multiples of $5,000,000 if in excess thereof); PROVIDED, HOWEVER, that (a) any Alternate Base Rate Advance may be in the amount of the unused Aggregate Commitment and (b) in no event shall more than six (6) Eurodollar Advances be permitted to be outstanding at any time.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay, without penalty or premium, all outstanding Alternate Base Rate Advances, or, in a minimum aggregate amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion of the outstanding Alternate Base Rate Advances upon notice to the Agent by 10:00 a.m. on the Business Day of the proposed prepayment. The Borrower may from time to time pay, subject to
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the payment of any funding indemnification amounts required by SECTION 3.4 but without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion of an outstanding Eurodollar Advance, upon two
(2) Business Days' prior notice to the Agent.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto from time to time; PROVIDED, HOWEVER, that in the event Loans are incurred on the date of this Agreement, all Loans incurred on such date shall be Alternate Base Rate Advances. The Borrower shall give the Agent irrevocable notice (a "BORROWING NOTICE") not later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Alternate Base Rate Advance and at least three (3) Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date of such Advance, which shall be a Business Day;
(b) the aggregate amount of such Advance;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Advance, the Interest Period applicable thereto, which shall end on or prior to the Facility Termination Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall make available its Loan or Loans, in funds immediately available in Chicago, to the Agent at its address specified pursuant to ARTICLE XIII. The Agent will make the funds so received from the Lenders available to the Borrower at the Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Each Alternate Base Rate Advance shall continue as an Alternate Base Rate Advance unless and until such Alternate Base Rate Advance is converted into a Eurodollar Advance pursuant to this SECTION 2.9 or is repaid in accordance with SECTION 2.7. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into an Alternate Base Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with SECTION 2.7 or (y) the Borrower shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of SECTION 2.6, the Borrower may elect from time to time to convert all or any part of an Alternate Base Rate Advance into a Eurodollar Advance. The Borrower shall give the Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of an Alternate Base Rate Advance into a Eurodollar Advance or of continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time) on the date of a conversion into an Alternate Base Rate Advance, or at least three (3) Business Days, in the case of a conversion into or continuation of a Eurodollar Advance, prior to the date of the requested conversion or continuation, specifying:
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(a) the requested date of such conversion or continuation, which shall be a Business Day;
(b) the aggregate amount and Type of the Advance which is to be converted or continued; and
(c) the amount and Type(s) of Advance(s) into which such Advance is to be converted or continued and, in the case of a conversion into or continuation of a Eurodollar Advance, the duration of the Interest Period applicable thereto, which shall end on or prior to the Facility Termination Date.
2.10. CHANGES IN INTEREST RATE, ETC. Each Alternate Base Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is converted from a Eurodollar Advance into an Alternate Base Rate Advance pursuant to SECTION 2.9, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to SECTION 2.9 hereof, at a rate per annum equal to the Alternate Base Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as an Alternate Base Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the Eurodollar Rate determined by the Agent as applicable to such Eurodollar Advance based upon the Borrower's selections under SECTIONS 2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest Period may end after the Facility Termination Date. The Borrower shall select Interest Periods so that it is not necessary to repay any portion of a Eurodollar Advance prior to the last day of the applicable Interest Period in order to make a mandatory repayment required pursuant to SECTION 2.2.
2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the contrary contained in SECTION 2.8 or 2.9, no Advance may be made as, converted into or continued as a Eurodollar Advance (except with the consent of the Agent and the Required Lenders) when any Default or Unmatured Default has occurred and is continuing. During the continuance of a Default the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of SECTION 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that (a) each Eurodollar Advance shall bear interest for the remainder of the applicable Interest Period at the Eurodollar Rate otherwise applicable to such Interest Period plus 1% per annum and (b) each Alternate Base Rate Advance shall bear interest at a rate per annum equal to the Alternate Base Rate in effect from time to time plus 1% per annum, PROVIDED that, during the continuance of a Default under SECTION 7.6 or 7.7, the interest rates set forth in clauses (a) and (b) above shall be applicable to all Advances without any election or action on the part of the Agent or any Lender.
2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be made, without setoff, deduction or counterclaim, in immediately available funds to the Agent at the Agent's address specified pursuant to ARTICLE XIII, or at any other Lending Installation of the Agent specified in writing by the Agent to the Borrower, by noon (Chicago time) on the date
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when due and shall be applied ratably by the Agent among the Lenders. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified pursuant to ARTICLE XIII or at any Lending Installation specified in a notice received by the Agent from such Lender. The Agent is hereby authorized to charge the account of the Borrower maintained with Bank One for each payment of principal, interest and fees as it becomes due hereunder.
2.13. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to PARAGRAPHS (a) and (b) above shall be PRIMA FACIE evidence of the existence and amounts of the Obligations therein recorded; PROVIDED, HOWEVER, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.
(d) Any Lender may request that its Loans be evidenced by a promissory note in substantially the form of EXHIBIT A (including any amendment, modification, renewal or replacement thereof, a "NOTE"). In such event, the Borrower shall prepare, execute and deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after any assignment pursuant to SECTION 12.3) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to
SECTION 12.3, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in PARAGRAPHS (a) and (b) above. Upon receipt of an affidavit of an officer of any Lender as to the loss, theft, destruction or mutilation of such Lender's Note, and, in the case of any such loss, theft destruction or mutilation, upon cancellation of such Note, the Borrower will issue, in lieu thereof, a replacement Note in the same principal amount thereof and otherwise of like tenor.
2.14. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders and the Agent to extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be acting on behalf of the Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation
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Notices to be given telephonically. The Borrower agrees to deliver promptly to the Agent a written confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error.
2.15. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued on each Alternate Base Rate Advance shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which an Alternate Base Rate Advance is prepaid, whether due to acceleration or otherwise, and at maturity. Interest accrued on that portion of the outstanding principal amount of any Alternate Base Rate Advance converted into a Eurodollar Advance on a day other than a Payment Date shall be payable on the date of conversion. Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having an Interest Period longer than three (3) months shall also be payable on the last day of each three-month interval during such Interest Period. Interest with respect to Eurodollar Loans, facility fees and utilization fees shall be calculated for actual days elapsed on the basis of a 360-day year. Interest with respect to Alternate Base Rate Loans shall be calculated for the actual days elapsed on the basis of a 365 or 366-day year, as applicable. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is made in full and received prior to noon (Chicago time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment.
2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. The Agent will notify each Lender of the Eurodollar Rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate.
2.17. LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending Installation selected by such Lender and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation and the Loans and any Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending Installation. Each Lender may, by written notice to the Agent and the Borrower in accordance with ARTICLE XIII, designate replacement or additional Lending Installations through which Loans will be made by it and for whose account Loan payments are to be made.
2.18. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan, or (b) in the case of the Borrower, a
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payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three (3) days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. EXTENSION OF REVOLVING CREDIT TERMINATION DATE AND FACILITY TERMINATION DATE. The Borrower may request an extension of the Revolving Credit Termination Date and Facility Termination Date by submitting a request for an extension to the Agent (an "EXTENSION REQUEST") no more than sixty (60) days prior to the then effective Revolving Credit Termination Date. The Extension Request must specify the new Revolving Credit Termination Date and Facility Termination Date requested by the Borrower and the date (which must be at least thirty (30) days after the Extension Request is delivered to the Agent) as of which the Lenders must respond to the Extension Request (the "RESPONSE DATE"). The new Revolving Credit Termination Date shall be no more than 364 days after the Revolving Credit Termination Date in effect at the time the Extension Request is received, including the current Revolving Credit Termination Date as one of the days in the calculation of the days elapsed and the new Facility Termination Date shall be one (1) year after the new Revolving Credit Termination Date. Promptly upon receipt of an Extension Request, the Agent shall notify each Lender of the contents thereof and shall request each Lender to approve the Extension Request. Each Lender may, in its sole discretion, elect to approve or deny such Extension Request. Failure of a Lender to respond to an Extension Request by the Response Date shall be deemed a refusal to approve such Extension Request. Each Lender approving the Extension Request shall deliver its written consent no later than the Response Date. If the consent of each of the Lenders is received by the Agent, the Revolving Credit Termination Date and Facility Termination Date specified in the Extension Request shall become effective on the existing Revolving Credit Termination Date and the Agent shall promptly notify the Borrower and each Lender of the new Revolving Credit Termination Date and Facility Termination Date. In the event that a consent is not received from each of the Lenders, then there shall be no extension of the existing Revolving Credit Termination Date and Facility Termination Date.
2.20. REPLACEMENT OF LENDER. If the Borrower is required pursuant to
SECTION 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender's obligation to make or continue, or to convert Alternate Base Rate Advances into, Eurodollar Advances shall be suspended pursuant to SECTION 3.3 (any Lender so affected an "AFFECTED LENDER"), the Borrower may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, PROVIDED that no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and
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PROVIDED FURTHER that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an assignment substantially in the form of EXHIBIT C and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of SECTION 12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected Lender in same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under SECTIONS 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under SECTION 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the date of this Agreement, the adoption of any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change in the interpretation or administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:
(a) subjects any Lender or any applicable Lending Installation to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender in respect of its Eurodollar Loans, or
(b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining its Eurodollar Loans or reduces any amount receivable by any Lender or any applicable Lending Installation in connection with its Eurodollar Loans, or requires any Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of Eurodollar Loans held or interest received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation of making or maintaining its Eurodollar Loans or Commitment or to reduce the
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return received by such Lender or applicable Lending Installation in connection with such Eurodollar Loans or Commitment, then, within fifteen (15) days of demand by such Lender, the Borrower shall pay such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction in amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a Change, then, within fifteen (15) days of demand by such Lender, the Borrower shall pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Agreement, its Loans or its Commitment to make Loans hereunder (after taking into account such Lender's policies as to capital adequacy). "CHANGE" means (a) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (b) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any Person controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (a) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices entitled "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that maintenance of its Eurodollar Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, interpretation or directive, whether or not having the force of law, or if the Required Lenders determine that (a) deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available or (b) the interest rate applicable to Eurodollar Advances does not accurately or fairly reflect the cost of making or maintaining Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be repaid or converted to Alternate Base Rate Advances, subject to the payment of any funding indemnification amounts required by SECTION 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance occurs on a date prior to the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5. TAXES. (a) All payments by the Borrower to or for the account of any Lender or the Agent hereunder or under any Note shall be made free and clear of and without deduction for
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any and all Taxes. If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 3.5) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (iv) the Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof within thirty (30) days after such payment is made.
(b) In addition, the Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note ("OTHER TAXES").
(c) The Borrower hereby agrees to indemnify the Agent and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this
SECTION 3.5) paid by the Agent or such Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty (30) days of the date the Agent or such Lender makes demand therefor pursuant to SECTION 3.6.
(d) Each Lender that is not incorporated under the laws of the United States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it will, not more than ten (10) Business Days after the date of this Agreement, (i) deliver to each of the Borrower and the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, and (ii) deliver to each of the Borrower and the Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from United States backup withholding tax. Each Non-U.S. Lender further undertakes, to the extent lawful at such time, to deliver to each of the Borrower and the Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Borrower or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, UNLESS an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises
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the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide the Borrower with an appropriate form pursuant to CLAUSE (d), above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this SECTION 3.5 with respect to Taxes imposed by the United States; PROVIDED that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under CLAUSE (d), above, the Borrower shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason not caused by or constituting gross negligence or willful misconduct of the Agent), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under this subsection, together with all reasonable costs and expenses related thereto (including reasonable attorneys fees and reasonable time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The obligations of the Lenders under this SECTION 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrower to such Lender under SECTIONS 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under SECTION 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrower (with a copy to the Agent) as to the amount due, if any, under SECTION 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
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reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrower in the absence of manifest error. The Borrower shall have no obligation to reimburse, compensate or indemnify any Lender with respect to a claim under this ARTICLE III if the Lender fails to deliver such written statement within 180 days after the date on which the Lender becomes aware of the event or occurrence giving rise to such claim. Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrower of such written statement. The obligations of the Borrower under SECTIONS 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. EFFECTIVENESS. This Agreement shall not become effective unless and until the Borrower has furnished the following to the Agent with sufficient copies for the Lenders and the other conditions set forth below have been satisfied:
(a) CHARTER DOCUMENTS; GOOD STANDING CERTIFICATES. Copies of the certificate of incorporation of the Borrower, together with all amendments thereto, both certified by the appropriate governmental officer in its jurisdiction of incorporation, together with a good standing certificate issued by the Secretary of State of the jurisdiction of its incorporation and such other jurisdictions as shall be requested by the Agent.
(b) BY-LAWS AND RESOLUTIONS. Copies, certified by the Secretary or Assistant Secretary of the Borrower, of its by-laws and of its Board of Directors' resolutions authorizing the execution, delivery and performance of the Loan Documents by the Borrower.
(c) SECRETARY'S CERTIFICATE. An incumbency certificate, executed by the Secretary or Assistant Secretary of the Borrower, which shall identify by name and title and bear the signature of the officers of the Borrower authorized to sign the Loan Documents and to make borrowings hereunder, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Borrower.
(d) OFFICER'S CERTIFICATE. A certificate, dated the date of this Agreement, signed by an Authorized Officer of the Borrower, in form and substance satisfactory to the Agent, to the effect that: (i) on such date (both before and after giving effect to the making of any Loans hereunder on such date) no Default or Unmatured Default has occurred and is continuing; (ii) each of the representations and warranties set forth in ARTICLE V of this Agreement is true and correct on and as of such date; and (iii) since December 31, 2000 no event or change has occurred that has caused or evidences a Material Adverse Effect.
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(e) LEGAL OPINIONS. Written opinions of internal counsel to the Borrower and of Sidley Austin Brown & Wood, special counsel to the Borrower, addressed to the Agent and the Lenders in form and substance acceptable to the Agent and its counsel.
(f) NOTES. Any Notes requested by a Lender pursuant to SECTION 2.13 payable to the order of each such requesting Lender.
(g) LOAN DOCUMENTS. Executed originals of this Agreement and each of the Loan Documents, which shall be in full force and effect, together with all schedules, exhibits, certificates, instruments, opinions, documents and financial statements required to be delivered pursuant hereto and thereto.
(h) LETTERS OF DIRECTION. Written money transfer instructions in form and substance acceptable to the Agent and its counsel addressed to the Agent and signed by an Authorized Officer, together with such other related money transfer authorizations as the Agent may have reasonably requested.
(i) PAYMENT OF FEES. The Borrower shall have paid all fees due to Bank One under the fee letter dated November 28, 2001.
(j) EXISTING CREDIT AGREEMENTS. The Existing Credit Agreements shall have expired or been terminated and all amounts owing thereunder (including all principal, interest and accrued fees) shall have been paid (or shall contemporaneously be paid) in full.
(k) OTHER. Such other documents as the Agent, any Lender or their counsel may have reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and none would result from such Advance;
(b) The representations and warranties contained in ARTICLE V (other than SECTION 5.6) are true and correct as of such Borrowing Date;
(c) A Borrowing Notice shall have been properly submitted; and
(d) All legal matters incident to the making of such Advance shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute a representation and warranty by the Borrower that the conditions contained in
SECTION 4.2 have been satisfied. Any Lender may require a duly completed compliance certificate in substantially the form of EXHIBIT B hereto as a condition to making an Advance.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and its Subsidiaries is a corporation duly and properly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and is duly qualified and in good standing as a foreign corporation and is duly authorized to conduct its business in each jurisdiction in which its business is conducted or proposed to be conducted except where failure to be so qualified or authorized could not reasonably be expected to have a Material Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. The Borrower has all requisite power and authority (corporate and otherwise) and legal right to execute and deliver each of the Loan Documents and to perform its obligations thereunder. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder have been duly authorized by proper corporate proceedings and the Loan Documents constitute legal, valid and binding obligations of the Borrower enforceable against the Borrower, in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally.
5.3. COMPLIANCE WITH LAWS AND CONTRACTS. The Borrower and its Subsidiaries have complied in all material respects with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof, having jurisdiction over the conduct of their respective businesses or the ownership of their respective properties, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Neither the execution and delivery by the Borrower of the Loan Documents, the application of the proceeds of the Loans, or any other transaction contemplated in the Loan Documents, nor compliance with the provisions of the Loan Documents will, or at the relevant time did, (a) violate any law, rule, regulation (including Regulation U), order, writ, judgment, injunction, decree or award binding on the Borrower or any Subsidiary or the Borrower's or any Subsidiary's charter, articles or certificate of incorporation or by-laws, (b) violate the provisions of or require the approval or consent of any party to any indenture, instrument or agreement to which the Borrower or any Subsidiary is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien (other than Liens permitted by the Loan Documents) in, of or on the property of the Borrower or any Subsidiary pursuant to the terms of any such indenture, instrument or agreement, or (c) require any consent of the stockholders of any Person, except for any violation of, or failure to obtain an approval or consent required under, any such indenture, instrument or agreement that could not reasonably be expected to have a Material Adverse Effect.
5.4. GOVERNMENTAL CONSENTS. No order, consent, approval, qualification, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of, any court, governmental or public body or authority, or any subdivision
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thereof, any securities exchange or other Person is or at the relevant time was required to authorize, or is or at the relevant time was required in connection with the execution, delivery, consummation or performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents, the application of the proceeds of the Loans or any other transactions contemplated in the Loan Documents. Neither the Borrower nor any Subsidiary is in default under or in violation of any foreign, federal, state or local law, rule, regulation, order, writ, judgment, injunction, decree or award binding upon or applicable to the Borrower or such Subsidiary, in each case the consequence of which default or violation could reasonably be expected to have a Material Adverse Effect.
5.5. FINANCIAL STATEMENTS. The Borrower has heretofore furnished to each of the Lenders (a) the December 31, 2000 audited consolidated financial statements of the Borrower and its Subsidiaries, and (b) the unaudited consolidated financial statements of the Borrower and its Subsidiaries through September 30, 2001 (collectively, the "FINANCIAL STATEMENTS"). Each of the Financial Statements was prepared in accordance with Agreement Accounting Principles and fairly presents the consolidated financial condition and operations of the Borrower and its Subsidiaries at such dates and the consolidated results of their operations for the respective periods then ended (except, in the case of such unaudited statements, for normal year-end audit adjustments).
5.6. MATERIAL ADVERSE CHANGE. Since December 31, 2000, there has been no change in the business, Property, condition (financial or otherwise), performance, prospects or results of operations of the Borrower and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect.
5.7. TAXES. The Borrower and its Subsidiaries have filed or caused to be filed on a timely basis and in correct form all United States federal, state and other material tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Borrower or any Subsidiary, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists. As of the date hereof, the United States income tax returns of the Borrower on a consolidated basis have been audited by the Internal Revenue Service through its Fiscal Year ending December 31, 1989. No tax liens have been filed and no claims are being asserted with respect to any such taxes which could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of any taxes or other governmental charges are in accordance with Agreement Accounting Principles.
5.8. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation, arbitration, proceeding, inquiry or governmental investigation (including, without limitation, by the Federal Trade Commission) pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any Subsidiary or any of their respective Properties that could reasonably be expected to have a Material Adverse Effect or to prevent, enjoin or unduly delay the making of the Loans under this Agreement.
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5.9. ERISA. The Unfunded Liability of all Single Employer Plans does not in the aggregate exceed twenty percent (20%) of the Total Plan Liability for all Single Employer Plans. Neither the Borrower nor any other member of the Controlled Group maintains, or is obligated to contribute to, any Multiemployer Plan or has incurred, or is reasonably expected to incur, any withdrawal liability to any Multiemployer Plan. Each Plan complies in all material respects with all applicable requirements of law and regulations. Neither the Borrower nor any member of the Controlled Group has, with respect to any Plan, failed to make any contribution or pay any amount required under Section 412 of the Code or Section 302 of ERISA or the terms of such Plan which could reasonably be expected to have a Material Adverse Effect. There are no pending or, to the knowledge of the Borrower, threatened claims, actions, investigations or lawsuits against any Plan, any fiduciary thereof, or the Borrower or any member of the Controlled Group with respect to a Plan which could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any member of the Controlled Group has engaged in any prohibited transaction (as defined in
Section 4975 of the Code or Section 406 of ERISA) in connection with any Plan which would subject such Person to any material liability. Within the last five
(5) years neither the Borrower nor any member of the Controlled Group has engaged in a transaction which resulted in a Single Employer Plan with an Unfunded Liability being transferred out of the Controlled Group which could reasonably be expected to have a Material Adverse Effect. No Termination Event has occurred or is reasonably expected to occur with respect to any Plan which is subject to Title IV of ERISA which could reasonably be expected to have a Material Adverse Effect.
5.10. DEFAULTS. No Default or Unmatured Default has occurred and is continuing.
5.11. REGULATION U. Margin Stock constitutes less than 25% of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder. Neither the Borrower nor any Subsidiary is engaged, directly or indirectly, principally, or as one of its important activities, in the business of extending, or arranging for the extension of, credit for the purpose of purchasing or carrying Margin Stock. No part of the proceeds of any Loan will be used in a manner which would violate, or result in a violation of, Regulation U. Neither the making of any Advance hereunder nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation U.
5.12. INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither the Borrower nor any Subsidiary is, or after giving effect to any Advance will be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Neither the Borrower nor any Subsidiary is a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.13. OWNERSHIP OF PROPERTIES. As of the date of this Agreement, the Borrower and its Subsidiaries have a subsisting leasehold interest in, or good and marketable title, free of all Liens, other than those permitted by SECTION 6.12 or by any of the other Loan Documents, to all of the properties and assets reflected in the Financial Statements as being owned by it, except for assets sold, transferred or otherwise disposed of in the ordinary course of business or as required
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by or in connection with the CSC Spin-Off (provided that such sale, transfer or other disposal in connection with the CSC Spin-Off could not reasonably be expected to have a Material Adverse Effect) since the date thereof. The Borrower and its Subsidiaries own or possess rights to use all licenses, patents, patent applications, copyrights, service marks, trademarks and trade names necessary to continue to conduct their business as heretofore conducted, and no such license, patent or trademark has been declared invalid, been limited by order of any court or by agreement or is the subject of any infringement, interference or similar proceeding or challenge, except for proceedings and challenges which could not reasonably be expected to have a Material Adverse Effect.
5.14. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect or which restricts or imposes conditions upon the ability of any Subsidiary to (a) pay dividends or make other distributions on its capital stock, (b) make loans or advances to the Borrower or (c) repay loans or advances from the Borrower. Neither the Borrower nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement to which it is a party, which default could reasonably be expected to have a Material Adverse Effect.
5.15. ENVIRONMENTAL LAWS. There are no claims, investigations, litigation, administrative proceedings, notices, requests for information (each a "PROCEEDING"), whether pending or threatened, or judgments or orders asserting violations of applicable federal, state and local environmental, health and safety statutes, regulations, ordinances, codes, rules, orders, decrees, directives and standards ("ENVIRONMENTAL LAWS") or relating to any toxic or hazardous waste, substance or chemical or any pollutant, contaminant, chemical or other substance defined or regulated pursuant to any Environmental Law, including, without limitation, asbestos, petroleum, crude oil or any fraction thereof ("HAZARDOUS MATERIALS") asserted against the Borrower or any of its Subsidiaries which, in any case, could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary has caused or permitted any Hazardous Materials to be released, either on or under real property, currently or formerly, legally or beneficially owned or operated by the Borrower or any Subsidiary or on or under real property to which the Borrower or any of its Subsidiaries transported, arranged for the transport or disposal of, or disposed of Hazardous Materials, which release could reasonably be expected to have a Material Adverse Effect.
5.16. INSURANCE. The Borrower and its Subsidiaries maintain, with financially sound and reputable insurance companies, insurance on their Property in such amounts and covering such risks as is consistent with sound business practice.
5.17. INSURANCE LICENSES. No material license, permit or authorization of the Borrower or any Subsidiary to engage in the business of insurance or insurance-related activities is the subject of a proceeding for suspension or revocation, except where such suspension or revocation would not individually or in the aggregate have a Material Adverse Effect.
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5.18. SOLVENCY. Immediately after the consummation of the CSC Spin-Off and the making of any Loans related thereto, (a) the fair value of the assets of the Post-Spin-Off Group on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Post-Spin-Off Group on a consolidated basis; (b) the present fair saleable value of the Property of the Post-Spin-Off Group on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Post-Spin-Off Group on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) the Post-Spin-Off Group on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Post-Spin-Off Group on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and as proposed to be conducted taking into account the CSC Spin-Off.
5.19. DISCLOSURE. None of the (a) information, exhibits or reports furnished or to be furnished by the Borrower or any Subsidiary to the Agent or to any Lender in connection with the negotiation of the Loan Documents, or (b) representations or warranties of the Borrower or any Subsidiary contained in this Agreement, the other Loan Documents, or any other document, certificate or written statement furnished to the Agent or the Lenders by or on behalf of the Borrower or any Subsidiary for use in connection with the transactions contemplated by this Agreement, as the case may be, contained, contains or will contain any untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. As of the date hereof, there is no fact known to the Borrower (other than matters of a general economic nature) that has had or could reasonably be expected to have a Material Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and each Subsidiary, a system of accounting established and administered in accordance with generally accepted accounting principles, consistently applied, and will furnish to the Lenders:
(a) As soon as practicable and in any event within ninety (90) days after the close of each of its Fiscal Years, an unqualified audit report certified by independent certified public accountants, acceptable to the Lenders, prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, including balance sheets as of the end of such period and related statements of income, retained earnings and cash flows accompanied by (i) any management letter prepared by said accountants and (ii) a
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certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof.
(b) As soon as practicable and in any event within 45 days after the close of the first three Fiscal Quarters of each of its Fiscal Years, for itself and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated statements of income, retained earnings and cash flows for the period from the beginning of such Fiscal Year to the end of such quarter, all certified by its chief financial officer.
(c) Together with the financial statements required by CLAUSES
(a) and (b) above, a compliance certificate in substantially the form of EXHIBIT B hereto signed by its chief financial officer showing the calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.
(d) Within 270 days after the close of each Fiscal Year, a statement of the Unfunded Liabilities of each Single Employer Plan, certified as correct by an actuary enrolled under ERISA.
(e) As soon as possible and in any event within ten (10) days after the Borrower knows that any Termination Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of the Borrower, describing said Termination Event and the action which the Borrower proposes to take with respect thereto.
(f) As soon as possible and in any event within ten (10) days after the Borrower learns thereof, notice of the assertion or commencement of any claims, action, suit or proceeding against or affecting the Company or any Subsidiary which may reasonably be expected to have a Material Adverse Effect.
(g) Promptly upon learning thereof, notice of any change in the credit rating of the Borrower's senior unsecured long term debt by S&P or Moody's.
(h) Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of all financial statements, reports and proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission.
(j) Promptly upon learning thereof, notice of the completion of the CSC Spin-Off.
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(k) Such other information (including, without limitation, non-financial information) as the Agent or any Lender may from time to time reasonably request.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary to, use the proceeds of the Advances to meet the general corporate needs of the Borrower and its Subsidiaries, including commercial paper support. The Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any "margin stock" (as defined in Regulation U) or to finance the acquisition of any Person which has not been approved and recommended by the board of directors (or functional equivalent thereof) of such Person.
6.3. NOTICE OF DEFAULT. The Borrower will give prompt notice in writing to the Lenders of the occurrence of (a) any Default or Unmatured Default and (b) of any other event or development, financial or other, relating specifically to the Borrower or any of its Subsidiaries (and not of a general economic or political nature) which could reasonably be expected to have a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and to do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; PROVIDED, HOWEVER, that nothing in this SECTION 6.4 shall prohibit (a) the dissolution or sale, transfer or other disposition of any Subsidiary that is not otherwise prohibited by this Agreement or (b) the occurrence of the CSC Spin-Off and the provision of the Transitional Services.
6.5. TAXES. The Borrower will, and will cause each Subsidiary to, timely file complete and correct United States federal and applicable foreign, state and local tax returns required by applicable law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies insurance on all their Property in such amounts and covering such risks as is consistent with sound business practice, and the Borrower will furnish to the Agent and any Lender upon request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, the failure to comply with which could reasonably be expected to have a Material Adverse Effect.
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6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each Subsidiary to, do all things necessary to maintain, preserve, protect and keep its Property in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times.
6.9. INSPECTION. The Borrower will, and will cause each Subsidiary to, permit the Agent and the Lenders, by their respective representatives and agents, to inspect any of the Property, corporate books and financial records of the Borrower and each Subsidiary, to examine and make copies of the books of accounts and other financial records of the Borrower and each Subsidiary, and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Lenders may designate. The Borrower will keep or cause to be kept, and cause each Subsidiary to keep or cause to be kept, appropriate records and books of account in which complete entries are to be made reflecting its and their business and financial transactions, such entries to be made in accordance with Agreement Accounting Principles consistently applied.
6.10. CAPITAL STOCK AND DIVIDENDS. So long as any Default or Unmatured Default has occurred and is continuing, the Borrower will not declare or pay any dividends or make any distributions on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock or any options or other rights in respect thereof at any time outstanding, other than any such dividend or distribution required in connection with the CSC Spin-Off; PROVIDED that no such dividend or distribution could reasonably be expected to have a Material Adverse Effect.
6.11. MERGER. Except with respect to any transaction or step required in connection with the CSC Spin-Off (provided that no such transaction or step could reasonably be expected to have a Material Adverse Effect), the Borrower will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that (a) a Wholly-Owned Subsidiary may merge into the Borrower or any Wholly-Owned Subsidiary of the Borrower, (b) the Borrower or any Subsidiary may merge or consolidate with any other Person so long as the Borrower or such Subsidiary is the continuing or surviving corporation and, prior to and after giving effect to such merger or consolidation, no Default or Unmatured Default shall exist, and (c) any Subsidiary may enter into a merger or consolidation as a means of effecting a disposition or acquisition which would not result in a Default or Unmatured Default.
6.12. LIENS. The Borrower will not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with generally accepted principles of accounting shall have been set aside on its books;
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(b) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure the payment of obligations not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or the Subsidiaries;
(e) Encumbrances over and limited to the balance of credit balances on bank accounts of the Borrower and its Subsidiaries created in order to facilitate the operation of such bank accounts and other bank accounts of the Borrower and its Subsidiaries on a net balance basis with credit balances and debit balances on the various accounts being netted off for interest purposes;
(f) Any Lien arising by operation of law in the ordinary course of trading in respect of any obligation which is less than sixty (60) days overdue or which is being contested in good faith and by appropriate means and for which adequate reserves have been made;
(g) Encumbrances created by any of the Borrower or its Subsidiaries over deposits and investments in the ordinary course of such Person's insurance and reinsurance trade to comply with the requirements of any regulatory body of insurance or insurance broking business; and
(h) Other Liens securing an aggregate principal amount of obligations at no time exceeding an amount equal to ten percent (10%) of Consolidated Net Worth at such time; PROVIDED, HOWEVER that during any period when the sum of (i) the aggregate principal amount of all obligations secured pursuant to this SECTION 6.12(h) plus (ii) the aggregate Unfunded Liability of all Single Employer Plans exceeds ten percent (10%) of Consolidated Net Worth, the creation of additional Liens otherwise allowed hereunder shall be permitted by this SECTION 6.12(h) only to the extent they secure an aggregate principal amount of obligations not in excess of one percent (1%) of Consolidated Net Worth.
6.13. AFFILIATES. The Borrower will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except (a) for transactions between the Borrower and any Wholly-Owned Subsidiary of the Borrower or between Wholly-Owned Subsidiaries of the Borrower, (b) in the ordinary course of business and pursuant to the reasonable requirements of the Borrower's or such Subsidiary's business and upon fair and
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reasonable terms no less favorable to the Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms-length transaction and (c) as required in connection with the CSC Spin-Off; PROVIDED that no such transaction, payment or transfer could reasonably be expected to have a Material Adverse Effect.
6.14. CHANGE IN FISCAL YEAR. The Borrower shall not change its Fiscal Year to end on any date other than December 31 of each year.
6.15. INCONSISTENT AGREEMENTS. The Borrower shall not, nor shall it permit any Subsidiary to, enter into any indenture, agreement, instrument or other arrangement which, (a) directly or indirectly prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon, the incurrence of the Obligations, the amending of the Loan Documents or the ability of any Subsidiary to (i) pay dividends or make other distributions on its capital stock, (ii) make loans or advances to the Borrower or (iii) repay loans or advances from the Borrower or (b) contains any provision which would be violated or breached by the making of Advances or by the performance by the Borrower of any of its obligations under any Loan Document.
6.16. SALE OF ASSETS. Except with respect to any transaction or step required in connection with the CSC Spin-Off (provided that no such transaction or step could reasonably be expected to have a Material Adverse Effect), the Borrower will not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of Property which represents more than 25% of the consolidated assets of the Borrower and its Subsidiaries, as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries as at the end of the quarter immediately preceding the date on which such determination is made, to any other Person(s) in any Fiscal Year.
6.17. Financial Covenants.
6.17.1. MINIMUM CONSOLIDATED NET WORTH. The Borrower shall at all times prior to the CSC Spin-Off maintain a minimum Consolidated Net Worth of at least $2,500,000,000 and shall at all times from and after the CSC Spin-Off maintain a minimum Consolidated Net Worth of at least $2,000,000,000.
6.17.2. CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE. The Borrower will maintain, as at the last day of each of its fiscal quarters, a ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense, in each case calculated for the four fiscal quarters then ending, of not less than 4.0 to 1.0.
6.18. ERISA. The Borrower will (a) fulfill, and cause each member of the Controlled Group to fulfill, its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan, except where a failure to fulfill such obligations individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, (b) comply, and cause each member of the Controlled Group to comply, with all applicable provisions of ERISA and the Code with respect to each Plan, except where such failure or noncompliance individually
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or in the aggregate would not have a Material Adverse Effect and (c) not, and not permit any member of the Controlled Group to, (i) seek a waiver of the minimum funding standards under ERISA, (ii) terminate or withdraw from any Plan or (iii) take any other action with respect to any Plan which would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to administer, any Plan, unless the actions or events described in the foregoing clauses (i), (ii) or (iii) individually or in the aggregate would not have a Material Adverse Effect.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or in connection with this Agreement, any other Loan Document, any Loan, or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be false in any material respect on the date as of which made or deemed made.
7.2. Nonpayment of (a) any principal of any Loan when due, or (b) any interest upon any Loan or any facility fee, utilization fee or other fee or obligations under any of the Loan Documents within five (5) days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
SECTION 6.2, SECTION 6.3(a) or SECTIONS 6.10 through 6.18.
7.4. The breach by the Borrower (other than a breach which constitutes a Default under SECTION 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement which is not remedied within twenty (20) days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any Indebtedness aggregating in excess of $25,000,000 when due; or the default by the Borrower or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement or agreements under which any such Indebtedness was created or is governed, or the occurrence of any other event or existence of any other condition, the effect of any of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (b) make an assignment for the benefit of creditors, (c) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (d) institute any proceeding seeking an order for relief under
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the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (e) take any corporate action to authorize or effect any of the foregoing actions set forth in this SECTION 7.6, (f) fail to contest in good faith any appointment or proceeding described in SECTION 7.7 or (g) become unable to pay, not pay, or admit in writing its inability to pay, its debts generally as they become due.
7.7. Without the application, approval or consent of the Borrower or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Borrower or any of its Subsidiaries or any Substantial Portion of its Property, or a proceeding described in SECTION 7.6(d) shall be instituted against the Borrower or any of its Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty (60) consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of (each a "CONDEMNATION"), all or any portion of the Property of the Borrower and its Subsidiaries which, when taken together with all other Property of the Borrower and its Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within thirty
(30) days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $25,000,000 (or multiple judgments or orders for the payment of an aggregate amount in excess of $50,000,000), which is not stayed on appeal or otherwise being appropriately contested in good faith and as to which no enforcement actions have been commenced.
7.10. Any Change in Control shall occur.
7.11. The Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate twenty percent (20%) of the Total Plan Liability for all Single Employer Plans or any Termination Event shall occur in connection with any Plan which could reasonably be expected to have a Material Adverse Effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in SECTION 7.6 or 7.7 occurs with respect to the Borrower, the obligations of the Lenders to make Loans hereunder shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Agent or any Lender. If any other Default occurs, the Required Lenders (or the Agent with the consent or upon the instruction of the Required Lenders) may terminate or
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suspend the obligations of the Lenders to make Loans hereunder, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives.
If, within ten (10) Business Days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans hereunder as a result of any Default (other than any Default as described in
SECTION 7.6 or 7.7 with respect to the Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (or, in the case of an acceleration and/or termination upon the occurrence of a Default under SECTION 7.10, the Modified Required Lenders), in their sole discretion, shall so direct, the Agent shall, by notice to the Borrower, rescind and annul such acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this ARTICLE VIII, the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or thereunder or waiving any Default hereunder or thereunder; PROVIDED, HOWEVER, that no such supplemental agreement shall, without the consent of each Lender:
(a) Extend the Facility Termination Date or the Revolving Credit Termination Date, compromise or forgive the principal amount of any Loan, or reduce the rate of interest or compromise or forgive payment of interest on any Loan, or reduce the amount of any fee payable hereunder;
(b) Reduce the percentage specified in the definition of Required Lenders or Modified Required Lenders;
(c) Increase the amount of the Commitment of any Lender hereunder (except pursuant to SECTION 2.5(b));
(d) Amend this SECTION 8.2; or
(e) Permit any assignment by the Borrower of its Obligations or its rights hereunder.
PROVIDED, FURTHER, that no such supplemental agreement shall, without the consent of the Modified Required Lenders amend the definition of "Change of Control" or amend or waive SECTION 7.10.
No amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent. The Agent may waive payment of the fee required under SECTION 12.3.2 without obtaining the consent of any other party to this Agreement.
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Notwithstanding the foregoing, upon the execution and delivery of all documentation required by SECTION 2.5(b) to be delivered in connection with an increase to the Aggregate Commitment, the Agent, the Borrower and the new or existing Lenders whose Commitments have been affected may and shall enter into an amendment hereof (which shall be binding on all parties hereto) solely for the purpose of reflecting any new Lenders and their new Commitments and any increase in the Commitment of any existing Lender.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Loan notwithstanding the existence of a Default or the inability of the Borrower to satisfy the conditions precedent to such Loan shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to SECTION 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the Borrower contained in this Agreement or of the Borrower or any Subsidiary contained in any Loan Document shall survive the making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation.
9.3. HEADINGS. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and understanding among the Borrower, the Agent and the Lenders and supersede all prior agreements and understandings among the Borrower, the Agent and the Lenders relating to the subject matter thereof other than the fee letter described in SECTION 10.13.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors
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and assigns; PROVIDED, HOWEVER, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of SECTIONS 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.
9.6. EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the Agent and the Arranger for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent or the Arranger, which attorneys may be employees of the Agent or the Arranger) paid or incurred by the Agent or the Arranger in connection with the preparation, negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment, modification, and administration of the Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger and the Lenders for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, the Arranger and the Lenders, which attorneys may be employees of the Agent, the Arranger or the Lenders) paid or incurred by the Agent, the Arranger or any Lender in connection with the collection of the Obligations or the enforcement of the Loan Documents. The Borrower further agrees to indemnify the Agent, the Arranger, each Lender, their respective affiliates, and each of their directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, the Arranger, any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby, or the direct or indirect application or proposed application of the proceeds of any Loan hereunder except to the extent that they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party seeking indemnification. The obligations of the Borrower under this SECTION 9.6 shall survive the termination of this Agreement.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders.
9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between the Borrower on the one hand and the Lenders and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent, the Arranger nor any Lender shall have any fiduciary responsibilities to the
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Borrower. Neither the Agent, the Arranger nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower's business or operations. Neither the Agent, the Arranger nor any Lender shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by the Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.
9.11. CONFIDENTIALITY. Each Lender agrees to hold any confidential information which it may receive from the Borrower pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which such Lender is a party, (vi) to such Lender's direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, and (vii) permitted by Section 12.4.
9.12. DISCLOSURE. The Borrower and each Lender hereby acknowledge and agree that Bank One and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its Affiliates.
ARTICLE X
THE AGENT
10.1. APPOINTMENT. Bank One, NA is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the "Agent") hereunder and under each other Loan Document, and each of the Lenders irrevocably (subject to Section 10.12) authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this ARTICLE X. Notwithstanding the use of the defined term "Agent," it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative, the Agent (i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of the Lenders within the meaning of Section 1-201 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with
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such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder, except any action specifically provided by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in ARTICLE IV, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any collateral security; or (g) the financial condition of the Borrower or any guarantor of any of the Obligations or of any of the Borrower's or any such guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Borrower to the Agent at such time, but is voluntarily furnished by the Borrower to the Agent (either in its capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders or, if expressly required hereunder, the Modified Required Lenders or all the Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders or, if expressly required hereunder, the Modified Required Lenders or all the Lenders. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro-rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities
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received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Agent and the Lenders and all matters pertaining to the Agent's duties hereunder and under any other Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents, PROVIDED that (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required pursuant to SECTION 3.5(g) shall, notwithstanding the provisions of this SECTION 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under this SECTION 10.8 shall survive payment of the Obligations and termination of this Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender, the Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitment and its Loans as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless
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the context otherwise indicates, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has, independently and without reliance upon the Agent, the Arranger or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Arranger or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, 45 days after the retiring Agent gives notice of its intention to resign. The Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders, such removal to be effective on the date specified by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders within thirty (30) days after the resigning Agent's giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of the Borrower and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of the Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Agent hereunder. If the Agent has resigned or been removed and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders; PROVIDED, such Lenders so performing such duties shall be deemed to be an Agent hereunder with full benefit of all provisions indemnifying the Agent hereunder. No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of the Agent, the resigning or removed Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of an Agent, the provisions of this ARTICLE X shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. In the event that there is a successor to the
-44-

Agent by merger, or the Agent assigns its duties and obligations to an Affiliate pursuant to this SECTION 10.12, then the term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Agent.
10.13. AGENT AND ARRANGER FEES. The Borrower agrees to pay to the Agent and the Arranger, for their respective accounts, the fees agreed to by the Borrower, the Agent and the Arranger pursuant to that certain letter agreement dated November 28, 2001, or as otherwise agreed from time to time.
10.14. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under ARTICLES IX and X.
10.15. SYNDICATION AGENTS; SENIOR MANAGING AGENTS; MANAGING AGENTS. None of the Lenders identified in this Agreement as the "Syndication Agents", "Senior Managing Agents" or "Managing Agents" shall have any right, power, obligation, liability, responsibility or duty under this Agreement in such identified capacity other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Agent in SECTION 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of the Lenders under applicable law, if the Borrower becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of the Borrower may be offset and applied toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has payment made to it upon its Loans (other than payments received pursuant to
SECTION 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Loans held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of Loans. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their Loans. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. If an amount to be setoff is to be applied to Indebtedness of the Borrower to a Lender,
-45-

other than Indebtedness comprised of Loans made by such Lender, such amount shall be applied ratably to such other Indebtedness and to the Indebtedness comprised of such Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lenders and their respective successors and assigns, except that (i) the Borrower shall not have the right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with SECTION 12.3. The parties to this Agreement acknowledge that clause (ii) of this SECTION 12.1 relates only to absolute assignments and does not prohibit assignments creating security interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee; PROVIDED, HOWEVER, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of SECTION 12.3. The Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with SECTION 12.3; PROVIDED, HOWEVER, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Loans and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents.
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12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of SECTION 8.2 or of any other Loan Document.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each Participant which has been identified as such to the Borrower in writing shall be deemed to have the right of setoff provided in SECTION 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents; PROVIDED, that each Lender shall retain the right of setoff provided in SECTION 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in SECTION 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with SECTION 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more banks or other entities ("PURCHASERS") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of EXHIBIT C or in such other form as may be agreed to by the parties thereto. The consent of the Borrower and the Agent shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Lender, an Affiliate thereof or an Approved Fund; PROVIDED, HOWEVER, that if a Default has occurred and is continuing, the consent of the Borrower shall not be required. Such consent shall not be unreasonably withheld or delayed. Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate thereof shall (unless each of the Borrower and the Agent otherwise consents) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the remaining amount of the assigning Lender's Commitment (calculated as at the date of such assignment) or outstanding Loans (if the applicable Commitment has been terminated).
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of an assignment, together with any consents required by SECTION 12.3.1, and
(ii) payment of a $4,000 fee to the Agent for processing such assignment, such assignment shall become effective on the effective date specified in such assignment. The assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Loans under the applicable assignment agreement constitutes "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a
-47-

Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Lenders or the Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Commitment and Loans assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this SECTION 12.3.2, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any prospective Transferee any and all information in such Lender's possession concerning the creditworthiness of the Borrower and its Subsidiaries; PROVIDED that each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of SECTION 3.5(d).
-48-

ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by SECTION 2.14 with respect to borrowing notices, all notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Agent, at its address or facsimile number set forth on the signature pages hereof, (y) in the case of any Lender, at its address or facsimile number set forth below its signature hereto or (z) in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower in accordance with the provisions of this SECTION 13.1. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section; PROVIDED that notices to the Agent under ARTICLE II shall not be effective until received.
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Agent and the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN
-49-

ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[signature pages to follow]
-50-

IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed this Agreement as of the date first above written.
AON CORPORATION

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    Aon Center
                    200 East Randolph Drive
                    Chicago, Illinois  60601
                    Attn:  Diane Aigotti

        Telecopy:   (312) 381-6060
        Telephone:  (312) 381-3230	

BANK ONE, NA,

individually and as Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    1 Bank One Plaza
                    Suite IL1-0085, 16th Floor
                    Chicago, Illinois 60670
                    Attn: Cindy Priest

        Telecopy:   (312) 732-4033
        Telephone:  (312) 732-9565	

ABN AMRO BANK N.V.,
 individually and as Syndication Agent
By:

Print Name:

Title:

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    135 S. LaSalle Street,
                    Suite 625
                    Chicago, IL 60674
                    Attn:  Andrew Haak

        Telecopy:   (312) 606-8425
        Telephone:  (312) 904-2851	

CITIBANK, N.A.,
 individually and as Syndication Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    388 Greenwich Street
                    22nd Floor
                    New York, New York 10013
                    Attn:  Peter C. Bickford

        Telecopy:   (212) 816-4144
        Telephone:  (212) 816-4022	

FIRST UNION NATIONAL BANK,
 individually and as Syndication Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    301 South College Street
                    DC-5,
                    NC0169
                    Charlotte, NC 28288-0169
                    Attn:  Lance P. Black

        Telecopy:   (704) 383-7611
        Telephone:  (704) 374-6628	

JP MORGAN CHASE BANK,
 individually and as Senior Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    270 Park Avenue
                    15th Floor
                    New York, NY 10017
                    Attn: Helen Newcomb

        Telecopy:   (212) 270-0412
        Telephone:  (212) 270-6260	

THE BANK OF NEW YORK,
 individually and as Senior Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    One Wall Street
                    17th Floor
                    New York, New York 10286
                    Attn: Evan Glass

        Telecopy:   (212) 809-9520
        Telephone:  (212) 635-6466	

THE NORTHERN TRUST COMPANY,
 individually and as Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    50 S. LaSalle Street
                    Chicago, Illinois 60675
                    Attn:  Richard W. Berger

        Telecopy:   (312) 557-2673
        Telephone:  (312) 444-5918	

BANK OF MONTREAL,
 individually and as Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    111 West Monroe Street
                    Suite 12 West
                    Chicago, Illinois 60603
                    Attn:  Randy J. Goodleaf

        Telecopy:   (312) 845-2196
        Telephone:  (312) 845-2035	

FLEET NATIONAL BANK,
 individually and as Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    100 Federal Street
                    Mail Code: MA DE 10010H
                    Boston, MA 02110
                    Attn:  Eugene G. Ardito

        Telecopy:   (617) 434-1096
        Telephone:  (617) 434-3311	

ROYAL BANK OF CANADA,
 individually and as Managing Agent

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    New York Branch
                    One Liberty Plaza
                    3rd Floor
                    New York, NY  10006-1404
                    Attn:   Manager, Loans
                    Administration

        Telecopy:   (416) 955-6720
        Telephone:  (416) 955-6679	

with a copy to:

Address:    New York Branch
            One Liberty Plaza
            3rd Floor
            New York, NY  10006-1404
            Attn:   Alexander Birr

Telecopy:   (212) 428-6201
Telephone:  (212) 428-6404	

THE BANK OF NOVA SCOTIA

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    181 W. Madison
                    Suite 3700
                    Chicago, IL 60602
                    Attn:  Lisa Garling

        Telecopy:   (312) 201-4108
        Telephone:  (312) 201-4135	

WELLS FARGO BANK, N.A.
By:

Print Name:

Title:

By:

Print Name:

Title:

        Address:    230 W. Monroe Street
                    Suite 2900
                    Chicago, IL 60606
                    Attn:  Robert C. Meyer

        Telecopy:   (312) 845-8606
        Telephone:  (312) 345-8623	

FIRSTAR BANK, N.A.

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    777 East Wisconsin Avenue
                    Milwaukee, Wisconsin 53202
                    Attn:  James Spredemann

        Telecopy:   (414) 765-5367
        Telephone:  (414) 765-6626	

THE FUJI BANK, LIMITED

By:
   -----------------------------------------

Print Name:
           ---------------------------------

Title:
      --------------------------------------

        Address:    227 West Monroe Street
                    Suite 2600
                    Chicago, IL 60606
                    Attn:  Peter L. Chinnici

        Telecopy:   (312) 621-0539
        Telephone:  (312) 621-0500	

STATE STREET BANK AND TRUST
COMPANY

 By:
    -----------------------------------------

 Print Name:
            ---------------------------------

 Title:
       --------------------------------------

         Address:    2 Avenue de Lafayette
                     Mail Code: LCC2
                     Boston, MA 02111
                     Attn: Lise Anne Boutiette

         Telecopy:   (617) 662-3778
         Telephone:  (617) 662-3262	

PRICING SCHEDULE	

====================================================================================================================================
                            LEVEL I         LEVEL II         LEVEL III        LEVEL IV         LEVEL V            LEVEL VI
                             STATUS          STATUS           STATUS           STATUS          STATUS              STATUS
------------------------------------------------------------------------------------------------------------------------------------
  BORROWER DEBT             AA-/Aa3           A+/A1            A/A2             A-/A3          BBB+/Baa1        LESS THAN BBB+/Baa1
     RATING
------------------------------------------------------------------------------------------------------------------------------------
   Applicable                .05%             .06%             .07%             .09%             .10%              .125%
Facility Fee Rate
------------------------------------------------------------------------------------------------------------------------------------
   Applicable
     Margin
------------------------------------------------------------------------------------------------------------------------------------
Eurodollar Rate              .15%             .19%             .23%             .285%            .40%              .50%
------------------------------------------------------------------------------------------------------------------------------------
Alternate Base                0.0              0.0              0.0              0.0              0.0               0.0
Rate
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Applicable                   .10%             .10%             .10%             .125%            .125%             .125%
Utilization Fee
Rate* (GREATER THAN 33%)
====================================================================================================================================	

Subject to the following two sentences, a particular Level Status shall exist on a particular day if on such day the Borrower does not qualify for a Level Status with more advantageous pricing and either the Moody's Rating or the S&P Rating is at least equal to the corresponding rating specified for such Level Status in the table above. In the event of a difference in the equivalent "rating level" from S&P and Moody's resulting in a split of only one level, then the Level Status shall be determined by reference to the higher of the two Ratings. In

* The Applicable Utilization Fee Rate shall be payable (i) on and after the Revolving Credit Termination Date, at all times and (ii) prior to the Revolving Credit Termination Date, only with respect to outstanding Advances on days when Utilization is greater than 33%. "Utilization" means, for any day, a percentage equal to the aggregate principal amount of Loans hereunder and "Loans" (as defined in the Three Year Agreement) outstanding on such day (and at the close of business on such day if a Business Day) divided by the sum on such day of the Aggregate Commitment and the "Aggregate Commitment" under the Three Year Agreement; PROVIDED that for purposes of computing the Utilization Fee (a) the Aggregate Commitment shall be deemed to in no event be less than the aggregate outstanding principal amount of the Loans and (b) the "Aggregate Commitment" (as defined in the Three Year Agreement) shall be deemed to in no event be less than the aggregate outstanding principal amount of the "Loans" (as defined in the Three Year Agreement). At all times on and after the Revolving Credit Termination Date the Applicable Utilization Fee Rate for each Level Status shall be in an amount .125% greater than the amount set forth for such Level Status in the above table.

the event of a difference in the equivalent "rating level" from S&P and Moody's resulting in a split of greater than one level, then the Level Status shall be that Level Status one below the Level Status determined by reference to the higher of the two Ratings. The above ratings are in the format of S&P Rating/Moody's Rating.
For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:
"Level Status" means either Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status.
"Moody's Rating" means, at any time, the Borrower Debt Rating issued by Moody's and then in effect.
"Rating" means Moody's Rating or S&P Rating.
"S&P Rating" means, at any time, the Borrower Debt Rating issued by S&P and then in effect.
The Applicable Margin and Applicable Facility Fee Rate shall be determined in accordance with the foregoing table based on the Borrower's Level Status as determined from its then-current Moody's and S&P Ratings. The Rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Borrower has no Moody's Rating or no S&P Rating or the Borrower does not qualify for a Level Status with more advantageous pricing, Level VI Status shall exist.
-2-

SCHEDULE 1
COMMITMENTS

                LENDER                           COMMITMENT
                ------                           ----------
Bank One, NA                                  $  50,000,000
ABN AMRO Bank N.V.                               45,000,000
Citibank, N.A.                                   45,000,000
First Union National Bank                        45,000,000
JP Morgan Chase Bank                             40,000,000
The Bank of New York                             37,500,000
The Northern Trust Company                       30,000,000
Bank of Montreal                                 25,000,000
Fleet National Bank                              25,000,000
Royal Bank of Canada                             25,000,000
The Bank of Nova Scotia                          17,500,000
Wells Fargo Bank, N.A.                           15,000,000
Firstar Bank, N.A.                               12,500,000
The Fuji Bank, Limited                           12,500,000
State Street Bank and Trust Company              12,500,000

TOTAL                                         $ 437,500,000
                                              =============	

EXHIBIT A
NOTE
[$______________] [Date]
Aon Corporation, a Delaware corporation (the "Borrower"), promises to pay to the order of ____________________________________ (the "Lender") the lesser of the principal sum of ______________________ Dollars or the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the main office of Bank One, NA in Chicago, Illinois, as Agent, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay the principal of and accrued and unpaid interest on the Loans in full on the Facility Termination Date and shall make such mandatory payments as are required to be made under the terms of Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the 364-Day Credit Agreement dated as of February 8, 2002 (which, as it may be amended or modified and in effect from time to time, is herein called the "Agreement"), among the Borrower, the lenders party thereto, including the Lender, and Bank One, NA, as Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement.
AON CORPORATION
By:
 Print Name:

Title:

A-1

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF AON CORPORATION,
DATED _________,

                             Principal                 Maturity                    Principal
                             Amount of                of Interest                   Amount               Unpaid
         Date                  Loan                     Period                       Paid                Balance
----------------------------------------------------------------------------------------------------------------	

EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain 364-Day Credit Agreement dated as of February 8, 2002 (as amended, modified, renewed or extended from time to time, the "Agreement") among the Borrower, the lenders party thereto and Bank One, NA, as Agent for the Lenders. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Unmatured Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this___ day of_____, 200_.
B-1

SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ______________, 200_ with Provisions of Section 6.17 of the Agreement
1. SECTION 6.17.1 - CONSOLIDATED NET WORTH

A.  Consolidated Net Worth                                       $_________

B.  Must be greater than $2,500,000,000 (or, at all times
    from and after the CSC Spin-Off, $2,000,000,000)	

Complies Does Not Comply
2. SECTION 6.17.2 - CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE

A.  Consolidated EBITDA
    (for four fiscal quarters ended_____, 200__)

    (i)       Consolidated Net Income                            $_________

    (ii)      Consolidated Interest Expense                      $_________

    (iii)     taxes                                              $_________

    (iv)      depreciation                                       $_________

    (v)       amortization                                       $_________

    (vi)      extraordinary losses                               $_________

    (vii)     extraordinary gains                                $_________

    (viii)    Sum of (i) through (vi) minus (vii)                $_________

B.  Consolidated Interest Expense
    (for four fiscal quarters ended______, 200__)                $_________

C.  Ratio of A to B                                ____to 1.0	

D. Permitted Ratio Greater than 4.0 to 1.0
Complies______ Does Not Comply___

EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between ______________________________________(the "Assignor") and ___________________________________ (the "Assignee") is dated as of __________________, 20____. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement (which, as it may be amended, modified, renewed or extended from time to time is herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor's rights and obligations under the Credit Agreement and the other Loan Documents, such that after giving effect to such assignment the Assignee shall have purchased pursuant to this Assignment Agreement the percentage interest specified in Item 3 of Schedule 1 of all outstanding rights and obligations under the Credit Agreement and the other Loan Documents relating to the facilities listed in Item 3 of Schedule 1. The aggregate Commitment (or Loans, if the applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the "Effective Date") shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by the Agent) after this Assignment Agreement, together with any consents required under the Credit Agreement, are delivered to the Agent. In no event will the Effective Date occur if the payments required to be made by the Assignee to the Assignor on the Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the Assignor and the Assignee. On and after the Effective Date, the Assignee shall be entitled to receive from the Agent all payments of principal, interest and fees with respect to the interest assigned hereby. The Assignee will promptly remit to the Assignor any interest on Loans and fees received from the Agent which relate to the portion of the Commitment or Loans assigned to the Assignee hereunder for periods prior to the Effective Date and not previously paid by the Assignee to the Assignor. In the event that either party hereto receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto.
C-1

5. RECORDATION FEE. The Assignor and Assignee each agree to pay one-half of the recordation fee required to be paid to the Agent in connection with this Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S LIABILITY. The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder, (ii) such interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is duly authorized. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Loan Document, including without limitation, documents granting the Assignor and the other Lenders a security interest in assets of the Borrower or any guarantor, (ii) any representation, warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of the Borrower or any guarantor, (iv) the performance of or compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of the property, books or records of the Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Loans or (vii) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information at it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) confirms that the execution and delivery of this Assignment Agreement by the Assignee is duly authorized, (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, (vi) agrees that its payment instructions and notice instructions are as set forth in the attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are "plan assets" as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the
-2-

Assignee's non-performance of the obligations assumed under this Assignment Agreement, and (ix) if applicable, attaches the forms prescribed by the Internal Revenue Service of the United States certifying that the Assignee is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until notice of a change is delivered) shall be the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be executed in counterparts. Transmission by facsimile of an executed counterpart of this Assignment Agreement shall be deemed to constitute due and sufficient delivery of such counterpart and such facsimile shall be deemed to be an original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have executed this Assignment Agreement by executing Schedule 1 hereto as of the date first above written.
-3-

SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: 364-Day Credit Agreement dated as of February 8, 2002 among Aon Corporation, Bank One, NA, as agent, and the lenders party thereto.
2. Date of Assignment Agreement: _____________, 200__
3. Amounts (As of Date of Item 2 above):

                                          Facility
                                             1*
                                          ________
     a.  Assignee's percentage
         of each Facility purchased
         under the Assignment
         Agreement                        ________%

     b.  Amount of
         each Facility
         purchased
         under the Assignment
         Agreement                        $_______

4.   Assignee's Commitment (or Loans
     with respect to terminated
     Commitments) purchased
     hereunder:                                   $_____________

5.   Proposed Effective Date:                     ___________________

6.   Non-standard Recordation Fee
     Arrangement (if applicable)

Accepted and Agreed:

[NAME OF ASSIGNOR]                   [NAME OF ASSIGNEE]

By:                                  By:
   ------------------------------       ----------------------------------------
Title:                               Title:
      ---------------------------          -------------------------------------

                                       -1-	

CONSENTED TO BY                      CONSENTED TO BY
AON CORPORATION                      BANK ONE, NA

By:                                  By:
   ------------------------------       ----------------------------------------
Title:                               Title:
      ---------------------------          -------------------------------------	

* Insert specific facility names per Credit Agreement ** Percentage taken to 10 decimal places *** If fee is split 50-50, pick N/A as option **** Delete if not required by Credit Agreement
-2-

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must include notice addresses for the Assignor and the Assignee

(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:

Name:                                Telephone No.:
     ------------------------------                -----------------------------
Fax No.:                             Telex No.:
        ---------------------------            ---------------------------------	

Answerback:
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

ADDRESS FOR NOTICES FOR ASSIGNOR:

ASSIGNEE INFORMATION
CREDIT CONTACT:

Name:                                    Telephone No.:
     --------------------------------                  -------------------------
Fax No.:                                 Telex No.:
        -----------------------------              -----------------------------	

Answerback:
KEY OPERATIONS CONTACTS:

Booking Installation:                    Booking Installation:
                     ----------------                         ------------------
Name:                                    Name:
     --------------------------------         ----------------------------------

Telephone No.:                           Telephone No.:
              -----------------------                  -------------------------
Fax No.:                                 Fax No.:
        -----------------------------            -------------------------------
Telex No.:                               Telex No.:
          ---------------------------              -----------------------------
Answerback:                              Answerback:
           --------------------------               ----------------------------	

-1-

PAYMENT INFORMATION:
Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

ADDRESS FOR NOTICES FOR ASSIGNOR:

BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.

INITIAL FUNDING CONTACT:                  SUBSEQUENT OPERATIONS CONTACT:

Name:                                     Name:
     -------------------------                 ---------------------------------
Telephone No.: (312)                      Telephone No.: (312)
Fax No.: (312)                            Fax No.: (312)
                               Bank One Telex No.: 190201  (Answerback: FNBC UT)	

INITIAL FUNDING STANDARDS:
Libor - Fund 2 days after rates are set.

BANK ONE WIRE INSTRUCTIONS:       Bank One, NA, ABA # 071000013
                                  LS2 Incoming Account # 481152860000
                                  Ref:________________

ADDRESS FOR NOTICES FOR BANK ONE: 1 Bank One Plaza, Chicago, IL  60670
                                  Attn: Agency Compliance Division, Suite
                                  IL1-0353
                                  Fax No. (312) 732-2038 or (312) 732-4339	

-2-

EXHIBIT D
COMMITMENT ADDITION AGREEMENT
This Commitment Addition Agreement (this "Agreement") is made and entered into as of the ___ day of ________, 200__ by and among Aon Corporation (the "Borrower"), Bank One, NA, as agent (the "Agent"), and _______________________ (the "Supplemental Lender").
RECITALS
A. The Borrower, the Agent and various financial institutions are party to that certain 364-Day Credit Agreement dated as of February 8, 2002 (the "Credit Agreement") pursuant to which the "Aggregate Commitment" is $437,500,000. Terms used but not otherwise defined herein have the meaning ascribed to them by the Credit Agreement.
B. Acting pursuant to Section 2.5(b) of the Credit Agreement, the Borrower has elected to increase the Aggregate Commitment by $_______________ to $______________ and has given prior notice of such fact to the Agent.
C. The Supplemental Lender wishes to [become a Lender under the Credit Agreement with a Commitment of $________________] [increase its Commitment under the Credit Agreement from $___________ to $___________].
D. [As of the date hereof there are no extensions of credit outstanding under the Credit Agreement.]
NOW THEREFORE, the Agent, the Borrower and the Supplemental Lender agree as follows:
1. The Supplemental Lender hereby [joins the Credit Agreement as a Lender thereunder having a Commitment of $________________ and having all the obligations and rights of a Lender thereunder as if an original party thereto]
[agrees that its Commitment under the Credit Agreement shall be increased to $_______________].
2. Each of the Agent and the Borrower consents to the foregoing additional Commitment [and joinder].
3. The parties acknowledge that, pursuant to Section 8.2--the amendment provision of the Credit Agreement, by virtue of this Agreement, the Credit Agreement is deemed amended without further action by any party to reflect the Supplemental Lender as a Lender thereunder with a Commitment of $___________________.
-3-

4. [Contemporaneously herewith, the Supplemental Lender is entering into an Assignment Agreement with each of the existing Lenders pursuant to which there is being assigned to the Supplemental Lender a ratable portion of the outstanding Advances as required by Section 2.5(b)--the accordion section of the Credit Agreement.] [INCLUDE ONLY WHEN THERE ARE OUTSTANDING LOANS]
5. This Agreement may be executed in many number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.
6. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
IN WITNESS WHEREOF, the parties have entered into this Agreement by their duly authorized representatives as of the date first written above.
AON CORPORATION
By:

Its:
BANK ONE, NA, as Agent
By:

Its:
[SUPPLEMENTAL LENDER]
By:

Its:

-4-

EXHIBIT 10(z)
CONFORMED COPY
CREDIT AGREEMENT
relating to
(i) a multicurrency revolving loan facility of EURO 250,000,000; and
(ii) a 364 days facility of EURO 250,000,000
dated 24 September 2001
AON CORPORATION
as GUARANTOR
and
AON FINANCE LIMITED
AON FRANCE S.A.
AON GROEP NEDERLAND B.V.
AON HOLDINGS B.V.
AON JAUCH & HUBENER HOLDINGS GmbH
AS BORROWERS
and
THE LENDERS
and
CITIBANK INTERNATIONAL plc
AS AGENT
and
SALOMON BROTHERS INTERNATIONAL LIMITED
AS ARRANGER
[LINKLATERS & ALLIANCE LOGO]
LINKLATERS
Ref: PHPS/RICH

TABLE OF CONTENTS

CLAUSE                                                                      PAGE
1      DEFINITIONS AND INTERPRETATION..........................................1

2      FACILITIES.............................................................13

3      PURPOSE................................................................15

4      CONDITIONS PRECEDENT...................................................15

5      REVOLVING CREDIT FACILITY AND 364 DAY FACILITY.........................15

6      ALTERNATIVE CURRENCIES.................................................17

7      INTEREST...............................................................18

8      REPAYMENT, PREPAYMENT, CANCELLATION AND EXTENSION......................21

9      CHANGES IN CIRCUMSTANCES...............................................23

10     PAYMENTS...............................................................26

11     GUARANTEE..............................................................30

12     REPRESENTATIONS AND WARRANTIES.........................................33

13     UNDERTAKINGS...........................................................38

14     FINANCIAL UNDERTAKINGS.................................................42

15     DEFAULT................................................................43

16     SET-OFF................................................................46

17     PRO RATA SHARING.......................................................46

18     THE ARRANGER, THE AGENT AND THE LENDERS................................47

19     FEES AND EXPENSES......................................................51

20     AMENDMENTS AND WAIVERS.................................................53

21     MISCELLANEOUS..........................................................55

22     NOTICES................................................................55

23     ASSIGNMENTS AND TRANSFERS..............................................57	

- i -

24     INDEMNITIES............................................................59

25     LAW AND JURISDICTION...................................................60

SCHEDULE 1 THE LENDERS........................................................62

SCHEDULE 2 CONDITIONS PRECEDENT...............................................63

SCHEDULE 3 DRAWDOWN NOTICE....................................................65

SCHEDULE 4 MANDATORY COST RATE................................................66

SCHEDULE 5 FORM OF TRANSFER CERTIFICATE.......................................68

SCHEDULE 6 FORM OF DEED OF ACCESSION..........................................71	

- ii -

THIS AGREEMENT is made on 24 September 2001
BY:
(1) AON CORPORATION, a company incorporated in the State of Delaware of 123 North Wacker Drive, Chicago, Illinois 60606, USA (the "GUARANTOR");
(2) AON FINANCE LIMITED, a company incorporated in England and Wales with registered number 000777539 ("AON UK");
(3) AON FRANCE S.A., a company incorporated in France with registered number 682019377 RCS NANTERRE ("AON FRANCE");
(4) AON GROEP NEDERLAND B.V., a company incorporated in The Netherlands with a corporate seat in Rotterdam ("AON GROEP");
(5) AON HOLDINGS B.V., a company incorporated in The Netherlands with a corporate seat in Rotterdam ("AON HOLDINGS");
(6) AON JAUCH & HUBENER HOLDINGS GmbH, a company incorporated in Germany with registered number 54969 ("AON DEUTSCHLAND");
(7) THE LENDERS listed in Schedule 1 (the "LENDERS");
(8) CITIBANK INTERNATIONAL PLC of 336 Strand, London, WC2R 1HB as the Agent (as that term is more particularly defined below); and
(9) SALOMON BROTHERS INTERNATIONAL LIMITED of Citigroup Centre, 33 Canada Square, Canary Wharf, London E14 5LB as Arranger of the facilities made available hereunder (the "ARRANGER").
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCOUNTS" means:
(a) in relation to the Guarantor, its audited consolidated statements of income, stockholders' equity and cash flows; and
(b) in relation to any other Obligor, its accounts which shall have been audited to the extent required by the law of the jurisdiction of incorporation of such Obligor.
"ACT" means the Companies Act 1985.
"ADVANCE" means a Revolving Advance or a 364 Day Advance.
"AFFILIATE" means, in relation to a person, a Subsidiary or a holding company (as defined in Section 736 of the Act) of that person and any other Subsidiary of that holding company.
"AGENT" means Citibank International plc in its capacity as agent and trustee for the Lenders and each successor Agent appointed under Clause
18.12 (REMOVAL AND RESIGNATION OF THE AGENT).
"AGREED JURISDICTION" means England and Wales, France, The Netherlands and Germany.
- 1 -

"ALTERNATIVE CURRENCY" means Sterling, Dollars or any other currency (other than euros) which is freely convertible into euros, freely transferable and readily available in the London interbank market.
"AVAILABLE REVOLVING CREDIT COMMITMENT" means, in relation to a Lender, its Revolving Credit Commitment less the Original Euro Amount of its Participations in the Revolving Advances.
"AVAILABLE REVOLVING CREDIT FACILITY" means the aggregate of the Available Revolving Credit Commitments of the Lenders.
"AVAILABLE 364 DAY FACILITY" means the aggregate of the Available 364 Day Commitments of the Lenders.
"AVAILABLE 364 DAY COMMITMENT" means, in relation to a Lender, its 364 Day Commitment less the Original Euro Amount of its Participations in all 364 Day Advances.
"BORROWERS" means AON UK, AON France, AON Groep, AON Holdings, AON Deutschland, and any other Group Company that becomes a party to this Agreement pursuant to Clause 2.4 (ADDITIONAL Borrowers) and "BORROWER" shall be construed accordingly.
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general interbank business in London and:
(a) in relation to a transaction involving an Alternative Currency, the principal financial centre of the country of that Alternative Currency; and
(b) in relation to a transaction which relates to a payment or rate fixing in euros or other matter relating to euros means a day on which the Trans-European Automated Real-time Gross settlement Express Transfer System (TARGET) is operating.
"CERTIFIED COPY" means, in relation to a document, a copy of that document bearing the endorsement, or a certificate attached to that document bearing the endorsement "Certified a true, complete and accurate copy of the original, which has not been amended [otherwise than by a document, a Certified Copy of which is attached hereto]", which has been signed and dated by a duly authorised officer of the relevant company and which complies with that endorsement.
"CHANGE" means the introduction, implementation, repeal, withdrawal or change in, or in the interpretation or application of, (a) any law, regulation, practice or concession, or (b) any directive, requirement, request or guidance (whether or not having the force of law but if not having the force of law, one which applies generally to a class or category of financial institutions of which that Lender (or that company) forms part and compliance with which is in accordance with the general practice of those financial institutions) of the European Community, any central bank or any other fiscal, monetary, regulatory or other similar authority.
"CHANGE OF CONTROL" means where a person (whether alone or together with any associated person or persons) becomes a beneficial owner of shares in the issued share capital of the Guarantor carrying the right to exercise more than 50 per cent. of the votes exercisable at a general meeting of the Guarantor (for the purposes of this definition, "ASSOCIATED PERSON" means, in relation to any person, a person who is
(i) "ACTING IN CONCERT" (as defined in the City Code on Takeovers and Mergers) with that person or (ii) a
- 2 -

"CONNECTED PERSON" (as defined in Section 839 of the Income and Corporation Taxes Act 1988) of that person).
"CODE" means the US Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
"COMMITMENT" means, in relation to a Lender, the aggregate of its Revolving Credit Commitment and its 364 Day Commitment.
"CONSOLIDATED INTEREST EXPENSE" means ,in relation to a Relevant Period, the consolidated net interest expense and any other finance charges of the Group (for the avoidance of doubt, this definition shall be construed so as to be consistent with US GAAP).
"CONTROLLED GROUP" means all members of a controlled group of corporations and all trades of businesses (whether or not incorporated) under common control which, together with the Group Companies, are treated as a single employer under Section 414 of the Code and the regulations thereunder.
"CROSS DEFAULT PROVISION" means a contractual right to demand or accelerate repayment of any Indebtedness of all or any of the Group Companies or to withdraw any commitment to provide finance to all or any of the Group Companies on the occurrence of any event which would entitle any other creditor or creditors of all or any of the Group Companies to demand or accelerate repayment of any Indebtedness of all or any of the Group Companies other than in respect of any mandatory prepayment triggered by a Change of Control or to withdraw any commitment to provide finance (other than where such right arises due to illegality or increased costs) to all or any of the Group Companies (whether or not such other creditor or creditors do so demand, accelerate or withdraw).
"CSC" means Combined Specialty Corporation, the new subsidiary to be formed by the Guarantor for the purposes of the Demerger.
"CSC GROUP" means CSC and each of CSC's Subsidiaries.
"CSC SPIN-OFF" means the distribution of common stock in CSC as a tax-free dividend to the current holders of the Guarantor's common stock.
"DANGEROUS MATERIALS" means any element or substance, whether consisting of gas, liquid, solid or vapour, identified by any Environmental Law to be, to have been, or to be capable of being or becoming, harmful to mankind or any living organism or damaging to the Environment.
"DEBT RATING LEVEL" means the Guarantor's senior unsecured long term debt rating by S&P and/or Moody's.
"DEED OF ACCESSION" means a deed substantially in the form set out in 
Schedule 6 (FORM OF DEED OF ACCESSION).
"DEFAULT" means any event specified as such in Clause 15.1 (DEFAULT).
"DEFAULT NOTICE" has the meaning given to that term in Clause 15.2 (ACCELERATION).
"DEMERGER" means the demerging of the general insurance underwriting business of the Guarantor to form the CSC Group to be effected on the basis set out in the public documents to be issued to the holders of the Guarantor's common stock, including (1) the CSC Spin-Off and (2) the Facilitating Transactions.
- 3 -

"DOLLARS" and "$" mean the lawful currency for the time being of US.
"DORMANT SUBSIDIARY" means, on any given date, a Group Company (a) which has been dormant within the meaning of section 250(3) of the Act for the period of 12 months ending on that date and (b) the value of whose assets do not exceed in aggregate L5,000 (or an equivalent amount in any relevant currency).
"DRAWDOWN DATE" means the date on which an Advance is made, or is proposed to be made.
"DRAWDOWN NOTICE" means a notice substantially in the form set out in Schedule 3.
"EBITDA" means, in relation to a Relevant Period, the consolidated net profit of the Group before interest expenses and tax plus any amounts provided for depreciation and amortisation.
"ENCUMBRANCE" means any mortgage, charge, assignment by way of security, pledge, hypothecation, lien, right of set-off, retention of title provision, trust or flawed asset arrangement (for the purpose of, or which has the effect of, granting security) or any other security interest of any kind whatsoever.
"ENVIRONMENT" means all or any of the following media: air (including air within buildings or other structures and whether above or below ground); land (including buildings and any other structures or erections in, on or under it and any soil and anything below the surface of land); land covered with water; and water (including sea, ground and surface water).
"ENVIRONMENTAL LAW" means any statutory or common law, treaty, convention, directive or regulation having legal or judicial effect whether of a criminal or civil nature, concerning:
(a) pollution or contamination of the Environment;
(b) harm, whether actual or potential, to mankind and human senses, living organisms and ecological systems;
(c) the generation, manufacture, processing, distribution, use (including abuse), treatment, storage, disposal, transport or handling of Dangerous Materials; or
(d) the emission, leak, release or discharge into the Environment of noise, vibration, dust, fumes, gas, odours, smoke, steam, effluvia, heat, light, radiation (of any kind), infection, electricity or any Dangerous Material and any matter or thing capable of constituting a nuisance or an actionable tort of any kind in respect of such matters.
"ERISA" means the US Employee Retirement Income Security Act of 1974, as amended from time to time.
"EURO", "EUROS" or "EURO" means the single currency of Participating Member States.
"EURO EQUIVALENT" means, in relation to an amount in an Alternative Currency on the day on which the calculation falls to be made, the amount of euros which could be purchased with that amount of the Alternative Currency using the Agent's spot rate of exchange for the purchase in the London foreign exchange market of euros with the Alternative Currency at or about 11.00 a.m. on the second Business Day before that date.
"EURIBOR" means, in relation to any Advance or other sum in euros and in respect of a particular Interest Period:
- 4 -

(a) the rate of the offered quotation for deposits in euros for a period comparable to that Interest Period determined by the Banking Federation of the European Union and as displayed on the appropriate page of the Telerate Service (or such other page or service as may replace it for the purpose of displaying offered rates of prime banks for deposits in euros) at or about 11.00 a.m. Brussels time on the second Business Day before the first day of that Interest Period; or
(b) if no such offered quotation appears on the Telerate Service, the arithmetic mean (rounded upwards to 4 decimal places) of the rates per annum (as quoted to the Agent at its request) at which each Reference Bank was offering deposits in euros in an amount comparable with that Advance or other sum, as the case may be, to leading banks in the European interbank market for a period equal to that Interest Period at or about 11.00 a.m. Brussels time on the second Business Day before the first day of that Interest Period.
"FACILITATING TRANSACTIONS" means all transactions to be entered into in connection with or for the purposes of the proposed internal restructuring of Group Companies in preparation for the CSC Spin-Off.
"FACILITIES" means the Revolving Credit Facility and the 364 Day Facility; and "FACILITY" shall be construed accordingly.
"FACILITY PERIOD" means the period starting on the date of this Agreement and ending on the date on which all the obligations and liabilities of the Obligors under the Financing Documents are discharged in full and the Agent and the Lenders have no continuing obligations in relation to the Facilities.
"FEE LETTER" means the letter dated 10 August 2001 from the Agent to the Guarantor relating to certain fees payable to the Agent and the Arranger by the Guarantor in relation to this Agreement, being described on its face as the "FEE LETTER".
"FINAL REPAYMENT DATE" means:
(a) in relation to the Revolving Credit Facility, the fifth anniversary of the date of this Agreement;
(b) subject to Clause 8.5 (CANCELLATION), in relation to the 364 Day Facility (other than Term Advances), the date falling 364 days from the date of this Agreement; and
(c) in relation to each Term Advance the first anniversary of the Drawdown Date of the relevant Term Advance.
"FINANCIAL YEAR" means the twelve month accounting period of the Guarantor in respect of which it prepares Accounts.
"FINANCING DOCUMENTS" means this Agreement and the Fee Letter and any other document designated as such by the Agent and the Guarantor.
"GAAP" means, in relation to a company, accounting principles, concepts, bases and policies generally adopted and accepted in the jurisdiction of its incorporation.
"GROUP" means the Guarantor and each of its Subsidiaries for the time being; and "GROUP COMPANY" means any one of them.
"GUARANTEED PARTIES" means all and each of the Lenders, the Agent and the Arranger.
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"INDEBTEDNESS" means, in relation to a person, its obligation (whether present or future, actual or contingent, as principal or surety) for the payment or repayment of money (whether in respect of interest, principal or otherwise) incurred in respect of, but without double counting:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility;
(c) any bond, note, loan stock, debenture or similar instrument;
(d) any, bill discounting, note purchase, factoring or documentary credit facility;
(e) any hire purchase agreement, conditional sale agreement or lease, which would be treated as a capital or finance lease in accordance with GAAP;
(f) any guarantee, bond, stand-by letter of credit or other similar instrument issued in connection with the performance of contracts;
(g) any interest rate or currency swap agreement or any other hedging or derivatives instrument or agreement which for the purpose of Clause 15.1.7 (CROSS DEFAULT) only shall be the net amount in respect of the same;
(h) any arrangement entered into primarily as a method of raising finance pursuant to which any asset sold or otherwise disposed of by that person is or may be leased to or re-acquired by a Group Company (whether following the exercise of an option or otherwise); or
(i) any guarantee, indemnity or similar insurance against financial loss given in respect of the obligation of any person falling within paragraphs (a) to (g) above inclusive,
but shall not include moneys which are for the time being owing by any Group Company to any other Group Company.
"INFORMATION MEMORANDUM" means the information memorandum dated 14 August 2001 and prepared by the Guarantor in connection with this Agreement.
"INTEREST PERIOD" means each period determined in accordance with Clause 7 (INTEREST) for the purpose of calculating interest on Advances or overdue amounts.
"LENDER TRANSFEREE" has the meaning given to that term in Clause 23.4.2.
"LENDERS" means the banks and financial institutions listed in Schedule
1 (THE LENDERS) their respective successors in title and any Lender Transferee.
"LENDING OFFICE" means the office or offices notified by a Lender to the Agent on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) at the office or offices through which that Lender's Commitment is maintained and through which its Participation is made and maintained under this Agreement.
"LEVEL 1" means a Debt Rating Level of "AA-" or better by S&P or "Aa3" or better by Moody's.
"LEVEL 2" means a Debt Rating Level of "A-" or better by S&P or "A3" or better by Moody's but excluding any rating which falls within Level 1.
- 6 -

"LEVEL 3" means a Debt Rating Level of less than "A-" by S&P or less than "A3" by Moody's.
"LIBOR" means, in respect of an Advance or other sum in a particular currency and in respect of a particular Interest Period:
(a) the rate of the offered quotation for deposits in that currency for a period comparable to that Interest Period which appears on the display designated as "Page 3750" or "Page 3740", as appropriate, on the Telerate Service (or such other page or service as may replace it for the purpose of displaying London interbank offered rates of prime banks for deposits in that currency) at or about 11.00 a.m. on the second Business Day before the first day of that Interest Period (or if that currency is Sterling, at or about 11.00 a.m. on the Drawdown Date);
(b) if no such offered quotation appears on "Page 3750" or "Page 3740", as appropriate, on the Telerate Service, the arithmetic mean (rounded upwards to 4 decimal places) of the rates per annum (as quoted to the Agent at its request) at which each Reference Bank was offering deposits in that currency in an amount comparable with that Advance or other sum, as the case may be, to leading banks in the London interbank market for a period equal to that Interest Period at or about 11.00 a.m. on the second Business Day before the first day of that Interest Period (or if that currency is Sterling, at or about 11.00 a.m. on the Drawdown Date).
"LONDON BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks are open for general interbank business in London.
"MAJORITY LENDERS" means a group of Lenders whose Commitments comprise at least 66 2/3 per cent. of the Total Commitments (taking no account, for the purposes of this definition, of the last sentence in Clause 15.2 (ACCELERATION)).
"MANDATORY COST RATE" means, in relation to a Lender, the rate determined in accordance with Schedule 4 (MANDATORY COST RATE) and expressed as a rate per cent. per annum.
"MARGIN" means the relevant percentage amount per annum as determined by the provisions set out in Clause 7.2 (MARGIN).
"MARGIN STOCK" has the meaning assigned to that term under Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on:
(a) the ability of the Guarantor to comply with its obligations under any Financing Document; or
(b) the business, assets, condition (financial or otherwise), performance, results of operations, or prospects of the Post-Demerger Group or, if the Guarantor has confirmed or it has notified the holders of Aon common stock or the US Securities and Exchange Commission that the Demerger is not to take place, the Group taken as a whole; or
(c) the validity or enforceability of the Financing Documents or the rights or remedies of the Agent or the Lenders thereunder.
"MOODY'S" means Moody's Investor Services, Inc., or any successor thereto.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Guarantor or any member of the
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Controlled Group is a party to which more than one employer is obligated to make contributions.
"NET WORTH" means at any date the consolidated stockholders' equity of the Guarantor and its consolidated Subsidiaries and which shall not include any gains or losses attributed to any foreign exchange transactions entered into by any Group Company (for the avoidance of doubt this definition shall be construed so as to be consistent with US GAAP).
"OBLIGORS" means all and each of the Guarantor and the Borrowers.
"ORIGINAL EURO AMOUNT" means:
(a) in relation to an Advance, or a Participation in an Advance, denominated in euros, the amount of that Advance or that Participation, as the case may be; and
(b) in relation to an Advance, or a Participation in an Advance, denominated in an Alternative Currency, the Euro Equivalent of the amount of that Advance or that Participation, as the case may be, calculated as at the Drawdown Date of that Advance,
provided that if all or part of that Advance is not made or is repaid or prepaid, the "Original Euro Amount" of that Advance and of the Participations of the Lenders in that Advance shall be correspondingly reduced.
"PARTICIPATING MEMBER STATE" means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union.
"PARTICIPATION" means, in relation to a Lender and an Advance, the part of that Advance made available or to be made available by that Lender and thereafter the part of that Advance owing to that Lender from time to time.
"PARTY" means a party to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.
"PERMITTED ENCUMBRANCE" means:
(a) any Encumbrance subsisting under or in connection with this Agreement;
(b) any right of set-off arising by operation of law or in the ordinary course of trading;
(c) any retention of title to goods supplied to a Group Company in the ordinary course of its trading activities;
(d) Encumbrances for taxes, assessments or governmental charges or levies on the assets of a Group Company if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP have been made;
(e) any lien arising by operation of law in the ordinary course of trading in respect of any obligation which is less than 60 days overdue or which is being contested in good faith and by appropriate means and for which adequate reserves have been made;
- 8 -

(f) Encumbrances arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;
(g) utility easements, building restrictions and such other Encumbrances or charges against real property as are of a nature generally existing with respect to properties of similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Group Companies;
(h) Encumbrances created by a Group Company over deposits and investments in the ordinary course of such Group Company's insurance and reinsurance trade to comply with the requirements of any regulatory body of insurance or insurance broking business;
(i) Encumbrances over and limited to the balance of credit balances on bank accounts of Group Companies created in order to facilitate the operation of such bank accounts and other bank accounts of such Group Companies on a net balance basis with credit balances and debit balances on the various accounts being netted off for interest purposes; and
(j) Encumbrances not otherwise permitted pursuant to paragraphs (a) to (h) above inclusive over assets having an aggregate value, and securing Indebtedness in an aggregate amount, not exceeding an amount equal to 10 per cent. of the Net Worth of the Guarantor (as shown in the Guarantor's most recent Accounts).
"PLAN" means an employee pension benefit plan, as defined in Section 3(2) of ERISA, as to which the Guarantor or any member of the Controlled Group may have any liability.
"POST DEMERGER GROUP" means the Guarantor and each of its Subsidiaries but excluding any member of the CSC Group;
"POTENTIAL DEFAULT" means an event or omission which, with the giving of any notice, the lapse of time or the satisfaction of any other condition in each case under Clause 15.1 (DEFAULT), would be a Default.
"QUALIFYING LENDER" means an institution which is a bank for the purposes of section 840 A of the Income and Corporation Taxes Act 1988.
"QUARTER DATE" means each 31 March, 30 June, 30 September and 31 December.
"REFERENCE BANKS" means the principal London offices of Citibank, N.A., The Royal Bank of Scotland plc and Lloyds TSB Bank plc or such other bank or banks as may be agreed between the Agent (acting on the instructions of the Majority Lenders) and the Guarantor.
"REGULATION "U" or "X" means, respectively, Regulation U or X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of the Board of Governors relating to, as the case may be, (i) reserve requirements applicable to depository institutions or
(ii) the extension of credit by persons other than banks, brokers and dealers or, by securities brokers and dealers or by banks or, as the case may be, by specified lenders, in each case for the purpose of purchasing or carrying margin stocks applicable to such persons.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event; provided that a
- 9 -

failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"RELEVANT PERIOD" means:
(a) each financial year of the Guarantor; and
(b) each period beginning on the first day of the second half of a financial year of the Guarantor and ending on the last day of the first half of its next financial year.
"RESERVATIONS" means the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court, the limitation of enforcement by-laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors, the time barring of claims under the Limitation Act 1980, the possibility that an undertaking to assume liability for or to indemnify against non-payment of United Kingdom stamp duty may be void, defences of set off or counterclaim and similar principles or any analogous general principles of law under the laws of any other jurisdictions in which relevant obligations have to be performed.
"REVOLVING ADVANCE" means an advance made or to be made to a Borrower under the Revolving Credit Facility or, as the case may be, the outstanding principal amount of any such advance.
"REVOLVING CREDIT COMMITMENT" means, in relation to a Lender, the principal amount described as such set opposite its name in Schedule 1 (THE LENDERS) or set out under the heading "Amount of Commitment Transferred" in the schedule to any relevant Transfer Certificate, in each case as reduced or cancelled in accordance with this Agreement.
"REVOLVING CREDIT COMMITMENT PERIOD" means the period starting on the date of this Agreement and ending on the date falling 1 month before the Final Repayment Date in relation to the Revolving Credit Facility.
"REVOLVING CREDIT FACILITY" means the multicurrency revolving loan facility referred to in Clause 2.1.1(a).
"REVOLVING CREDIT FACILITY LIMIT" means, subject to Clause 8.5 (CANCELLATION), EURO 250,000,000.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, or any successor thereto.
"SINGLE EMPLOYER PLAN" means a Plan subject to Title IV of ERISA maintained by the Guarantor or any member of the Controlled Group for employees of the Guarantor or any member of the Controlled Group, other than a Multiemployer Plan.
"STERLING" and "L" means the lawful currency for the time being of the United Kingdom.
"SUBSIDIARY" means a subsidiary within the meaning of section 736 of the Act.
"SUBSTANTIAL PORTION" assets which (a) represent more than 10 per cent. of the consolidated assets of the Group, as shown in the most recent quarterly consolidated management accounts of the Guarantor delivered to the Agent pursuant to Clause 13.1.2 (MANAGEMENT ACCOUNTS) preceding the date on which such determination is made, or (b)
- 10 -

are responsible for more than 10 per cent. of the consolidated net sales or of the net income of the Group for the 12 month period ending on the Quarter Date immediately preceding the date of determination as shown by the relevant quarterly consolidated management accounts delivered to the Agent pursuant to Clause 13.1.2 (MANAGEMENT ACCOUNTS).
"TAXES" includes all present and future taxes, charges, imposts, duties, levies, deductions, withholdings or fees of any kind whatsoever, or any amount payable on account of or as security for any of the foregoing, by whomsoever on whomsoever and wherever imposed, levied, collected, withheld or assessed, together with any penalties, additions, fines, surcharges or interest relating thereto; and "TAX" and "TAXATION" shall be construed accordingly.
"TERM ADVANCE" means an advance made or to be made to a Borrower under the 364 Day Facility which is to be repaid on the first anniversary of the Drawdown Date of such advance or, as the case may be, the outstanding principal amount of any such advance.
"TRANSITIONAL SERVICES" means the services to be provided by the Post-Demerger Group to the CSC Group, including but not limited to human resource administration services, IT and telecommunications support and services, payroll, salary and employee benefits services, tax, audit and accounting services, legal services, treasury services (cash investment, foreign exchange, derivatives and hedging), intellectual property licensing, premium financing services, claims administration services and benefits/brokerage consultancy and risk management services.
"364 DAY ADVANCE" means an advance made or to be made to a Borrower under the 364 Day Facility (which, for the avoidance of doubt, includes a Term Advance) or, as the case may be, the outstanding principal amount of any such advance.
"364 DAY COMMITMENT" means, in relation to a Lender, the principal amount described as such set opposite its name in Schedule 1 (THE LENDERS) or set out under the heading "Amount of Commitment Transferred" in the schedule to any relevant Transfer Certificate, in each case as reduced or cancelled in accordance with this Agreement.
"364 DAY COMMITMENT PERIOD" means the period starting on the date of this Agreement and ending on the date falling 364 days after the date of this Agreement.
"364 DAY FACILITY" means the 364 day facility referred to in Clause 2.1.1(ii).
"364 DAY FACILITY LIMIT" means, subject to Clause 8.5 (CANCELLATION), EURO 250,000,000.
"TERMINATION EVENT" means, with respect to a plan which is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Guarantor or any other member of the Controlled Group from such Plan during a plan year in which the Guarantor or any other member of the Controlled Group was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4062(e) of ERISA,
(c) the termination of such Plan, the filing of a notice of intent to terminate such Plan or the treatment of an amendment of such Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Plan or (e) any event or condition which might constitute grounds under Section 4042 or ERISA for the termination of or appointment of a trustee to administer, such Plan.
"TOTAL COMMITMENTS" means the aggregate of the Commitments of the Lenders.
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"TOTAL REVOLVING CREDIT COMMITMENTS" means the aggregate of the Lenders' Revolving Credit Commitments.
"TOTAL 364 DAY COMMITMENTS" means the aggregate of the Lenders' 364 Day Commitments.
"TRANSFER CERTIFICATE" means a document substantially in the form set out in Schedule 5 (FORM OF TRANSFER CERTIFICATE).
"UNFUNDED LIABILITY" means the amount (if any) by which the present value of all vested and unvested accrued benefits under a Single Employer Plan exceeds the fair market value of assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
"UK BORROWER" means a Borrower within the charge to UK corporation tax.
"US" means the United States of America.
"US LOAN AGREEMENT NUMBER 1" means the credit agreement dated 14 January 1997 as amended on 10 October 1997 among the Guarantor, certain lenders, certain co-agents and The First National Lender of Chicago as agent.
"US LOAN AGREEMENT NUMBER 2" means the $600,000,000 revolving credit agreement dated 8 October 1998 as amended and restated on 15 September 2000 among the Guarantor, certain lenders and the First National Bank of Chicago as arranger.
"VAT" means value added tax as provided for in the Value Added Tax Act 1994 and legislation (or purported legislation and whether delegated or otherwise) supplemental to that Act or in any primary or secondary legislation promulgated by the European Community or any official body or agency of the European Community, and any tax similar or equivalent to value added tax imposed by any country other than the United Kingdom and any similar or turnover Tax replacing or introduced in addition to any of the same.
"WHOLLY OWNED SUBSIDIARY" means a directly or indirectly wholly-owned subsidiary within the meaning of Section 736 of the Act.
1.2 HEADINGS
The headings in this Agreement are for convenience only and shall be ignored in construing this Agreement.
1.3 INTERPRETATION
In this Agreement (unless otherwise provided):

1.3.1    words importing the singular shall include the plural and vice
         versa;

1.3.2    references to Clauses and Schedules are to be construed as
         references to the clauses of, and schedules to, this Agreement;

1.3.3    references to any Financing Document or any other document
         shall be construed as references to that Financing Document or
         that other document, as amended, varied, novated or
         supplemented, as the case may be;

1.3.4    references to any statute or statutory provision include any
         statute or statutory provision which amends, extends,
         consolidates or replaces the same, or which has

                             - 12 -	

         been amended, extended, consolidated or replaced by the same,
         and shall include any orders, regulations, instruments or other
         subordinate legislation made under the relevant statute;

1.3.5    references to a document being "IN THE AGREED FORM" means that
         document the form and content of which has been approved by the
         Agent and the Guarantor and which has endorsed on it the words
         "IN THE AGREED FORM" and which is initialled by or on behalf of
         the Agent and the Guarantor;

1.3.6    references to "ASSETS" shall include revenues and the right to
         revenues and property and rights of every kind, present, future
         and contingent and whether tangible or intangible (including
         uncalled share capital);

1.3.7    the words "INCLUDING" and "IN PARTICULAR" shall be construed as
         being by way of illustration or emphasis only and shall not be
         construed as, nor shall they take effect as, limiting the
         generality of any foregoing words;

1.3.8    the words "OTHER" and "OTHERWISE" shall not be construed
         EJUSDEM GENERIS with any foregoing words where a wider
         construction is possible;

1.3.9    references to a "PERSON" shall be construed so as to include
         that person's assigns, transferees or successors in title and
         shall be construed as including references to an individual,
         firm, partnership, joint venture, company, corporation,
         unincorporated body of persons or any state or any agency of a
         state;

1.3.10   where there is a reference in this Agreement to any amount,
         limit or threshold specified in euro, in ascertaining whether
         or not that amount, limit or threshold has been attained,
         broken or achieved, as the case may be, a non-euro amount shall
         be counted on the basis of the Euro Equivalent at that time;

1.3.11   references to liability or liabilities are to be construed to
         include all liabilities and obligations whether actual,
         contingent, present or future and whether incurred solely or
         jointly; and

1.3.12   references to time are to London time.	

1.4 THIRD PARTY RIGHTS

1.4.1    Unless expressly provided to the contrary in a Financing
         Document, a person who is not a party to a Financing Document
         may not enforce any of its terms under the Contracts (Rights of
         Third Parties) Act 1999.

1.4.2    Notwithstanding any terms of any Financing Document, the
         consent of any third party is not required for any variation
         (including any release or compromise of any liability) under or
         termination of that Financing Document.	

2 FACILITIES
2.1 FACILITIES

2.1.1    Subject to the terms of this Agreement, the Lenders agree to
         make available to the Borrowers:

         (i)   a multicurrency revolving credit facility in the maximum
               principal amount of EURO 250,000,000; and

                             - 13 -	

         (ii)  a multicurrency revolving 364 day facility in the maximum
               principal amount of EURO 250,000,000 with an option to
               draw Term Advances.

2.1.2    Subject to Clause 8.2 (MANDATORY PREPAYMENT ON CHANGE OF
         CONTROL) but notwithstanding any other term of this Agreement:

         (i)   the Original Euro Amounts of all Revolving Advances shall
               not at any time exceed the Total Revolving Credit
               Commitments; and

         (ii)  the Original Euro Amounts of all 364 Day Advances shall
               not at any time exceed the Total 364 Day Commitments.	

2.2 OBLIGATIONS SEVERAL

2.2.1    The obligations of the Arranger, Agent and each Lender under
         this Agreement are several.

2.2.2    The failure of the Arranger, Agent or a Lender to carry out its
         obligations under this Agreement shall not relieve any other
         Party of any of its obligations under this Agreement.

2.2.3    None of the Lenders, the Arranger nor the Agent shall be
         responsible for the obligations of any other Party under this
         Agreement.

2.2.4    The obligations of each Borrower under this Agreement are
         several.

2.2.5    The failure of any Borrower to carry out its obligations under
         this Agreement shall not relieve any other Borrower of any of
         its obligations under this Agreement.

2.2.6    None of the Borrowers shall be responsible for the obligations
         of any other Borrower under this Agreement.	

2.3 RIGHTS SEVERAL

2.3.1    The rights of each Lender, the Arranger and the Agent and each
         Obligor under this Agreement are several. All amounts due, and
         obligations owed, to each of them are separate and independent
         debts or, as the case may be, obligations.

2.3.2    Each Lender, the Arranger and the Agent may, except as
         otherwise stated in this Agreement, separately enforce its
         rights under this Agreement.	

2.4 ADDITIONAL BORROWERS

        2.4.1    The Guarantor may, on giving notice to the Agent, nominate one
                 of its Wholly-Owned Subsidiaries as an additional Borrower
                 which is either:

                 (i)   incorporated in an Agreed Jurisdiction; or

                 (ii)  with the Agent's prior consent (acting on the
                       instructions of all of the Lenders) which is incorporated
                       outside an Agreed Jurisdiction.

        2.4.2    A Group Company wishing to become an additional Borrower shall
                 execute and deliver a Deed of Accession to the Agent together
                 with all the documents referred to in the schedule to that Deed
                 of Accession, each in form and substance satisfactory to the
                 Agent. On receiving such documents, the Agent shall execute the
                 relevant Deed of Accession.

                                     - 14 -	

        2.4.3    A Group Company shall accede to this Agreement as a Borrower on
                 the Agent counter-signing the relevant Deed of Accession.

        2.4.4    Each Party authorises the Agent to execute on its behalf a Deed
                 of Accession delivered to the Agent in accordance with the
                 terms of this Clause 2.4.

3       PURPOSE

3.1     PURPOSE	

Each Borrower shall use the proceeds of all Advances for its general corporate purposes or refinancing of existing Indebtedness.
3.2 NO MONITORING
Neither the Agent, the Arranger nor any Lender shall be obliged to investigate or monitor the use or application of the proceeds of the Advances.
4 CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement, none of the Agent and the Lenders shall be under any obligation to make the Facilities available to the Borrowers unless the Agent has notified the Guarantor and the Lenders that it has received all the documents listed in Schedule 2 (CONDITIONS PRECEDENT) (in form and content satisfactory to the Agent), which it shall do promptly on receipt of such satisfactory documentation.
5 REVOLVING CREDIT FACILITY AND 364 DAY FACILITY
5.1 UTILISATION OF REVOLVING CREDIT FACILITY AND 364 DAY FACILITY

5.1.1    Subject to the other terms of this Agreement, Revolving
         Advances shall be made to any Borrower at any time during the
         Revolving Credit Commitment Period when requested by that
         Borrower by means of a Drawdown Notice in accordance with this
         Clause 5. At the close of business on the last day of the
         Revolving Credit Commitment Period, the Revolving Credit
         Facility shall cease to be available for utilisation.

5.1.2    Subject to the terms of this Agreement, 364 Day Advances
         (including, for the avoidance of doubt, Term Advances) shall be
         made to any Borrower at any time during the 364 Day Commitment
         Period when requested by that Borrower by means of a Drawdown
         Notice in accordance with this Clause 5.1 At the close of
         business on the last day of the 364 Day Commitment Period,
         subject to Clause 8.6 (EXTENSIONS TO 364 DAY COMMITMENT
         PERIOD), the 364 Day Facility shall cease to be available for
         utilisation.	

5.2 LIMITATIONS ON ADVANCES
The following limitations apply to Advances:

5.2.1    the Drawdown Date of a Revolving Advance or a 364 Day Advance
         shall be a Business Day falling before the end of the Revolving
         Credit Commitment Period or the 364 Day Commitment Period, as
         the case may be;

5.2.2    the principal amount of an Advance denominated in euros shall	

be:
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(i) a minimum amount of EURO 10,000,000 and an integral

               multiple of EURO 1,000,000; or

         (ii)  the amount of the Available Revolving Credit Facility or
               the Available 364 Day Facility, as the case may be;

5.2.3    the principal amount of an Advance denominated in an
         Alternative Currency shall be:

         (i)   in an Original Euro Amount of at least EURO 10,000,000
               (and integral multiples of EURO 1,000,000) and a round
               amount in that currency as the Agent and the relevant
               Borrower may agree; or

         (ii)  in an Original Euro Amount equal to the Available
               Revolving Credit Facility or the Available 364 Day
               Facility, as the case may be;

5.2.4    no Revolving Advance shall be made if the making of that
         Revolving Advance would result in the Original Euro Amount of
         all Revolving Advances exceeding the Revolving Credit Facility
         Limit;

5.2.5    no 364 Day Advance shall be made if the making of that 364 Day
         Advance would result in the Original Euro Amount of all 364 Day
         Advances exceeding the 364 Day Facility Limit;

5.2.6    no more than 12 Advances may be outstanding at any one time;
         and

5.2.7    in the case of an Advance denominated in an Alternative
         Currency, the requirements of Clause 6 (ALTERNATIVE CURRENCIES)
         are met.	

5.3 CONDITIONS TO EACH ADVANCE

5.3.1    Subject to Clause 5.3.2, the obligation of each Lender to make
         available its Participation in an Advance is subject to the
         conditions that on the date on which the relevant Drawdown
         Notice is given and on the Drawdown Date:

         (i)   the representations and warranties in Clause 12
               (REPRESENTATIONS AND WARRANTIES) to be repeated on those
               dates are correct and will be correct immediately after
               the Advance is made; and

         (ii)  no Default or Potential Default has occurred and is
               continuing or would occur on the making of the Advance.

5.3.2    In respect of an Advance to be made for the sole purpose of
         repaying an outstanding Advance in a matching amount, the
         Advance shall be made, notwithstanding the occurrence and
         continuation of a Default or a Potential Default or any of the
         representations and warranties to be repeated not being
         correct, unless the Agent shall have served a Default Notice.	

5.4 DRAWDOWN NOTICE

5.4.1    Whenever a Borrower wishes to draw down an Advance, it shall
         give a duly completed Drawdown Notice to the Agent to be
         received not later than 12.00 noon on the third Business Day
         before the Drawdown Date (or in the case of an Advance to be
         denominated in Sterling, not later than 12.00 noon on the first
         Business Day before the Drawdown Date).

                             - 16 -	

5.4.2    A Drawdown Notice for an Advance to be denominated in euros may
         only be given on a London Business Day.

5.4.3    A Drawdown Notice shall be irrevocable and the relevant
         Borrower shall be obliged to borrow in accordance with its
         terms.	

5.5 NOTIFICATION TO LENDERS
The Agent shall promptly notify each Lender of the details of each Drawdown Notice received by it and the Original Euro Amount of the relevant requested Advance.
5.6 PARTICIPATIONS

5.6.1    Subject to the terms of this Agreement, each Lender acting
         through its Lending Office shall make available to the Agent on
         the Drawdown Date for an Advance an amount equal to its
         Participation in the amount and currency specified in the
         Drawdown Notice for that Advance.

5.6.2    For the purposes of Clause 5.6.1:

         (i)   the Participation of a Lender in a Revolving Advance
               shall be the proportion of that Revolving Advance equal
               to the proportion borne by that Lender's Available
               Revolving Credit Commitment to the Available Revolving
               Credit Facility on the Drawdown Date of that Revolving
               Advance; and

         (ii)  the Participation of a Lender in a 364 Day Advance shall
               be the proportion of that 364 Day Advance equal to the
               proportion borne by that Lender's Available 364 Day
               Commitment to the Available 364 Day Facility on the
               Drawdown Date of that 364 Day Advance.	

6 ALTERNATIVE CURRENCIES
6.1 REQUESTS FOR ALTERNATIVE CURRENCY
A Borrower may request in a Drawdown Notice that an Advance be denominated in an Alternative Currency.
6.2 NO ALTERNATIVE CURRENCY
If, no later than 10.00 a.m. on the second Business Day before, or in the case of an Advance to be denominated in Sterling no later than 10
a.m. on, the first day of an Interest Period in relation to an Advance which is proposed to be denominated in an Alternative Currency (other than, prior to the Commencement Date, Dollars), a Lender notifies the Agent that:

6.2.1    for whatever reason it is impracticable for that Lender to fund
         its Participation in that Advance in the proposed Alternative
         Currency in the ordinary course of business in the London
         interbank market; or

6.2.2    central bank or other governmental authorisation in the country
         of the proposed Alternative Currency is required to permit its
         use by that Lender for the making of that Advance and the
         authorisation has not been obtained or is not in full force and
         effect or is subject to unacceptable conditions; or

6.2.3    the use of the proposed Alternative Currency is restricted or
         prohibited by any request, directive, regulation or guideline
         of any governmental body, agency,

                             - 17 -	

         department or regulatory or other authority (whether or not
         having the force of law) in accordance with which that Lender
         is accustomed to act,	

the Agent shall notify the Guarantor and the Lenders by 11.00 a.m. on the same day. In this event, the Guarantor and the Lenders may agree that the Advance shall not be made, provided that in the absence of such agreement by 12.00 noon on the same day, that Lenders Participation in the Advance shall be denominated in euros, there shall be substituted in the definition of "EURIBOR" in Clause 1.1 (DEFINITIONS AND INTERPRETATION) for the time "11.00 a.m." the time "1.00 p.m.", and its participation shall be treated as a separate Advance during that Interest Period.
6.3 EXCHANGE RATE MOVEMENTS
In relation to each Term Advance drawn in an Alternative Currency, if on the date falling 6 months after the Drawdown Date of such Term Advance the Agent determines that the Euro Equivalent (calculated on that date) of that Term Advance exceeds the Original Euro Amount of that Term Advance by 5 per cent. or more, (all of such excess being hereafter referred to as the "EXCESS AMOUNT") the relevant Borrower shall, within 2 Business Days of receiving the Agent's demand so to do:

        6.3.1    pay to the credit of such blocked account or accounts as the
                 Agent shall stipulate, an amount equal to the Excess Amount; or

        6.3.2    repay an amount of the relevant Term Advance equal to the
                 Excess Amount.

7       INTEREST	

7.1 INTEREST RATE
Interest shall accrue on each Advance from and including the relevant Drawdown Date to but excluding the date the Advance is repaid at the rate determined by the Agent to be the aggregate of:

        7.1.1    the Margin;

        7.1.2    LIBOR or, in relation to any Advance in euro, EURIBOR; and

        7.1.3    the Mandatory Cost Rate.

7.2     MARGIN	

The Margin shall, on any day, in relation to:
(i) the Revolving Credit Facility be the percentage amount per annum set out in Column B below; and
(ii) the 364 Day Facility be the percentage amount per annum set out in Column C below,
in each case, opposite the Debt Rating Level at the opening of business in London on that day set out in Column A below:

                               COLUMN B                        COLUMN C
COLUMN A                       REVOLVING CREDIT FACILITY       364 DAY FACILITY
DEBT RATING LEVEL              MARGIN                          MARGIN
Level 1                        0.325                           0.275	

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                               COLUMN B                        COLUMN C
COLUMN A                       REVOLVING CREDIT FACILITY       364 DAY FACILITY
DEBT RATING LEVEL              MARGIN                          MARGIN
Level 2                        0.375                           0.325
Level 3                        0.525                           0.425	

provided that if on such day:
(i) the Debt Rating Level given by one of S&P or Moody's is Level 1 and by the other of S&P or Moody's is Level 2, Level 1 shall be the Debt Rating Level; or
(ii) the Debt Rating Level given by one of S&P or Moody's is Level 2 and by the other of S&P or Moody's is Level 3, Level 2 shall be the Debt Rating Level; or
(iii) the Debt Rating given by one of S&P or Moody's is Level 1 and by the other of S&P or Moody's is Level 3, Level 2 shall be the Debt Rating Level.
7.3 INTEREST PERIODS

7.3.1    Interest payable on each Advance shall be calculated by
         reference to Interest Periods of 1, 2, 3 or 6 months' duration
         (or such other Interest Period as the Agent, acting on the
         instructions of the Lenders, may allow).

7.3.2    The relevant Borrower shall select an Interest Period for an
         Advance in the relevant Drawdown Notice. In the case of any
         subsequent Interest Period for a Term Advance, the relevant
         Borrower may select an Interest Period for such Term Advance by
         notice received by the Agent on a London Business Day no later
         than 12:00 noon 3 Business Days before the commencement of that
         Interest Period.

7.3.3    In respect of Term Advances interest shall be calculated by
         reference to successive Interest Periods. The first Interest
         Period for a Term Advance shall begin on the Drawdown Date for
         that Term Advance. Each succeeding Interest Period for that
         Term Advance shall begin on the last day of the previous
         Interest Period.

7.3.4    If a Borrower fails to select an Interest Period for an Advance
         in accordance with Clause 7.3.2, that Interest Period shall,
         subject to the other provisions of this Clause 7, be one month.

7.3.5    If an Interest Period would otherwise end on a day which is not
         a Business Day, that Interest Period shall instead end on the
         next Business Day in the same calendar month (if there is one)
         or the preceding Business Day (if there is not).

7.3.6    If an Interest Period begins on the last Business Day in a
         calendar month or on a Business Day for which there is no
         numerically corresponding day in the calendar month in which
         that Interest Period is to end, it shall end on the last
         Business Day in that later calendar month.

7.3.7    If an Interest Period for an Advance would otherwise extend
         beyond the Final Repayment Date relating to the Facility under
         which such Advance is made, it shall be shortened so that it
         ends on that Final Repayment Date.	

- 19 -

7.4 DEFAULT INTEREST

7.4.1    If an Obligor fails to pay any amount payable under any
         Financing Document on the due date, it shall pay default
         interest on the overdue amount from the due date to the date of
         actual payment calculated by reference to successive Interest
         Periods (each of such duration as the Agent may select and the
         first beginning on the relevant due date) at the rate per annum
         being the aggregate of (a) 1 per cent. per annum, (b) the
         Margin, (c) LIBOR or, as the case may be, EURIBOR and (d) the
         Mandatory Cost Rate.

7.4.2    So long as the overdue amount remains unpaid, the default
         interest rate shall be recalculated in accordance with the
         provisions of this Clause 7.4 on the last day of each such
         Interest Period and any unpaid interest shall be compounded at
         the end of each Interest Period.	

7.5 CALCULATION AND PAYMENT OF INTEREST

7.5.1    At the beginning of each Interest Period, the Agent shall
         notify the Lenders and the relevant Borrower of the duration of
         the Interest Period and the rate and amount of interest payable
         for the Interest Period (but in the case of any default
         interest calculated under Clause 7.4 (DEFAULT INTEREST), any
         such notification need not be made more frequently than
         weekly). Each notification shall set out in reasonable detail
         the basis of computation of the amount of interest payable.

7.5.2    Interest due from a Borrower under this Agreement shall:

         (i)   accrue from day to day at the rate calculated under this
               Clause 7;

         (ii)  except as otherwise provided in this Agreement, be paid
               by the relevant Borrower to the Agent (for the account of
               the Lenders or the Agent, as the case may be) in arrear
               on the last day of each Interest Period, provided that
               for any Interest Period which is longer than 6 months,
               the relevant Borrower shall pay interest 6 monthly in
               arrear during that Interest Period;

         (iii) be calculated on the basis of the actual number of days
               elapsed and a 360 day year (or a 365 day year in the case
               of interest on an Advance denominated in Sterling) or, if
               different, such number of days as is market practice for
               the relevant currency; and

         (iv)  be payable both before and after judgment.	

7.6 AGENT'S DETERMINATION
The determination by the Agent of any interest payable under this Clause 7 shall be conclusive and binding on the Borrowers in the absence of manifest error.
7.7 TAUX EFFECTIF GLOBAL
In order to comply with the provisions of Articles L313-1 and L313-2 of the French consumer code ("CODE DE LA CONSOMMATION"), the effective global rate ("TAUX EFFECTIF GLOBAL") calculated in accordance with the articles referred to above is as set out in a letter dated the date of this Agreement from the Agent to Aon France S.A. in the form of Schedule
7 (FORM OF TEG LETTER).
- 20 -

8 REPAYMENT, PREPAYMENT, CANCELLATION AND EXTENSION
8.1 REPAYMENT
8.1.1 Subject to Clause 8.1.2, the relevant Borrower shall repay:
(i) each Advance (other than a Term Advance) in full on the

               last day of the Interest Period relating to that Advance;
               and

         (ii)  each Term Advance on the Final Repayment Date relating to
               that Term Advance.

8.1.2    If all or part of an existing Advance made to a Borrower is to
         be repaid from the proceeds of all or part of a new Advance
         denominated in the same currency as that existing Advance to be
         made to that Borrower, then as between each Lender and that
         Borrower, the amount to be repaid by that Borrower shall be set
         off against the amount to be advanced by that Lender in
         relation to the new Advance and the party to whom the smaller
         amount is to be paid shall pay to the other party a sum equal
         to the difference between the two amounts.	

8.2 MANDATORY PREPAYMENT ON CHANGE OF CONTROL

8.2.1    The Guarantor shall by a written notice (a "NOTICE") notify the
         Agent of a Change of Control no later than the date on which
         such Change of Control occurs and the Agent, upon receiving the
         Notice shall promptly notify the Lenders.

8.2.2    Within 30 days of the date of occurrence of any Change of
         Control, each Lender shall notify the Agent and the Guarantor
         whether or not it requires its Participation in all Advances
         (if any) to be prepaid and its Commitment to be cancelled. If a
         Lender so notifies the Agent and the Guarantor:

         (i)   as from the date of such notification that Lender's
               Commitment shall be cancelled; and

         (ii)  within 60 days of the date of occurrence of the Change of
               Control the aggregate Participations of that Lender in
               all Advances shall be repaid in full.

8.2.3    Any mandatory prepayment made under this Clause 8.2 shall be
         made together with accrued interest on the amount prepaid and
         any amounts payable under Clause 24.1 (BREAKAGE COSTS
         INDEMNITY).	

8.3 VOLUNTARY PREPAYMENT

8.3.1    Subject to Clause 8.3.3, any Borrower may, by giving not less
         than 10 Business Days' prior notice to the Agent, without
         premium or penalty prepay the whole or any part of any Advance
         (but if in part, in a minimum amount of EURO 10,000,000 and an
         integral multiple of EURO 5,000,000).

8.3.2    Any prepayment under this Clause 8.3 shall be made together
         with accrued interest on the amount prepaid and any amounts
         payable under Clause 24.1 (BREAKAGE COSTS INDEMNITY).

8.3.3    The Borrowers may not prepay all or part of any Advance except
         as expressly provided in this Agreement.	

- 21 -

8.4 RE-BORROWING OF ADVANCES

8.4.1    Subject to the terms of this Agreement, any amounts repaid
         under this Agreement (other than a Term Advance) may be
         re-borrowed.

8.4.2    Subject to Clauses 8.6.5 any amount repaid or prepaid in
         relation to a Term Advance may not be re-borrowed.	

8.5 CANCELLATION

8.5.1    The Guarantor may, by giving the Agent not less than 15
         Business Days' prior notice, cancel all or part of the
         Available Revolving Credit Facility or the Available 364 Day
         Facility, as the case may be, (but if in part, in a minimum
         amount of EURO 10,000,000 and an integral multiple of
         EURO 5,000,000).

8.5.2    Any notice of cancellation shall be irrevocable and shall
         specify the date on which the cancellation shall take effect
         and the amount of the cancellation. The Agent shall promptly
         notify the Lenders of receipt of any such notice.

8.5.3    The Borrowers may not borrow any part of a Facility which has
         been cancelled. Any cancellation shall reduce each Lender's
         Revolving Credit Commitment or 364 Day Commitment, as the case
         may be, rateably and shall reduce the Revolving Credit Facility
         Limit or the 364 Day Facility Limit, as the case may be, by the
         aggregate amount so cancelled.

8.5.4    The Borrowers may not cancel all or part of the Facilities
         except as expressly provided in this Agreement.	

8.6 EXTENSIONS TO 364 DAY COMMITMENT PERIOD

8.6.1    The Guarantor may at any time by notice to the Agent request an
         extension to the 364 Day Commitment Period, subject to the
         provisions of this Clause 8.6.

8.6.2    Upon receipt of any such request, the Lenders shall undertake a
         full credit assessment of the Obligors. None of the Lenders
         shall be under any legal or moral obligation to extend the 364
         Day Commitment Period. No extension shall be effective unless
         agreed in writing by the Agent acting on the instructions of
         all the Lenders.

8.6.3    If the Guarantor requests an extension during the final sixty
         days of the 364 Day Commitment Period, each of the Lenders
         shall, at its absolute discretion, have the option:

         (i)   subject to Clause 8.6.2, to extend the 364 Day Commitment
               Period for a further period of 364 days from the date on
               which the 364 Day Commitment Period is then due to
               expire; or

         (ii)  to decline such request.

8.6.4    If the Guarantor requests an extension otherwise than in
         accordance with Clause 8.6.3, each of the Lenders shall, at its
         absolute discretion, have the option:

         (i)   subject to Clause 8.6.2 and to the agreement of all of
               the Lenders to extend the 364 Day Commitment Period for a
               further period of 364 days from the date on which the
               Agent gives written notice to the Guarantor of the
               Lenders' agreement, to extend the 364 Day Commitment
               Period; or

                             - 22 -	

         (ii)  to decline such request, in which event, each Lender may,
               at or after the time of such request, immediately cancel
               the undrawn portion of its 364 Day Commitment.

8.6.5    If the Lenders agree to extend the 364 Day Commitment Period
         pursuant to this Clause 8.6, any amount in relation to a Term
         Advance repayable during such extended period may be redrawn as
         a 364 Day Advance prior to the expiry of such extended period.	

9 CHANGES IN CIRCUMSTANCES
9.1 ILLEGALITY
If, after the date of this Agreement, it becomes illegal for a Lender to maintain its Commitment or to continue to make available or fund its Participation in any Advance, then that Lender shall notify the Agent and the Guarantor and, upon it becoming so illegal:

9.1.1    the Commitment of that Lender shall be cancelled immediately;
         and

9.1.2    the Borrowers shall prepay to the Agent (for the account of
         that Lender) that Lender's Participation in all Advances
         (together with accrued interest on the amount prepaid and all
         other amounts owing to that Lender under this Agreement) within
         10 Business Days of demand by that Lender (or, if permitted by
         the relevant law, on the last day of the Interest Period of the
         relevant Advances).	

Any such prepayment under paragraph 9.1.2 above shall not be subject to 
Clause 24.1 (BREAKAGE COSTS INDEMNITY).
9.2 INCREASED COSTS

9.2.1    If, after the date of this Agreement, a Change occurs which
         causes an Increased Cost (as defined in Clause 9.2.3) to a
         Lender (or any company of which that Lender is a Subsidiary)
         then each relevant Borrower shall pay (as additional interest)
         to the Agent (for the account of that Lender) within 5 Business
         Days of demand the amount of such Increased Cost.

9.2.2    Any demand made under Clause 9.2.1 shall be made by the
         relevant Lender through the Agent and shall set out in
         reasonable detail so far as is practicable the basis of
         computation of the Increased Cost.

9.2.3    In this Clause 9.2:

         "INCREASED COST" means any cost to, or reduction in the amount
         payable to, or reduction in the return on capital or regulatory
         capital achieved by, a Lender (or any company of which that
         Lender is a Subsidiary) to the extent that it arises, directly
         or indirectly, as a result of the Change and is attributable to
         the Commitment or Participation in any Advance of that Lender
         or the funding of that Lender's Participation in any Advance
         including:

         (i)   any Tax Liability (other than Tax on Overall Net Income)
               incurred by that Lender;

         (ii)  any changes in the basis or timing of Taxation of that
               Lender in relation to its Commitment or Participation in
               any Advance or to the funding of that

                             - 23 -	

               Lender's Participation in any Advance (other than Tax on
               Overall Net Income);

         (iii) the cost to that Lender (or any company of which that
               Lender is a Subsidiary) of complying with, or the
               reduction in the amount payable to or reduction in the
               return on capital or regulatory capital achieved by that
               Lender (or any company of which that Lender is a
               Subsidiary) as a result of complying with, any capital
               adequacy or similar requirements howsoever arising,
               including as a result of an increase in the amount of
               capital to be allocated to any Facility or of a change to
               the weighting of that Lender's Commitment or
               Participation in any Advance; and

         (iv)  the cost to that Lender of complying with any reserve,
               cash ratio, special deposit or liquidity requirements (or
               any other similar requirements).

         "TAX LIABILITY" means, in respect of any person:

         (i)   any liability or any increase in the liability of that
               person to make any payment of or in respect of Tax;

         (ii)  the loss of any relief, allowance, deduction or credit in
               respect of Tax which would otherwise have been available
               to that person;

         (iii) the setting off against income, profits or gains or
               against any Tax liability of any relief, allowance,
               deduction or credit in respect of Tax which would
               otherwise have been available to that person; and

         (iv)  the loss or setting off against any Tax liability of a
               right to repayment of Tax which would otherwise have been
               available to that person.

         For the purposes of this definition of "Tax Liability", any
         question of whether or not any relief, allowance, deduction,
         credit or right to repayment of Tax has been lost or set off,
         and if so, the date on which that loss or set-off took place,
         shall be conclusively determined by the relevant person's
         auditors.

         "TAX ON OVERALL NET INCOME" means, in relation to a Lender, Tax
         (other than Tax deducted or withheld from any payment) imposed
         on the net profits of that Lender by the jurisdiction in which
         its Lending Office or its head office is situated.

9.2.4    A relevant Borrower shall not be obliged to make a payment in
         respect of an Increased Cost under this Clause 9.2:

         (i)   if and to the extent that the Increased Cost has been
               compensated for by the payment of an amount in respect of
               the Mandatory Cost Rate or the operation of Clause 10.9
               (GROSSING-UP) or which would have been compensated but
               for the operation of Clause 10.9.4; or

         (ii)  which is attributable to any breach by a Lender of any
               law or legally binding requirement of any central bank or
               other monetary, fiscal or other authority to which it is
               subject.

9.2.5    If any Borrower is required to pay any amount to a Lender under
         this Clause 9.2, then, without prejudice to that obligation and
         so long as the circumstances giving rise to the relevant
         Increased Cost are continuing and subject to the Guarantor
         giving the Agent and that Lender not less than 10 days' prior
         notice (which shall be irrevocable), the Borrowers may prepay
         all, but not part, of that Lender's

                             - 24 -	

         Participation in the Advances together with accrued interest on
         the amount prepaid. Any such prepayment shall be subject to
         Clause 24.1 (BREAKAGE COSTS INDEMNITY) On any such prepayment
         the Commitment of the relevant Lender shall be automatically
         cancelled.

9.2.6    A Lender intending to make a claim pursuant to this Clause 9.2
         shall notify the Agent of the event by reason of which it is
         entitled to do so setting out in reasonable detail the
         computation of such claim whereupon the Agent shall notify the
         Guarantor thereof provided that nothing herein shall require
         such Lender to disclose any confidential information relating
         to the funding of its obligations hereunder or generally.	

9.3 MARKET DISRUPTION
If, in relation to a proposed Advance and a particular Interest Period:

9.3.1    there is no relevant offered quotation on the Telerate Service
         as specified in paragraph (a) of the definition of "LIBOR" or
         "EURIBOR", as the case may be, in Clause 1.1 (DEFINITIONS AND
         INTERPRETATION), and the Agent determines that, because of
         circumstances affecting the London interbank market generally,
         reasonable and adequate means do not exist for ascertaining
         "LIBOR" or "EURIBOR", as the case may be, for that Advance for
         the relevant Interest Period; or

9.3.2    the Agent has been notified by close of business on the day
         LIBOR or EURIBOR, as the case may be, is determined, by a group
         of Lenders whose Commitments together exceed 50 per cent. of
         the Total Revolving Credit Commitments or, as the case may be,
         the Total 364 Day Commitments that in their opinion:

         (i)   matching deposits may not be available to them in the
               London interbank market in the ordinary course of
               business to fund their Participations in that Advance for
               that Interest Period; or

         (ii)  the cost to them of obtaining matching deposits in the
               London interbank market would be in excess of "LIBOR" or
               "EURIBOR", as the case may be, for the relevant Interest
               Period,	

the Agent shall promptly notify the Guarantor and the Lenders of that event and that Advance shall not be made. Instead, the Agent and the Guarantor shall immediately enter into negotiations for a period of not more than 30 days with a view to agreeing a substitute basis for calculating the interest rate for the Advance or for funding the Advance (whether in euros or another currency). Any substitute basis agreed by the Agent (with the consent of all the Lenders) and the Guarantor shall take effect in accordance with its terms and be binding on all the Parties.
9.4 MITIGATION

9.4.1    If any circumstances exist or arise in respect of any Lender or
         the Agent (including, for the avoidance of doubt, a Lender
         ceasing to be a Qualifying Lender) which would, or upon the
         giving of notice would, result in the operation of Clause 9.1
         (ILLEGALITY), 9.2 (INCREASED COSTS), 9.3 (MARKET DISRUPTION) or
         10.9 (GROSSING-UP) to the detriment of any Borrower, then that	

Lender or, as the case may be, the Agent shall:
- 25 -

(i) promptly upon becoming aware of those circumstances and

               their results, notify the Agent (in the case of a Lender)
               and the Guarantor; and

         (ii)  in consultation with the Agent (in the case of a Lender)
               and the Guarantor, take reasonable steps to mitigate the
               effects of those circumstances (including changing its
               Lending Office or consulting with the Guarantor with a
               view to transferring some or all of its rights and
               obligations under this Agreement to another bank or other
               financial institution acceptable to the Guarantor or
               producing or filing any claim, notification or
               information as may reasonably be required in order to
               establish the availability of any exemption or
               entitlement to refund in respect of the circumstances in
               question) in a manner which will avoid the circumstances
               in question and on terms acceptable to the Agent, the
               Guarantor and as the case may require, that Lender,

         provided that no Lender or the Agent shall be obliged to take
         any steps which in its opinion would have an adverse effect on
         its business or financial condition or the management of its
         Tax affairs or cause it to incur any material costs or
         expenses.

9.4.2    Nothing in this Clause 9.4 shall limit, reduce, affect or
         otherwise qualify the rights of any Lender or the obligations
         of the Guarantor under Clauses 9.1 (ILLEGALITY), 9.2 (INCREASED
         COSTS), 9.3 (MARKET DISRUPTION) and 10.9 (GROSSING-UP).	

9.5 CERTIFICATES

        The certificate or notification of the Agent or, as the case may be, the
        relevant Lender as to any of the matters referred to in this Clause 9
        shall be in reasonable detail and shall be conclusive and binding on the
        Borrowers except for any manifest error.

10      PAYMENTS

10.1    PLACE AND TIME

        All payments by the Obligors or a Lender under this Agreement shall be
        made to the Agent to its account at such office or bank in the principal
        financial centre of the country of the currency concerned (or, in the
        case of euros, London) at such time as the Agent may notify to the
        Obligors or the Lenders for this purpose.

10.2    FUNDS

        All payments to the Agent under this Agreement shall be made for value
        on the due date in freely transferable and readily available funds.

10.3    DISTRIBUTION

        10.3.1   Each payment received by the Agent under this Agreement for
                 another Party shall, subject to Clauses 10.3.2 and 10.3.3, be
                 made available by the Agent to that Party by payment (on the
                 date and in the currency and funds of receipt) to its account
                 with such office or bank in the principal financial centre of
                 the country of the relevant currency (or, in the case of euros,
                 in the principal financial centre of such of the Participating
                 Member States or London as the Agent may reasonably specify) as
                 it may notify to the Agent for this purpose by not less than 5
                 London Business Days' prior notice.	

- 26 -

        10.3.2   The Agent may apply any amount received by it for a Borrower in
                 or towards payment (on the date and in the currency and funds
                 of receipt) of any amount due from that Borrower under this
                 Agreement or in or towards the purchase of any amount of any
                 currency to be so applied.

        10.3.3   Where a sum is to be paid to the Agent under this Agreement for
                 another Party, the Agent is not obliged to pay that sum to that
                 Party until it has established that it has actually received
                 that sum. The Agent may, however, assume that the sum has been
                 paid to it in accordance with this Agreement, and, in reliance
                 on that assumption, make available to that Party a
                 corresponding amount. If the sum has not been made available
                 but the Agent has paid a corresponding amount to another Party,
                 that Party shall immediately on demand by the Agent refund the
                 corresponding amount together with interest on that amount from
                 the date of payment to the date of receipt, calculated at a
                 rate determined by the Agent to reflect its cost of funds.

        10.3.4   Notwithstanding the provisions of this Clause 10.3, the Agent
                 shall not be liable to any Obligor or any Lender for the
                 failure, or the consequences of any failure, of any euro
                 cross-border payment system to effect same-day settlement to an
                 account of any Obligor or any Lender.

10.4    BUSINESS DAYS

        If a payment under this Agreement is due on a day which is not a
        Business Day, the due date for that payment shall instead be the next
        Business Day in the same calendar month (if there is one) or the
        preceding Business Day (if there is not).

10.5    CURRENCY

        In this Agreement,

        10.5.1   all payments by a Borrower in respect of an Advance, whether of
                 interest or principal, shall be made in the currency (or the
                 denomination of the currency) in which that Advance is
                 denominated;

        10.5.2   all payments relating to costs, losses, expenses or Taxes shall
                 be made in the currency in which the relevant costs, losses,
                 expenses or Taxes were incurred; and

        10.5.3   any other amount payable under this Agreement shall, except as
                 otherwise provided, be made in euros.

10.6    ACCOUNTS AS EVIDENCE

        Each Lender shall maintain in accordance with its usual practice an
        account which shall, as between the Borrowers and that Lender, be PRIMA
        FACIE evidence of the amounts from time to time advanced by, owing to,
        paid and repaid to that Lender under this Agreement.

10.7    PARTIAL PAYMENTS

        10.7.1   If the Agent receives a payment from or on behalf of an Obligor
                 insufficient to discharge all the amounts then due and payable
                 by that Obligor under this Agreement, the Agent shall apply
                 that payment towards the obligations of that Obligor under this	

Agreement in the following order:
- 27 -

(i) first, in or towards payment of any unpaid costs and

                       expenses of the Agent under this Agreement;

                 (ii)  second, in or towards payment pro rata of any accrued
                       interest due by that Obligor but unpaid under this
                       Agreement;

                 (iii) third, in or towards payment pro rata of any principal
                       due by that Obligor but unpaid under this Agreement; and

                 (iv)  fourth, in or towards payment pro rata of any other sum
                       due by that Obligor but unpaid under the Financing
                       Documents.

        10.7.2   The Agent shall, if so directed by all the Lenders, vary the
                 order set out in Clauses 10.7.1(ii) to (iv).

        10.7.3   Clauses 10.7.1 and 10.7.2 shall override any appropriation made
                 by any Borrower.

10.8    SET-OFF AND COUNTERCLAIM

        All payments by any Obligor under this Agreement shall be made without
        set-off or counterclaim.

10.9    GROSSING-UP

        10.9.1   Subject to Clause 10.9.2, all sums payable to the Agent, the
                 Arranger, or any Lender pursuant to or in connection with any
                 Financing Document shall be paid in full free and clear of all
                 deductions or withholdings whatsoever except only as may be
                 required by law.

        10.9.2   If any deduction or withholding is required by law in respect
                 of any payment due from an Obligor to the Agent or any Lender
                 pursuant to or in connection with any Financing Document that
                 Obligor shall:

                 (i)   promptly, on becoming aware that it must make a tax
                       deduction (or if there is any change in the rate or the
                       basis of a tax deduction), notify the Agent accordingly
                       (if the Agent receives such notification from a Lender it
                       shall notify that Obligor);

                 (ii)  ensure or procure that the deduction or withholding is
                       made and that it does not exceed the minimum legal
                       requirement therefor;

                 (iii) pay, or procure the payment of, the full amount deducted
                       or withheld to the relevant Taxation or other authority
                       in accordance with the applicable law;

                 (iv)  increase the payment in respect of which the deduction or
                       withholding is required so that the net amount received
                       by the payee (which expression when used in this Clause
                       10.9.2 shall mean the Agent or any Lender) after the
                       deduction or withholding (and after taking account of any
                       further deduction or withholding which is required to be
                       made as a consequence of the increase) shall be equal to
                       the amount which the payee would have been entitled to
                       receive in the absence of any requirement to make any
                       deduction or withholding; and

                 (v)   promptly deliver or procure the delivery to the relative
                       payee of receipts evidencing each deduction or
                       withholding which has been made.	

- 28 -

        10.9.3   If the Agent is obliged to make any deduction or withholding
                 from any payment to any Lender (an "AGENCY PAYMENT") which
                 represents an amount or amounts received by the Agent from an
                 Obligor under this Agreement:

                 (i)   that Obligor shall pay directly to that Lender such sum
                       (an "AGENCY COMPENSATING SUM") as shall, after taking
                       into account any deduction or withholding which that
                       Obligor is obliged to make from the agency compensating
                       sum, enable that Lender to receive, on the due date for
                       payment of the agency payment, an amount equal to the
                       agency payment which that Lender would have received in
                       the absence of any obligation to make any deduction or
                       withholding; and

                 (ii)  the Agent shall use its reasonable endeavours to take the
                       action referred to in Clauses 10.9.2 (ii), (iii) and (v).

        10.9.4   An Obligor shall not be required to pay an additional amount
                 under this Clause 10.9 to the extent that the payment in
                 respect of which the deduction or withholding is required is a
                 payment of interest on a Participation in an Advance and that
                 deduction or withholding is required on account of United
                 Kingdom Tax and:

                 (i)   at the time that Participation was made, the Lender
                       making that Participation was not a Qualifying Lender
                       otherwise than as a consequence of a Change occurring
                       after the date of this Agreement (and the obligation to
                       deduct or withhold would not have arisen if that
                       Participation had been made by a Qualifying Lender; or

                 (ii)  at the time when the interest is paid, the Lender for
                       whose account it is paid is not beneficially entitled to
                       it, or, being beneficially entitled to it, the Lender is
                       not within the charge to United Kingdom corporation tax
                       otherwise than as a consequence of a Change occurring
                       after the date of this Agreement (and the obligation to
                       deduct or withhold would not have arisen if the Lender
                       had been beneficially entitled to the interest and had
                       been within the charge to United Kingdom corporation tax
                       as respects it).

        10.9.5   any Lender determines, in its absolute discretion, that it has
                 received, realised, utilised and retained a Tax benefit by
                 reason of any deduction or withholding in respect of which an
                 Obligor has made an increased payment or paid an agency
                 compensating sum under this Clause 10.9, that Lender shall,
                 provided that the Agent and each Lender have received all
                 amounts which are then due and payable by that Obligor under
                 this Agreement, pay to that Obligor (to the extent that that
                 Lender can do so without prejudicing the amount of the benefit
                 or repayment and the right of that Lender to obtain any other
                 benefit, relief or allowance which may be available to it) such
                 amount, if any, as that Lender, in its absolute discretion
                 shall determine, will leave that Lender in no worse position
                 than it would have been in if the deduction or withholding had
                 not been required, provided that:

                 (i)   each Lender shall have an absolute discretion to time at
                       which and the order and manner in which it realises or
                       utilises any Tax benefit and shall not be obliged to
                       arrange its business or its Tax affairs in any particular
                       way in order to be eligible for any credit or refund or
                       similar benefit;

                 (ii)  no Lender shall be obliged to disclose any information
                       regarding its business, Tax affairs or Tax computations;

                                     - 29 -	

                 (iii) if a Lender has made a payment to an Obligor pursuant to
                       the this Clause 10.9.5 on account of any Tax benefit and
                       it subsequently transpires that that Lender did not
                       receive that Tax benefit, or received a lesser Tax
                       benefit, that Obligor shall, on demand, pay to that
                       Lender such sum as that Lender may determine as being
                       necessary to restore its after tax position to that which
                       it would have been had no adjustment under this Clause
                       10.9.5 been made. Any sums payable by that Obligor to a
                       Lender under this Clause 10.9.5 shall be subject to
                       Clause 19.7 (INDEMNITY PAYMENTS).

        10.9.6   No Lender shall be obliged to make any payment under Clause
                 10.9.5 if, by doing so, it would contravene the terms of any
                 applicable law or any notice, direction or requirement of any
                 governmental or regulatory authority (whether or not having the
                 force of law).

        10.9.7   If an Obligor is required to make an increased payment for the
                 account of a Lender under Clause 10.9.2, then, without
                 prejudice to that obligation and so long as such requirement
                 exists and subject to the Guarantor giving the Agent and that
                 Lender not less than 10 days' prior notice (which shall be
                 irrevocable), the Borrowers may prepay all, but not part, of
                 that Lender's Participation in the Advances together with
                 accrued interest on the amount prepaid. Any such prepayment
                 shall be subject to Clause 24.1 (BREAKAGE COSTS INDEMNITY). On
                 any such prepayment the Commitment of the relevant Lender shall
                 be automatically cancelled.

10.10   LENDER CONFIRMATION

        10.10.1  Each Lender warrants and represents that, as at the date of
                 this Agreement in relation to Advances to be made to a UK
                 Borrower, acting through its relevant Lending Office, it is a
                 Qualifying Lender.

        10.10.2  Each Lender confirms that, if a Borrower requests that Lender
                 to complete any form or certificate, or to take any other
                 related action which would enable any deduction or withholding
                 on payments made by such Borrower to such Lender to be reduced
                 from the amount of deduction or withholding which it would
                 otherwise be required by law to make, and the completion of
                 such form or certificate or the carrying out of such action
                 would not, in the relevant Lender's opinion, prejudice its
                 business affairs, such Lender shall complete such form or
                 certificate or carry out such action promptly on it receiving
                 the relevant Borrower's written request so to do.

        10.10.3  Each Lender confirms that, in respect of its Participation in
                 any Advance to a UK Borrower, if it ceases to be a Qualifying
                 Lender on or before the date when the Advance is made to the
                 relevant Borrower, or at any time is not beneficially entitled
                 to the interest received from such Borrower, or being
                 beneficially entitled to the interest, at any time is not
                 within the charge to UK corporation tax in respect of such
                 interest (in each case, for whatever reason), it shall promptly
                 notify the relevant Borrower, in writing of its change in
                 status.

11      GUARANTEE

11.1    GUARANTEE

        Subject to and with the benefit of the provisions in Clause 11.2
        (GUARANTEE PROVISIONS), the Guarantor hereby guarantees to the
        Guaranteed Parties that it shall on demand pay in the

                                     - 30 -	

        currency in which the same falls due for payment under the terms of this
        Agreement, all moneys which are now or at any time hereafter shall have
        become due or owing by any of the Borrowers to any or all of the
        Guaranteed Parties pursuant to this Agreement.

11.2    GUARANTEE PROVISIONS

        11.2.1   The guarantee (the "GUARANTEE") given pursuant to this Clause
                 11 is a continuing security and shall remain in full force and
                 effect until all moneys, obligations and liabilities referred
                 to in Clause 11.1 (GUARANTEE) have been paid, discharged or
                 satisfied in full notwithstanding the liquidation or other
                 incapacity or any change in the constitution of any of the
                 Obligors or in the name and style of any of them or any
                 settlement of account or other matter whatsoever.

        11.2.2   This Guarantee is in addition to and shall not merge with or
                 otherwise prejudice or affect or be prejudiced by any other
                 right, remedy, guarantee, indemnity or security and may be
                 enforced without first having recourse to the same or any other
                 bill, note, mortgage, charge, pledge or lien now or hereafter
                 held by or available to any Guaranteed Party.

        11.2.3   Notwithstanding that this Guarantee ceases to be continuing for
                 any reason whatever any of the Guaranteed Parties may continue
                 any accounts of any of the Borrowers or open one or more new
                 accounts and the liability of the Guarantor hereunder shall not
                 be reduced or affected by any subsequent transactions or
                 receipts or payments into or out of any such accounts.

        11.2.4   If any purported obligation or liability of any Borrower under
                 this Agreement is not or ceases to be valid or enforceable on
                 any ground whatsoever whether or not known to any Guaranteed
                 Party including but not limited to any defect in or want of
                 powers of any Borrower or irregular exercise thereof or lack of
                 authority by any person purporting to act on behalf of any
                 Borrower or any legal or other limitation (whether under the
                 Limitation Act 1980 or otherwise), disability, incapacity or
                 any change in the constitution of or any amalgamation,
                 reconstruction or liquidation of any Borrower, the Guarantor
                 shall nevertheless be liable to the Guaranteed Parties in
                 respect of that purported obligation or liability as if the
                 same were fully valid and enforceable and the Guarantor were
                 the principal debtor in respect thereof. The Guarantor hereby
                 agrees to keep the Guaranteed Parties fully indemnified in the
                 currency in which such purported obligation or liability arose
                 against all damages, losses, costs and expenses arising from
                 any failure of any Borrower to carry out any such purported
                 obligation or liability.

        11.2.5   The liability of the Guarantor shall not be affected nor shall
                 this Guarantee be discharged or diminished by reason of:

                 (i)   any present or future bill, note, guarantee, indemnity,
                       mortgage, charge, pledge, lien or other security or right
                       or remedy held by or available to all or any of the
                       Guaranteed Parties being or becoming wholly or in part
                       void, voidable or unenforceable on any ground whatsoever
                       or by all or any of the Guaranteed Parties from time to
                       time dealing with, exchanging, varying, realising,
                       releasing or failing to perfect or enforce any of the
                       same; or

                 (ii)  all or any of the Guaranteed Parties compounding with,
                       discharging, releasing or varying the liability of or
                       granting any time, indulgence or concession to any
                       Borrower or any other person or renewing, determining,

                                     - 31 -	

                       varying or increasing any bill, promissory note or other
                       negotiable instrument, accommodation, facility or
                       transaction in any manner whatsoever or concurring in,
                       accepting or varying any compromise, arrangement or
                       settlement or omitting to claim or enforce payment from a
                       principal debtor or any other person; or

                 (iii) any act or omission which would not have discharged or
                       affected the liability of the Guarantor had it been a
                       principal debtor instead of guarantor or by anything done
                       or omitted which but for this provision might operate to
                       exonerate the Guarantor.

        11.2.6   The Guarantor warrants to the Guaranteed Parties that it has
                 not taken or received and undertakes not to take or receive the
                 benefit of any security from any Borrower in connection with
                 this Guarantee. If any such security is taken or the Guarantor
                 receives the benefit of the same the Guarantor declares that
                 such security and all moneys at any time received in respect
                 thereof shall be held on trust for the Guaranteed Parties to be
                 applied in discharge of the liabilities of the Guarantor to the
                 Guaranteed Parties under this Agreement.

        11.2.7   Until all amounts owing under this Agreement have been paid,
                 discharged or satisfied in full, the Guarantor waives all
                 rights of subrogation and indemnity against any Borrower and
                 agrees not to share in any security held or moneys received by
                 any Guaranteed Party on account of such liabilities or, unless
                 so instructed by the Agent, (acting on the instructions of the
                 Majority Lenders) to claim or prove in competition with any
                 Guaranteed Party in the liquidation of any Borrower in respect
                 of any moneys paid by the Guarantor to any Guaranteed Party
                 hereunder. If the Guarantor receives any payment or other
                 benefit or exercises any set-off or counterclaim or otherwise
                 acts in breach of this Clause anything so received and any
                 benefit derived directly or indirectly by the Guarantor
                 therefrom shall be held in trust for the Guaranteed Parties to
                 be applied in discharge of the liability of the Guarantor to
                 the Guaranteed Parties hereunder.

        11.2.8   Any money received in connection with this Guarantee may be
                 placed to the credit of a suspense account with a view to
                 preserving the rights of the Guaranteed Parties to prove for
                 the whole of their claims against any Borrower or any other
                 person liable or may be applied by the Guaranteed Parties in or
                 towards satisfaction of such of the moneys, obligations or
                 liabilities of the relevant Borrower hereby guaranteed as the
                 relevant Guaranteed Party in its absolute discretion may from
                 time to time conclusively determine.

        11.2.9   If this Guarantee is determined or called in by demand made by
                 the Agent, then the Guaranteed Parties may open a new account
                 or accounts with any Borrower. If the Guaranteed Parties do not
                 open a new account or accounts they shall nevertheless be
                 treated as if they had done so at the time of determination or
                 calling in and as from that time all payments made to the
                 Guaranteed Parties shall be credited or be treated as having
                 been credited to the new account or accounts and shall not
                 operate to reduce the amount for which this guarantee is
                 available as security at that time.

        11.2.10  Any release, discharge or settlement between the Guarantor and
                 the Guaranteed Parties shall be conditional upon no security
                 disposition or payment to any of the Guaranteed Parties by any
                 Borrower or any other person being void, set aside or ordered
                 to be refunded pursuant to any enactment or law relating to
                 bankruptcy,

                                     - 32 -	

                 liquidation or insolvency or for any reason whatever and if
                 such condition shall not be fulfilled the Guaranteed Parties
                 shall be entitled to enforce this Guarantee subsequently as if
                 such release, discharge or settlement had not occurred and any
                 such payment had not been made.

        11.2.11  The Guaranteed Parties shall not be obliged before taking steps
                 to enforce this Guarantee:

                 (i)   to take action or obtain judgment in any court against
                       any Borrower or any other person;

                 (ii)  to make or file any claim in a bankruptcy or liquidation
                       of any Borrower or any other person; or

                 (iii) to make, enforce or seek to enforce any claim against any
                       Borrower or any other person under any security or other
                       document, agreement or arrangement.

12      REPRESENTATIONS AND WARRANTIES

12.1    REPRESENTATIONS AND WARRANTIES

        The Guarantor represents and warrants to each Lender and the Agent that:

        12.1.1   STATUS: It is a US corporation duly formed and in good standing
                 under the laws of the jurisdiction of its place of
                 incorporation, and each other Group Company is a limited
                 company duly incorporated under the laws of the jurisdiction of
                 the place of its incorporation, and it possesses the capacity
                 to sue and be sued in its own name and has the power to carry
                 on its business and to own its property and other assets except
                 in the case of any Group Company which is not an Obligor, where
                 failure to possess such capacity or to have such power could
                 not reasonably be expected to have a Material Adverse Effect.

        12.1.2   POWERS AND AUTHORITY: Each Obligor has power to execute,
                 deliver and perform its obligations under the Financing
                 Documents and to carry out the transactions contemplated by
                 those documents and all necessary corporate, shareholder and
                 other action has been or will be taken to authorise the
                 execution, delivery and performance of the same.

        12.1.3   BINDING OBLIGATIONS: Subject to the Reservations, the
                 obligations of each Obligor under the Financing Documents
                 constitute its legal, valid, binding and enforceable
                 obligations.

        12.1.4   CONTRAVENTIONS: The execution, delivery and performance by each
                 Obligor of the Financing Documents does not:

                 (i)   contravene any applicable law or regulation (including
                       Regulations U and X) or any order of any governmental or
                       other official authority, body or agency or any judgment,
                       order or decree of any court having jurisdiction over it
                       (for the avoidance of doubt, the Guarantor is not
                       representing or warranting compliance by the Lenders of
                       Regulation U);

                 (ii)  conflict with, or result in any breach of any of the
                       terms of, or constitute a default under, any agreement or
                       other instrument to which it is a party or any licence or
                       other authorisation to which it is subject or by which it
                       or any

                                     - 33 -	

                       of its property is bound to the extent that, in any case,
                       the same has or could reasonably be expected to have, a
                       Material Adverse Effect; or

                 (iii) contravene or conflict with the provisions of its
                       constitutional documents.

        12.1.5   NO DEFAULT: No Default has occurred or is continuing on the
                 date of this Agreement.

        12.1.6   NO BREACH: No Group Company is in breach of, or in default
                 under, any agreement to which it is a party or which is binding
                 on it or any of its assets, in a manner or to an extent which
                 could reasonably be expected to have a Material Adverse Effect.

        12.1.7   LITIGATION: No action, litigation, arbitration, administrative
                 proceeding or governmental inquiry has been commenced or is
                 pending, or, to the knowledge of their officers, threatened,
                 against any Group Company or its assets which, if decided
                 adversely, could reasonably be expected to have a Material
                 Adverse Effect.	

12.1.8 ACCOUNTS:
(i) Each of the latest Accounts required to be delivered

                       under Clause 13.1.1 (ACCOUNTS) is prepared in accordance
                       with GAAP and fairly presents the financial position of
                       the relevant company as at the date of such Accounts and
                       the results of its operations and its cash flows for the
                       annual period ended on such date; and

                 (ii)  Each of the latest unaudited quarterly consolidated
                       statements of income, stockholders' equity and cash flows
                       of the Guarantor delivered under Clause 13.1.2 (QUARTERLY
                       FINANCIAL STATEMENTS) fairly presents the consolidated
                       financial position of the Guarantor as at the date of
                       such quarterly financial statements and the consolidated
                       results of operations and cash flows for the relevant
                       quarterly period, subject to normal year-end audit
                       adjustments and the absence of footnotes.

        12.1.9   ENCUMBRANCES: No Encumbrance other than a Permitted Encumbrance
                 exists over all or any part of the assets of any Group Company.

        12.1.10  NO ENCUMBRANCES CREATED: The execution of the Financing
                 Documents by each Obligor and the exercise of each of their
                 respective rights and the performance of each of their
                 respective obligations under the Financing Documents will not
                 result in the creation of, or any obligation to create, any
                 Encumbrance over or in respect of any of their assets.

        12.1.11  AUTHORISATIONS: All applicable authorisations, approvals,
                 licences, consents, filings, registrations, payments of duties
                 or taxes and notarisations required:

                 (i)   for the conduct of the business, trade and ordinary
                       activities of each Group Company or the ownership of
                       their respective assets (except to the extent that
                       failure to make pay or obtain the same could not
                       reasonably be expected to have a Material Adverse
                       Effect);

                 (ii)  for the performance and discharge of the obligations of
                       each Obligor under the Financing Documents to which it is
                       a party; and

                                     - 34 -	

                 (iii) in connection with the execution, delivery, validity and,
                       subject to the Reservations, enforceability or
                       admissibility in evidence of the Financing Documents,

                 are in full force and effect.

        12.1.12  COMPLIANCE WITH LAWS: Each Group Company has complied in all
                 material respects with all applicable statutes, rules,
                 regulations, orders and restrictions of any government or any
                 body or agency thereof, having jurisdiction over the conduct of
                 its business or the ownership of its assets, except where the
                 failure so to comply could not reasonably be expected to have a
                 Material Adverse Effect.

        12.1.13  NO MATERIAL ADVERSE CHANGE: Since 31 December 2000, no event
                 has occurred which has had, or could be reasonably expected to
                 have, a Material Adverse Effect.

        12.1.14  TAXES: Each Group Company has complied in all material respects
                 with all Taxation laws in all jurisdictions in which it is
                 subject to Taxation and has paid all Taxes due and payable by
                 it and no claims are being asserted against it in respect of
                 Taxes which could reasonably be expected to have a Material
                 Adverse Effect except for assessments in relation to the
                 ordinary course of its business or claims contested in good
                 faith and in respect of which adequate provision has been made
                 and disclosed in the latest Accounts or other information
                 delivered to the Agent under this Agreement.

        12.1.15  ERISA:

                 (i)   The Unfunded Liability of all Single Employer Plans does
                       not in the aggregate exceed US$85,000,000;

                 (ii)  neither the Guarantor nor any other member of the
                       Controlled Group maintains, or is obliged to contribute
                       to, any Multiemployer Plan or has incurred, or is
                       reasonably expected to incur, any withdrawal liability to
                       any Multiemployer Plan;

                 (iii) each Plan complies with all applicable requirements of
                       law and regulations;

                 (iv)  neither the Guarantor nor any member of the Controlled
                       Group has, with respect to any Plan, failed to make any
                       contribution or pay any amount required under Section 412
                       of the Code or Section 302 of ERISA or the terms of such
                       Plan;

                 (v)   there are no pending or, to the knowledge of the
                       Guarantor, threatened claims, actions, investigations or
                       lawsuits against any Plan, any fiduciary thereof, or the
                       Guarantor or any member of the Controlled Group with
                       respect to a Plan;

                 (vi)  neither the Guarantor nor any member of the Controlled
                       Group has engaged in any prohibited transaction (as
                       defined in Section 4975 of the Code or Section 406 of
                       ERISA) in connection with any Plan which would subject
                       such person to any liability;

                 (vii) within the last five years neither the Guarantor nor any
                       member of the Controlled Group has engaged in a
                       transaction which resulted in a Single Employer Plan with
                       an Unfunded Liability being transferred out of the
                       Controlled Group; and

                                     - 35 -	

                 (viii) no Termination Event has occurred or is reasonably
                        expected to occur with respect to any Plan which is
                        subject to Title IV of ERISA,

                 provided that the representation and warranty contained in this
                 Clause 12.1.15 shall only be breached if the circumstances
                 relating to any actual breach have or could reasonably be
                 expected to have, a Material Adverse Effect.

        12.1.16  FEDERAL RESERVE REGULATIONS:

                 No part of the proceeds of any Advance will be used, directly
                 or indirectly, to purchase or carry any Margin Stock within the
                 meaning of Regulation U.

        12.1.17  INVESTMENT COMPANY AND PUBLIC UTILITY HOLDING COMPANY: No Group
                 Company is, or after giving effect to any Advance will be, an
                 "investment company" or a company "controlled" by an
                 "investment company" within the meaning of the US Investment
                 Company Act of 1940 and the Guarantor is not subject to
                 regulation under the US Public Utility Holding Company Act of
                 1935.

        12.1.18  OWNERSHIP OF PROPERTIES:

                 (i)   Each Group Company has a subsisting leasehold or freehold
                       interest in, or good and marketable title, free of all
                       Encumbrances, other than Permitted Encumbrances, to all
                       of the properties and assets reflected in the Accounts as
                       being owned by it, except for assets sold, transferred or
                       otherwise disposed of in the ordinary course of business,
                       or as required by or in connection with the Demerger
                       provided that such sale, transfer or other disposal in
                       connection with the Demerger would not have a Material
                       Adverse Effect, since the date thereof; and

                 (ii)  the relevant Group Companies own or possess rights to use
                       all licences, patents, patent applications, copyrights,
                       service marks, trademarks and trade names necessary to
                       continue to conduct their business as heretofore
                       conducted, and no such licence, patent or trademark has
                       been declared invalid, been limited by order of any court
                       or by agreement or is the subject of any infringement,
                       interference or similar proceeding or challenge, except
                       for proceedings and challenges which could not reasonably
                       be expected to have a Material Adverse Effect.

        12.1.19  MATERIAL AGREEMENTS: No Group Company is a party to any
                 agreement or instrument or subject to any corporate restriction
                 which could reasonably be expected to have a Material Adverse
                 Effect or which restricts or imposes conditions upon the
                 ability of any Group Company to (i) pay dividends or make other
                 distributions on its issued share capital, (ii) make loans or
                 advances to the Guarantor or (iii) repay loans or advances from
                 the Guarantor where, in the cases of (i), (ii) and (iii), such
                 restriction or imposition has or could reasonably be expected
                 to have a material adverse effect on the ability of the
                 Guarantor to comply with its payment obligations under the
                 Financing Documents.

        12.1.20  ENVIRONMENTAL: Each Group Company has and has at all times
                 complied with all applicable Environmental Law, non-compliance
                 with which could reasonably be expected to have a Material
                 Adverse Effect, every consent, authorisation, licence or
                 approval required under or pursuant to any Environmental Law by
                 each Group Company in connection with the conduct of its
                 business and the ownership, use, exploitation or occupation of
                 its assets the absence or lack of which could

                                     - 36 -	

                 reasonably be expected to have a Material Adverse Effect, has
                 been obtained and is in full force and effect, there has been
                 no default in the observance of the conditions and restrictions
                 (if any) imposed in, or in connection with, any of the same
                 which default could reasonably be expected to have a Material
                 Adverse Effect, and no circumstances have arisen (i) which
                 would entitle any person to revoke, suspend, amend, vary,
                 withdraw or refuse to amend any of the same or (ii) which might
                 give rise to a claim against any Group Company which could
                 reasonably be expected to have a Material Adverse Effect having
                 regard to the cost to that Group Company of meeting such a
                 claim.

        12.1.21  INSURANCE: The Group as a whole maintains, with financially
                 sound and reputable insurance companies, insurance on its
                 assets in such amounts and covering such risks as is consistent
                 with sound business practice.

        12.1.22  INSURANCE LICENCES: No material licence, permit or
                 authorisation of any Group Company to engage in the business of
                 insurance or insurance-related activities is the subject of a
                 proceeding for suspension or revocation, except where such
                 suspension or revocation would not individually or, when
                 aggregated, have a Material Adverse Effect.

        12.1.23  DISCLOSURE:

                 (i)   None of the written information, exhibits or reports
                       furnished by any Group Company to the Agent or to any
                       Lender in connection with the negotiation of the
                       Financing Documents or representations or warranties of
                       any Group Company contained in the Financing Documents,
                       or any other document, certificate or written statement
                       furnished to the Agent or the Lenders by or on behalf of
                       any Group Company for use in connection with the
                       transactions contemplated by this Agreement, contains any
                       untrue statement of a material fact or omits to state a
                       material fact necessary in order to make the statements
                       contained herein or therein not misleading in light of
                       the circumstances in which the same were made; and

                 (ii)  as of the date hereof, there is no fact known to the
                       Guarantor (other than matters of a general economic
                       nature) that has had or could reasonably be expected to
                       have a Material Adverse Effect and that has not been
                       disclosed herein or in such other information, documents,
                       certificates and statements furnished to the Lenders for
                       use in connection with the transactions contemplated by
                       this Agreement.

        12.1.24  INFORMATION MEMORANDUM: The factual information contained in
                 the Information Memorandum was, at the date of the Information
                 Memorandum, true and accurate in all material respects and not
                 misleading in any material respect, there are no other facts
                 the omission of which would make any fact or statement in the
                 Information Memorandum misleading in any material respect and
                 nothing has occurred which would render any fact or statement
                 in the Information Memorandum untrue or misleading in any
                 material respect.

12.2    REPETITION

        The representations and warranties in Clause 12.1 (REPRESENTATIONS AND
        WARRANTIES) shall survive the execution of this Agreement and shall be	

deemed to be repeated by the Guarantor:
- 37 -

        12.2.1   on the first Drawdown Date; and

        12.2.2   (other than those made under Clause 12.1.5 (NO DEFAULT), 12.1.9
                 (ENCUMBRANCES), 12.1.10 (NO ENCUMBRANCES CREATED) 12.1.11
                 (AUTHORISATIONS), 12.1.13 (NO MATERIAL ADVERSE CHANGE), 12.1.14
                 (TAXES), 12.1.20 (ENVIRONMENTAL), 12.1.21 (INSURANCES), 12.1.23
                 (DISCLOSURE) and 12.1.24 (INFORMATION PACKAGE) inclusive) on
                 (i) each other Drawdown Date, and (ii) the first day of each
                 Interest Period for each Term Advance,

        in each case, as if made with reference to the facts and circumstances
        existing at that time.

13      UNDERTAKINGS

13.1    INFORMATION UNDERTAKINGS

        The Guarantor undertakes that during the Facility Period it shall,
        unless the Agent (acting on the instructions of the Majority Lenders)
        otherwise agrees:

        13.1.1   ACCOUNTS: As soon as the same become available (and in any
                 event, in the case of the Guarantor, within 90 days after the
                 end of each of its Financial Years and, in the case of each
                 other Obligor, within the time limit provided by law for the
                 filing of the relevant Accounts), deliver to the Agent in
                 sufficient copies for all the Lenders the Accounts of each
                 Obligor for each such Financial Year together with, where
                 appropriate, a copy of the management letter (if any) addressed
                 by the auditors to the directors of the relevant Obligor in
                 connection with its auditing of the relevant Accounts as soon
                 as reasonably practicable after receipt of the letter by such
                 Obligor.

        13.1.2   QUARTERLY FINANCIAL STATEMENTS: As soon as the same become
                 available (and in any event within 45 days after the end of
                 each consecutive period of 3 months ending on 31 March, 30 June
                 or 30 September during each of its Financial Years) deliver to
                 the Agent in sufficient copies for all the Lenders, unaudited
                 consolidated quarterly statements of income, stockholders'
                 equity and cash flows of the Guarantor as at the end of, and
                 for the quarterly period ending on, such quarterly financial
                 date certified by the chief financial officer of the Guarantor
                 as fairly presenting the consolidated financial position of the
                 Guarantor as at, and for the quarterly period ending on, such
                 quarterly financial date, subject to normal year-end audit
                 adjustments and the absence of footnotes.

        13.1.3   PLANS:

                 (i)   In any event no later than the date on which the IRS Form
                       5500 is filed (or required to be filed, without regard to
                       extensions for time to file) for the Plan, deliver a
                       statement of the Unfunded Liabilities of each Single
                       Employer Plan, certified as correct by an actuary
                       enrolled under ERISA; and

                 (ii)  as soon as possible and in any event within 10 days after
                       the Guarantor knows that any Termination Event has
                       occurred with respect to any Plan, deliver a statement,
                       signed by the chief financial officer of the Guarantor,
                       describing such Termination Event and the action which
                       the Guarantor proposes to take with respect thereto.	

- 38 -

        13.1.4   SHAREHOLDERS' DOCUMENTS: Deliver to the Agent in sufficient
                 copies for all the Lenders all documents despatched by it to
                 its shareholders or its creditors generally at the same time as
                 they are despatched.

        13.1.5   SECURITIES AND EXCHANGE COMMISSION: At the same time as they
                 are filed, copies of all registration statements and annual,
                 quarterly, monthly or other regular reports which any Group
                 Company files with the US Securities and Exchange Commission
                 other than Form S-8 (or successor forms) registration
                 statements and other registration statements or reports
                 relating to employee stock programs.

        13.1.6   COMPLIANCE CERTIFICATES: When delivering its Accounts and
                 management accounts pursuant to Clauses 13.1.1 (ACCOUNTS) and
                 13.1.2 (MANAGEMENT ACCOUNTS), deliver to the Agent a
                 certificate signed by the chief financial officer or
                 vice-president or controller of the Guarantor showing
                 calculations as to compliance with Clause 14 (FINANCIAL
                 UNDERTAKINGS) and certifying that no Default or Potential
                 Default is outstanding or, if a Default or Potential Default is
                 outstanding, specifying the Default or Potential Default and
                 the steps, if any, being taken to remedy it provided that, in
                 relation to any certificate delivered together with the
                 Guarantors' Accounts, such certificate shall include a
                 certification from the auditors of the Guarantor as to the
                 matters set out in such certificate.

        13.1.7   INFORMATION ON REQUEST: Promptly following the Agent's request,
                 supply to the Agent such information, documents and records in
                 relation to the business, condition, operations and prospects
                 of any Group Company as the Agent may from time to time
                 reasonably require.

        13.1.8   GAAP: Ensure that all Accounts and other financial information
                 submitted to the Agent have been prepared in accordance with
                 GAAP.

        13.1.9   DEFAULT, LITIGATION, ETC: Promptly, upon becoming aware of the
                 same, notify the Agent of:

                 (i)   any Default or Potential Default;

                 (ii)  litigation, arbitration or administrative proceeding
                       commenced against any Group Company which may be
                       reasonably expected to have a Material Adverse Effect;

                 (iii) any change in the Debt Rating Level;

                 (iv)  completion of the Demerger; and

                 (v)   any occurrence (including any third party claim or
                       liability but other than of a general economic or
                       political nature) which could reasonably be expected to
                       have a Material Adverse Effect.

13.2    POSITIVE UNDERTAKINGS

        The Guarantor undertakes that during the Facility Period it shall, and
        it shall procure that each Group Company shall, unless the Agent (acting
        on the instructions of the Majority Lenders) otherwise agrees:

        13.2.1   PAY TAXES: Pay and discharge all Taxes and governmental charges
                 payable by or assessed upon it in accordance with good business
                 practice unless, and only to the extent that, such Taxes and
                 charges shall be contested in good faith by appropriate
                 proceedings, pending determination of which payment may
                 lawfully be withheld,

                                     - 39 -	

                 and there shall be set aside adequate reserves with respect to
                 any such Taxes or charges so contested in accordance with GAAP.

        13.2.2   INSURANCE: Procure that the Group as a whole maintains with
                 financially sound and reputable insurance companies, insurance
                 on its assets in such amounts and covering such risks as is
                 consistent with sound business practice.

        13.2.3   AUTHORISATIONS: Obtain, maintain and comply with the terms of
                 any authorisation, approval, licence, consent, exemption,
                 clearance, filing or registration required:

                 (i)   for the conduct of its business, trade and ordinary
                       activities save to the extent that failure to obtain,
                       maintain or comply with the same could reasonably be
                       expected not to have a Material Adverse Effect; and

                 (ii)  to enable it to perform its obligations under, or for the
                       validity and, subject to the Reservations, enforceability
                       or admissibility in evidence of, any Financing Document.

        13.2.4   CONDUCT OF BUSINESS: Carry on and conduct its business in
                 substantially the same manner and in substantially the same
                 field of business as it is presently conducted provided that
                 the occurrence of the Demerger and provision of the
                 Transitional Services shall not cause a breach of this
                 provision.

        13.2.5   COMPLIANCE WITH LAWS: Comply with all laws (including
                 Environmental Law), rules, regulations, orders, writs,
                 judgments, injunctions, decrees or awards to which it may be
                 subject, the failure to comply with which could reasonably be
                 expected to have a Material Adverse Effect.

        13.2.6   MAINTENANCE OF ASSETS: Do all things necessary to maintain,
                 preserve, protect and keep its assets in good repair, working
                 order and condition, and make all necessary and proper repairs,
                 renewals and replacements which are required in accordance with
                 good business practice so that its business carried on in
                 connection therewith may be properly conducted at all times.

        13.2.7   ACCESS: Upon reasonable notice being given to the Guarantor by
                 the Agent, permit the Agent and the Lenders and any person
                 (being an accountant, auditor, solicitor, valuer or other
                 professional adviser of the Agent) authorised by the Agent or
                 Lender to have upon its reasonable request and at all
                 reasonable times during normal business hours, access to any of
                 the assets, premises, accounting books and records of any Group
                 Company and to discuss the affairs, finances and accounts of
                 any Group Company with, and to be advised as to the same by,
                 their respective officers at such reasonable times and
                 intervals as the Agent or Lenders may designate.

        13.2.8   ERISA:

                 (i)   Fulfil, and cause each member of the Controlled Group to
                       fulfil, its obligations under the minimum funding
                       standards of ERISA and the Code with respect to each Plan
                       except where failure to fulfil such obligations
                       individually or in aggregate would not have a Material
                       Adverse Effect; and

                 (ii)  comply, and cause each member of the Controlled Group to
                       comply, with all applicable provisions of ERISA and the
                       Code with respect to each Plan, except where such failure
                       to comply individually or in aggregate would not have a
                       Material Adverse Effect; and	

- 40 -

                 (iii) not, and not permit any member of the Controlled Group
                       to, (i) seek a waiver of the minimum funding standards
                       under ERISA, (ii) terminate or withdraw from any Plan or
                       (iii) take any other action with respect to any Plan
                       which would reasonably be expected to entitle the PBGC to
                       terminate, impose liability in respect of, or cause a
                       trustee to be appointed to administer, any Plan, unless
                       the actions or events described in (i), (ii) or (iii)
                       above individually or in the aggregate would not have a
                       Material Adverse Effect.

        13.2.9   RANKING OF OBLIGATIONS: Ensure that its obligations under the
                 Financing Documents shall at all times rank at least PARI PASSU
                 with all its other present and future unsecured and
                 unsubordinated Indebtedness except for any obligations which
                 are mandatorily preferred by law and not by contract.

13.3    NEGATIVE UNDERTAKINGS

        The Guarantor undertakes that during the Facility Period it shall not,
        and it shall procure that none of the Group Companies shall, unless the
        Agent (acting on the instructions of the Majority Lenders) otherwise
        agrees:

        13.3.1   USE OF PROCEEDS: Use any of the proceeds of the Advances to
                 purchase or carry any Margin Stock or to finance the
                 acquisition of any company or other entity which has not been
                 approved and recommended by the board of directors (or
                 functional equivalent thereof) of such company or other entity.

        13.3.2   DIVIDENDS: In respect of the Guarantor only, so long as any
                 Default has occurred and is continuing declare or pay any
                 dividends or other distribution in relation to its capital
                 stock or repay or prepay, redeem or purchase or otherwise
                 acquire or retire any of its capital stock or any options or
                 other rights in respect thereof at any time outstanding other
                 than any dividend, distribution, repayment, prepayment,
                 redemption, purchase, retirement or other option contemplated
                 by or required in connection with the Demerger provided that no
                 such declaration or payment would have a Material Adverse
                 Effect.

        13.3.3   MERGER: Save in respect of any transaction or step contemplated
                 by or required in connection with the Demerger provided that no
                 such transaction or step would have a Material Adverse Effect,
                 in respect of any Obligor enter into any amalgamation,
                 demerger, merger or reconstruction other than in relation to an
                 Obligor (not being the Guarantor) where:

                 (i)   the relevant Obligor is the continuing or surviving
                       entity; and

                 (ii)  the amalgamation, demerger, merger or reconstruction does
                       not constitute a Default; and

                 (iii) the Agent receives an opinion in terms satisfactory to it
                       and from counsel approved by it to the effect that after
                       the relevant amalgamation, demerger, merger or
                       reconstruction, the relevant Obligor remains bound by the
                       terms of this Agreement.

        13.3.4   NEGATIVE PLEDGE: Create or permit to subsist any Encumbrance
                 over any of its assets other than Permitted Encumbrances.	

- 41 -

13.3.5   AFFILIATES: Enter into any transaction (including, without
         limitation, the purchase or sale of any asset or service) with,
         or make any payment or transfer to, any Affiliate other than
         transactions, payments or transfers:

         (i)   between the Guarantor and any Wholly-Owned Subsidiary of
               the Guarantor or between Wholly-Owned Subsidiaries of the
               Guarantor; or

         (ii)  in the ordinary course of the day to day business, and
               pursuant to the reasonable requirements, of the relevant
               Group Company's business and in accordance with good
               business practice; or

         (iii) contemplated by or required in connection with the
               Demerger or the Transitional Services provided that no
               such transaction, payment or transfer would have a
               Material Adverse Effect.

13.3.6   CHANGE IN FINANCIAL YEAR: In respect of the Guarantor only
         change its Financial Year to end on any date other than 31
         December of each year.

13.3.7   INCONSISTENT AGREEMENTS: Enter into any indenture, agreement,
         instrument or other arrangement which:

         (i)   directly or indirectly prohibits or restrains, or has the
               effect of prohibiting or restraining, or imposes
               materially adverse conditions upon the incurrence of the
               obligations of the Obligors under the Financing
               Documents, the amending of the Financing Documents or the
               ability of any Subsidiary of the Guarantor to (1) pay
               dividends or make other distributions on its issued share
               capital, (2) make loans or advances to the Guarantor, or
               (3) repay loans or advances from the Guarantor where, in
               the cases of (1), (2) and (3), such prohibition,
               restraint or imposition has, or could reasonably be
               expected to have, a material adverse effect on the
               ability of the Guarantor to comply with its payment
               obligations under the Financing Documents; or

         (ii)  contains any provision which would be violated or
               breached by the making of Advances or by the performance
               by any Obligor of any of its obligations under any
               Financing Document.	

14 FINANCIAL UNDERTAKINGS
14.1 MINIMUM NET WORTH

        14.1.1   The Guarantor shall at all times maintain a Net Worth of at
                 least $2,000,000,000.

        14.1.2   If the Demerger has not been completed by 30 September 2002,
                 the Guarantor shall at all times from 1 October 2002 maintain a
                 Net Worth of at least $2,500,000,000.

14.2    EBITDA TO CONSOLIDATED INTEREST EXPENSE

        The Guarantor shall ensure that the ratio of EBITDA to Consolidated
        Interest Expense for any Relevant Period will not be less than 4 to 1.

14.3    FINANCIAL UNDERTAKING CALCULATION

        For the purposes of this Clause 14, Borrowings, EBITDA and the Net Worth
        of the Guarantor shall be determined by reference to the appropriate
        quarterly management

                                     - 42 -	

        accounts and, once delivered, the Accounts, in each case, most recently
        provided to the Agent under Clauses 13.1.1 (ACCOUNTS) and 13.1.2
        (MANAGEMENT ACCOUNTS).

15      DEFAULT

15.1    DEFAULT

        Each of the following shall be a Default:

        15.1.1   NON-PAYMENT: An Obligor does not pay within 5 days of the
                 relevant due date any amount payable by it under any Financing
                 Document at the place at and in the currency and funds in which
                 it is expressed to be payable.

        15.1.2   FINANCIAL UNDERTAKINGS: Any requirement of Clause 14 (FINANCIAL
                 UNDERTAKINGS) is not satisfied.

        15.1.3   OTHER DEFAULTS: The Guarantor breaches any of its obligations
                 under any Financing Document (other than the obligations
                 referred to in Clause 15.1.1 (NON-PAYMENT) and Clause 15.1.2
                 (FINANCIAL UNDERTAKINGS)) and, if that breach is capable of
                 remedy, it is not remedied within 20 days after notice of that
                 breach has been given by the Agent to the Guarantor.

        15.1.4   BREACH OF REPRESENTATION OR WARRANTY: Any representation,
                 warranty or statement made or deemed to be repeated by the
                 Guarantor under or in connection with any Financing Document or
                 in any document delivered by or on behalf of any Obligor under
                 or in connection with any Financing Document is incorrect in
                 any respect when made or deemed to have been repeated.

        15.1.5   UNLAWFULNESS OR REPUDIATION: It is unlawful for any Obligor to
                 perform or comply with, or any Obligor repudiates, any of its
                 obligations under any Financing Document.

        15.1.6   CROSS-ACCELERATION: Any Indebtedness of all or any of the Group
                 Companies in excess of, in aggregate, $25,000,000:

                 (i)   is not paid when due (taking into account any originally
                       applicable grace period); or

                 (ii)  is declared to be or otherwise becomes due and payable
                       prior to its specified maturity by reason of an event of
                       default, default or similar culpable occurrence on the
                       part of the relevant Group Company.	

15.1.7 CROSS-DEFAULT:
(i) at any time when any creditor or creditors of all or any of the Group Companies has the benefit of a Cross Default Provision (other than where such Cross Default Provision is contained in a document entered into by a company or other entity which is acquired by a Group Company after the date of this Agreement and such Cross Default Provision ceases to exist within one month of such acquisition); or
(ii) if the US Loan Agreement Number 1 lenders or the US Loan Agreement Number 2 lenders amend or have amended the US Loan Agreement Number 1 or the US Loan Agreement Number 2, as the case may be, to remove the Cross Default Provision contained in that agreement as at the date of this Agreement at a time when the Guarantor does not have a credit
- 43 -

                       rating of at least "A3" (or better) from Moody's and
                       "AA-" (or better) from S & P, and subsequently,

                 any creditor of all or any of the Group Companies becomes
                 entitled to declare any Indebtedness of all or any of the Group
                 Companies in excess of, in aggregate $25,000,000 due and
                 payable prior to its specified maturity.

        15.1.8   ATTACHMENT OR DISTRESS: A creditor or encumbrancer attaches or
                 takes possession of, or a distress, execution, sequestration or
                 other process is levied or enforced upon or sued out against a
                 Substantial Portion of the assets of the Group and such process
                 is not discharged within 28 days.

        15.1.9   UNDISCHARGED JUDGMENT: Any Group Company fails within 30 days
                 to pay, bond, or otherwise discharge any judgment or order for
                 the payment of an amount in excess of $25,000,000 (or multiple
                 judgments or orders for the payment of an aggregate amount of
                 $50,000,000) unless such judgment (or judgments) are being
                 contested in good faith and no enforcement actions have been
                 commenced in relation thereto.

        15.1.10  INABILITY TO PAY DEBTS: Any Group Company (other than a Dormant
                 Subsidiary):

                 (i)   suspends payment of its debts or is unable or admits its
                       inability to pay its debts as they fall due; or

                 (ii)  begins negotiations with any creditor with a view to the
                       readjustment or rescheduling of any of its Indebtedness;
                       or

                 (iii) proposes or enters into any composition or other
                       arrangement for the benefit of its creditors generally or
                       any class of creditors.

        15.1.11  INSOLVENCY PROCEEDINGS: Any person takes any action or any
                 legal proceedings are started or other procedural steps taken
                 (including the presentation of a petition) for:

                 (i)   any Group Company (other than a Dormant Subsidiary) to be
                       adjudicated or found insolvent; or

                 (ii)  the winding-up or dissolution of any Group Company other
                       than (A) in respect of a Dormant Subsidiary, (B) in
                       connection with a solvent reconstruction, the terms of
                       which have been previously approved in writing by the
                       Majority Lenders, (C) (excluding the Guarantor)
                       contemplated by or required in connection with the
                       Demerger provided that no such winding up or dissolution
                       would be reasonably likely to have a Material Adverse
                       Effect or (D) a winding-up petition which is frivolous or
                       vexatious and which is, in any event, discharged within
                       21 days of its presentation and before it is advertised;
                       or

                 (iii) the appointment of a trustee, receiver, administrative
                       receiver or similar officer in respect of (A) any Group
                       Company or (B) a Substantial Portion of the assets of the
                       Group.

        15.1.12  ADJUDICATION OR APPOINTMENT: Any adjudication, order or
                 appointment is made under or in relation to any of the
                 proceedings referred to in Clause 15.1.10 (INABILITY TO PAY
                 DEBTS) or Clause 15.1.11 (INSOLVENCY PROCEEDINGS).

                                     - 44 -	

        15.1.13  ADMINISTRATION ORDER: (other than an application which is
                 frivolous or vexatious and which is, in any event, discharged
                 within 21 days of being made), an application is made to the
                 court for an administration order under the Insolvency Act 1986
                 with respect to any Group Company (other than a Dormant
                 Subsidiary)

        15.1.14  ANALOGOUS PROCEEDINGS: Any event occurs or proceeding is taken
                 with respect to any Group Company (other than a Dormant
                 Subsidiary) in any jurisdiction to which it is subject which
                 has an effect equivalent or similar to any of the events
                 mentioned in Clause 15.1.8 (ATTACHMENT OR DISTRESS), 15.1.10
                 (INABILITY TO PAY DEBTS), 15.1.11 (INSOLVENCY PROCEEDINGS),
                 15.1.12 (ADJUDICATION OR APPOINTMENT), 15.1.13 (ADMINISTRATION
                 ORDER).

        15.1.15  EXPROPRIATION: Any court, government or government agency shall
                 condemn, seize or otherwise appropriate, or take custody or
                 control of (each an "EXPROPRIATION"), all or any portion of the
                 assets of any Group Company which, when taken together with all
                 other assets of the Group Companies so condemned, seized,
                 appropriated or taken custody or control of, during the 12
                 month period ending with the month in which any such
                 Expropriation occurs, constitutes a Substantial Portion.

        15.1.16  QUALIFICATION OF ACCOUNTS: The auditors of the Guarantor issue
                 any qualification in respect of the Accounts of the Guarantor
                 for any of its Financial Years where the circumstances to which
                 such qualification relates have, or could reasonably be
                 expected to have, a Material Adverse Effect.

        15.1.17  BORROWERS: Any of the Borrowers is not, or ceases to be, a
                 Wholly-Owned Subsidiary of the Guarantor.

15.2    ACCELERATION

        If a Default occurs and remains unremedied the Agent may, and shall if
        so instructed by the Majority Lenders, by notice (a "DEFAULT NOTICE") to
        the Guarantor:

        15.2.1   cancel the Facilities and require the Borrowers immediately to
                 repay all Advances together with accrued interest and all other
                 sums payable under this Agreement, whereupon they shall become
                 immediately due and payable; or

        15.2.2   place the Facilities on demand, whereupon all Advances together
                 with accrued interest and all other sums payable under this
                 Agreement shall become repayable on demand made by the Agent on
                 the instructions of the Majority Lenders.

        Upon the service of any Default Notice the Lenders' obligations under
        this Agreement shall be terminated and the Commitment of each Lender
        shall be cancelled.

15.3    DEMERGER

        The Lenders confirm that any waiver or consent requested by the
        Guarantor due to the fact that any steps or transactions required to be
        taken by it or any company in the Group for the purpose of completing
        the Demerger are not permitted by or would cause a breach of this
        Agreement shall be considered by the Lenders in good faith. There will
        be no obligation on the Lenders to give such waiver or consent.

                                     - 45 -	

16      SET-OFF

        Without prejudice to their rights at law, any time while a Default has
        occurred and is continuing, the Agent and each Lender may set-off any
        matured obligation owed by an Obligor under any Financing Document
        against any matured obligation owed by the Agent or the relevant Lender
        to that Obligor, regardless of the place of payment, booking branch or
        currency of either obligation. If the obligations are in different
        currencies, the Agent or the relevant Lender may convert either
        obligation at the spot rate of exchange of the Agent or the relevant
        Lender, as the case may be, for the purpose of the set-off.

17      PRO RATA SHARING

17.1    REDISTRIBUTION

        If any amount owing by an Obligor under this Agreement to a Lender (the
        "SHARING LENDER") is discharged by voluntary or involuntary payment,
        set-off or in any other manner other than through the Agent in
        accordance with Clause 10 (PAYMENTS), then:

        17.1.1   the Sharing Lender shall immediately notify the Agent of the
                 amount discharged and the manner of its receipt or recovery;

        17.1.2   the Agent shall determine whether the amount discharged is in
                 excess of the amount which the Sharing Lender would have
                 received had the amount discharged been received by the Agent
                 and distributed in accordance with Clause 10 (PAYMENTS);

        17.1.3   the Sharing Lender shall pay the Agent an amount equal to that
                 excess (the "EXCESS AMOUNT") within 5 Business Days of demand
                 by the Agent;

        17.1.4   the Agent shall treat the excess amount as if it were a payment
                 by an Obligor under Clause 10 (PAYMENTS) and shall pay the
                 excess amount to the Lenders (other than the Sharing Lender) in
                 accordance with Clause 10.7 (PARTIAL PAYMENTS); and

        17.1.5   as between the relevant Obligor and the Sharing Lender the
                 excess amount shall be treated as not having been received or
                 recovered, and accordingly that Obligor shall owe the Sharing
                 Lender an immediately payable debt equal to the excess amount.

17.2    LEGAL PROCEEDINGS

        Notwithstanding Clause 17.1 (REDISTRIBUTION), no Sharing Lender shall be
        obliged to share any excess amount which it receives or recovers
        pursuant to legal proceedings taken by it to recover any sums owing to
        it under this Agreement with any other Lender which has a legal right
        to, but does not, either join in such proceedings or commence and
        diligently pursue separate proceedings to enforce its rights, unless the
        proceedings instituted by the Sharing Lender are instituted by it
        without prior notice having been given to such Lender through the Agent
        and an opportunity to such Lender to join in such proceedings.

17.3    REVERSAL OF REDISTRIBUTION

        If any excess amount subsequently has to be wholly or partly refunded to
        a Borrower by a Sharing Lender which has paid an amount equal to that
        excess amount to the Agent under Clause 17.1 (REDISTRIBUTION), each
        Lender to which any part of that amount was distributed

                                     - 46 -	

        shall on request from the Sharing Lender repay to the Sharing Lender
        such Lender's proportionate share of the amount which has to be so
        refunded by the Sharing Lender.

17.4    INFORMATION

        Each Lender shall on request supply to the Agent such information as the
        Agent may from time to time request for the purpose of this Clause 17.

18      THE ARRANGER, THE AGENT AND THE LENDERS

18.1    APPOINTMENT AND DUTIES

        18.1.1   Each Lender irrevocably appoints the Agent to act as its agent
                 in connection with this Agreement and irrevocably authorises
                 the Agent on its behalf to perform the duties and to exercise
                 the rights, powers and discretions that are specifically
                 delegated to it under or in connection with this Agreement
                 together with any other incidental rights, powers and
                 discretions.

        18.1.2   The Agent shall have no duties or responsibilities except those
                 expressly set out in this Agreement. As to any matters not
                 expressly provided for, the Agent shall act in accordance with
                 the instructions of the Majority Lenders (but in the absence of
                 any such instructions shall not be obliged to act). Any such
                 instructions, and any action taken by the Agent in accordance
                 with those instructions, shall be binding upon all the Lenders.	

18.1.3 The Agent may:
(i) act in an agency, trustee, fiduciary or other capacity on

                       behalf of any other banks or financial institutions
                       providing facilities to any Group Company or any
                       associated company of a Group Company, as freely in all
                       respects as if it had not been appointed to act as agent
                       and/or trustee for the Lenders under this Agreement and
                       without regard to the effect on the Lenders of acting in
                       such capacity; and

                 (ii)  subscribe for, hold, be beneficially entitled to or
                       dispose of shares or securities, or options or other
                       rights to and interests in shares or securities in any
                       Group Company or any associated company of a Group
                       Company (in each case, without liability to account).

        18.1.4   Each division or department of the Agent (including, for so
                 long as Citibank International plc is the Agent, the European
                 Loans Agency department of Citibank International plc) shall be
                 treated as a separate entity from any other division or
                 department of the Agent. If any of the Agent's divisions or
                 departments (including, in the case of Citibank International
                 plc, its European Loans Agency department) should act for any
                 Group Company in any capacity (whether as bankers or otherwise)
                 in relation to any other matter, any information given by any
                 Group Company to any such division or department may be treated
                 as confidential and the Agent shall, as between itself and the
                 Lenders, not be obliged to disclose the same to any Lender or
                 any other person.

        18.1.5   It is acknowledged that the role of the Arranger is and has
                 been confined solely to arranging the Facilities and that it
                 does not act as agent of any Lender and that in such capacity
                 it shall have no obligations and liabilities in relation to
                 this Agreement.

                                     - 47 -	

18.2    PAYMENTS

        18.2.1   The Agent shall promptly account to the Lending Office of each
                 Lender for such Lender's due proportion of all sums received by
                 the Agent for such Lender's account, whether by way of
                 repayment or prepayment of principal or payment of interest,
                 fees or otherwise.

        18.2.2   The Agent shall maintain a memorandum account showing the
                 principal amount of each Advance outstanding under this
                 Agreement and the amount of each Lender's Participation in the
                 Advances.

        18.2.3   Each Lender confirms in favour of the Agent that, unless it
                 notifies the Agent to the contrary, it will be the beneficial
                 owner of any interest paid to it under this Agreement, and it
                 will be within the charge to United Kingdom corporation tax as
                 respects that interest.

18.3    DEFAULT

        The Agent shall not be obliged to monitor or enquire as to whether or
        not a Default or Potential Default has occurred. The Agent shall be
        entitled to assume that no Default or Potential Default has occurred
        unless it receives notice to the contrary from a Borrower or any Lender
        describing the Default or Potential Default and stating that such notice
        is a "Default Notice" or unless it is aware of a payment default under
        this Agreement, in which case it shall promptly notify each Lender.

18.4    RELIANCE

        The Agent may:

        18.4.1   rely on any communication or document believed by it to be
                 genuine and correct and to have been communicated or signed by
                 the person by whom it purports to be communicated or signed;
                 and

        18.4.2   engage, pay for and rely on the advice of any professional
                 advisers selected by it given in connection with the Financing
                 Documents or any of the matters contemplated by the Financing
                 Documents,

        and shall not be liable to any Party for any of the consequences of such
        reliance.

18.5    LEGAL PROCEEDINGS

        18.5.1   The Agent shall not be obliged to take or commence any legal
                 action or proceeding against a Borrower or any other person
                 arising out of or in connection with the Financing Documents
                 until it shall have been indemnified or secured to its
                 satisfaction against all costs, claims and expenses (including
                 any costs award which may be made against it as a result of any
                 such legal action or proceeding not being successful) which it
                 may expend or incur in such legal action or proceeding.

        18.5.2   The Agent may refrain from doing anything which might in its
                 opinion constitute a breach of any law or any duty of secrecy
                 or confidentiality or be otherwise actionable at the suit of
                 any person.

18.6    NO LIABILITY

        18.6.1   Neither the Agent nor any of its officers, employees or agents
                 shall be liable for any action taken or not taken by it or any
                 of them under or in connection with the

                                     - 48 -	

                 Financing Documents unless directly caused by its or their
                 negligence, wilful misconduct or breach of this Agreement.

        18.6.2   Neither the Agent nor the Arranger shall be responsible for any
                 statements, representations or warranties in this Agreement or
                 for any information supplied or provided to any Lender by the
                 Agent or the Arranger in respect of an Obligor or any other
                 person or for any other matter relating to this Agreement or
                 for the execution, genuineness, validity, legality,
                 enforceability or sufficiency of this Agreement or any other
                 document referred to in this Agreement or for the
                 recoverability of all or any of the Advances or any of the
                 other sums to become due and payable under the Financing
                 Documents.

18.7    CREDIT DECISIONS	

18.7.1 Each Lender:
(i) acknowledges that it has, independently and without

               reliance on the Agent or the Arranger, made its own
               analysis of the transaction contemplated by, and reached
               its own decision to enter into, this Agreement and made
               its own investigation of the financial condition and
               affairs and its own appraisal of the creditworthiness of
               the Borrowers and any surety for the Borrowers'
               obligations; and

         (ii)  agrees that it shall continue to make its own independent
               appraisal of the creditworthiness of the Borrowers and
               any surety for the Borrowers' obligations.

18.7.2   Each Lender agrees that it shall, independently and without
         reliance on the Agent or the Arranger, make its own decision to
         take or not take action under this Agreement.	

18.8 INFORMATION

18.8.1   The Agent shall provide the Lenders with all information and
         copies of all notices which by the terms of this Agreement are
         to be provided or given to the Lenders.

18.8.2   Except as specifically provided in this Agreement, the Agent
         shall not be under any duty or obligation:

         (i)   either initially or on a continuing basis, to provide any
               Lender with any credit information or other information
               with respect to the financial condition of the Obligors
               or which is otherwise relevant to the Facilities; or

         (ii)  to request or obtain any certificate, document or
               information from an Obligor unless specifically requested
               to do so by a Lender in accordance with this Agreement.	

18.9 RELATIONSHIP WITH LENDERS

        18.9.1   In performing its functions and duties under this Agreement,
                 the Agent shall act solely as the agent for the Lenders and
                 except as expressly provided in this Agreement shall not be
                 deemed to be acting as trustee for any Lender and shall not
                 assume or be deemed to have assumed any obligation as agent or
                 trustee for, or any relationship of agency or trust with, any
                 Obligor.

                                     - 49 -	

        18.9.2   Neither the Agent, the Arranger nor any Lender shall be under
                 any liability or responsibility of any kind to an Obligor or
                 any other Lender arising out of or in relation to any failure
                 or delay in performance or breach by an Obligor or any other
                 Lender of any of its or their respective obligations under this
                 Agreement.

18.10   AGENT'S POSITION

        18.10.1  With respect to its own Participation in an Advance, the Agent
                 shall have the same rights and powers under and in respect of
                 this Agreement as any other Lender and may exercise those
                 rights and powers as though it were not also acting as agent
                 for the Lenders. The Agent may, without liability to account,
                 accept deposits from, lend money to and generally engage in any
                 kind of banking, finance, advisory, trust or other business
                 with or for a Borrower as if it were not the agent or the
                 trustee for the Lenders under this Agreement.

        18.10.2  The Agent may retain for its own use and benefit (and shall not
                 be liable to account to any Lender for all or any part of) any
                 sums received by it by way of agency or management or
                 arrangement fees or by way of reimbursement of expenses
                 incurred by it.

18.11   INDEMNITY

        Each Lender shall immediately on demand indemnify the Agent ((to the
        extent not reimbursed by the Obligors) rateably according to the
        proportion which its Commitment bears to the Total Commitments) from and
        against all liabilities, losses and expenses of any kind or nature
        whatsoever in any way relating to or arising out of this Agreement
        (except in respect of any agency, management or other fee due to the
        Agent) which may be incurred by the Agent in its capacity as agent or
        trustee for the Lenders or any action taken or omitted by the Agent in
        enforcing or preserving the rights of the Lenders or the Agent under
        this Agreement, provided that no Lender shall be liable for any portion
        of such liabilities, losses or expenses resulting from the Agent's gross
        negligence or wilful misconduct. The Obligors shall reimburse each
        Lender on demand in full in respect of any amount paid to the Agent by
        such Lender under this Clause 18.11.

18.12   REMOVAL AND RESIGNATION OF THE AGENT

        18.12.1  The Majority Lenders may, by giving at least 60 days' notice to
                 the Agent, remove the Agent and replace it with a successor
                 Agent approved by the Guarantor (such approval not to be
                 unreasonably withheld).

        18.12.2  The Agent may, following consultation with the Guarantor,
                 resign and appoint one of its Affiliates acting through an
                 office in London, as successor by giving notice to the Lenders
                 and the Guarantor.

        18.12.3  Alternatively to the resignation under Clause 18.12.2, the
                 Agent may resign by giving at least 60 days' notice to the
                 Guarantor and each Lender. Upon receipt of a notice of
                 resignation the Guarantor and the Majority Lenders may select
                 any bank or other financial institution as successor Agent.

        18.12.4  If no bank or other financial institution selected by the
                 Guarantor and the Majority Lenders shall have accepted such
                 appointment within 20 days after the Agent has given a notice
                 of resignation in accordance with Clause 18.12.3, then the
                 Majority Lenders may, after consultation with the Guarantor,
                 appoint any bank or other financial institution as successor
                 Agent.

                                     - 50 -	

        18.12.5  If no bank or other financial institution selected by the
                 Majority Lenders shall have accepted such appointment within 40
                 days after the Agent has given a notice of resignation in
                 accordance with Clause 18.12.3, then the resigning Agent may,
                 after consultation with the Guarantor, appoint any bank or
                 other financial institution with an office in London as
                 successor Agent.

        18.12.6  The resignation or removal of the Agent and the appointment of
                 any successor Agent shall both become effective only upon the
                 successor Agent notifying the resigning Agent, the Guarantor
                 and each Lender that it accepts its appointment. On such
                 notification:

                 (i)   the resigning Agent shall be discharged from its
                       obligations and duties as Agent under this Agreement but
                       it shall continue to be able to rely on the provisions of
                       this Clause 18 in respect of all matters relating to the
                       period of its appointment; and

                 (ii)  the successor Agent shall assume the role of Agent and
                       shall have all the rights, powers, discretions and duties
                       which the Agent has under the Financing Documents.

        18.12.7  The resigning Agent shall make available to the successor Agent
                 all records and documents held by it as Agent, and shall
                 co-operate with the successor Agent to ensure an orderly
                 transition.

18.13   CHANGE OF OFFICE

        The Agent may at any time in its sole discretion by notice to the
        Guarantor and each Lender designate a different office in the United
        Kingdom from which its duties as the Agent will be performed.

19      FEES AND EXPENSES

19.1    EXPENSES

        The Guarantor shall on demand pay all expenses incurred (including
        reasonable legal, valuation and accounting fees but in relation to
        paragraphs Clauses 19.1.1, 19.1.2 and 19.1.3 below only to the extent
        the same are reasonable in amount and subject to the limits agreed in
        the Fees Letter), and any VAT on those expenses:

        19.1.1   by the Agent in connection with the negotiation, preparation
                 and execution of the Financing Documents and the other
                 documents contemplated by the Financing Documents;

        19.1.2   by the Agent in respect of the syndication of the Facilities;

        19.1.3   by the Agent or the Lenders in connection with the granting of
                 any release, waiver or consent or in connection with any
                 amendment or variation of any Financing Document; and

        19.1.4   by the Agent or the Lenders in enforcing, perfecting,
                 protecting or preserving (or attempting so to do) any of their
                 rights, or in suing for or recovering any sum due from a
                 Borrower or any other person under any Financing Document.	

- 51 -

19.2    ARRANGEMENT, AGENCY AND PARTICIPATION FEES

        The Guarantor shall pay to the Arranger arrangement and participation
        fees and to the Agent agency fees in accordance with the terms of the
        Fees Letter.

19.3    COMMITMENT FEE

        19.3.1   The Guarantor shall pay a commitment fee in euros to the Agent
                 for the account of the Lenders on the Available Revolving
                 Credit Facility and Available 364 Day Facility. The commitment
                 fee shall be calculated at a rate equal to the Applicable Rate
                 (as defined in Clause 19.3.2) on a day to day basis and a 360
                 day year in respect of the Revolving Commitment Period or, as
                 the case may be, the 364 Day Commitment Period (including any
                 extension under Clause 8.6 (EXTENSIONS TO 364 DAY COMMITMENT
                 PERIOD)) and shall be payable in arrear at the end of each
                 successive period of 3 months commencing on the date of this
                 Agreement and also on the last day of the Revolving Credit
                 Commitment Period or, as the case may be, the 364 Day
                 Commitment Period, or on any earlier date on which the Total
                 Revolving Credit Commitments or, as the case may be, the Total
                 364 Day Commitments equals zero.	

19.3.2 On any day the "APPLICABLE RATE" in relation to:
(i) the Revolving Credit Facility shall be the percentage rate per annum set out in Column B below; and
(ii) the 364 Day Facility shall be the percentage rate per annum set out in Column C below,
in each case, opposite the Debt Rating Level of the Guarantor at the opening of business in London on such date set out in Column A below:

COLUMN A                   COLUMN B                         COLUMN C

DEBT RATING LEVEL          REVOLVING CREDIT FACILITY        364 DAY FACILITY
                           PERCENTAGE PER ANNUM             PERCENTAGE PER ANNUM
Level 1                    0.1625                           0.09

Level 2                    0.1875                           0.10

Level 3                    0.2625                           0.14	

provided that if on such date :
(a) the Debt Rating Level given by one of S&P or Moody's is Level 1 and by the other of S&P or Moody's is Level 2, Level 1 shall be the Debt Rating Level; or
(b) the Debt Rating Level given by one of S&P or Moody's is Level 2 and by the other of S&P or Moody's is Level 3, Level 2 shall be the Debt Rating Level; or
(c) the Debt Rating given by one of S&P or Moody's is Level 1 and by the other of S&P or Moody's is Level 3, Level 2 shall be the Debt Rating Level.
- 52 -

19.4 UTILISATION FEE

        19.4.1   Subject to Clause 19.4.2 below, the Guarantor shall pay a
                 utilisation fee in euros to the Agent for the account of the
                 Lenders on the aggregate amount of the outstanding Advances.
                 The utilisation fee shall be calculated at a rate equal to
                 0.025 per cent. per annum of the aggregate amount of the
                 outstanding Advances on a day to day basis and a 360 day year
                 and shall be payable in arrear at the end of each successive
                 period of 3 months commencing on the date of this Agreement.

        19.4.2   The utilisation fee will be payable whenever the aggregate
                 amount of the outstanding Advances exceeds 50 per cent. of the
                 Total Commitments.

19.5    DOCUMENTARY TAXES INDEMNITY

        All stamp, documentary, registration or other like duties or Taxes,
        including any penalties, additions, fines, surcharges or interest
        relating to those duties and Taxes, which are imposed or chargeable on
        or in connection with, or arising as a consequence of any Financing
        Document (for the avoidance of doubt, other than any Transfer
        Certificate) shall be paid by the Guarantor. The Agent shall be entitled
        but not obliged to pay any such duties or Taxes (whether or not they are
        its primary responsibility). If the Agent does so the Guarantor shall on
        demand indemnify the Agent against those duties and Taxes and against
        any costs and expenses incurred by the Agent in discharging them.

19.6    VAT

        19.6.1   All payments made by an Obligor under the Financing Documents
                 are calculated without regard to VAT. If any such payment
                 constitutes the whole or any part of the consideration for a
                 taxable or deemed taxable supply (whether that supply is
                 taxable pursuant to the exercise of an option or otherwise) by
                 the Agent or a Lender, the amount of that payment shall be
                 increased by an amount equal to the amount of VAT which is
                 chargeable in respect of the taxable supply in question.

        19.6.2   No payment or other consideration to be made or furnished to an
                 Obligor by the Agent or a Lender pursuant to or in connection
                 with this Agreement or any transaction or document contemplated
                 in this Agreement may be increased or added to by reference to
                 (or as a result of any increase in the rate of) any VAT which
                 shall be or may become chargeable in respect of any taxable
                 supply.

19.7    INDEMNITY PAYMENTS

        Where in this Agreement an Obligor has an obligation to indemnify or
        reimburse the Agent or a Lender in respect of any loss or payment, the
        calculation of the amount payable by way of indemnity or reimbursement
        shall take account of the likely Tax treatment in the hands of the Agent
        or the relevant Lender, as the case may be (as determined by the
        relevant party's auditors) of the amount payable by way of indemnity or
        reimbursement and of the loss or payment in respect of which that amount
        is payable.

20      AMENDMENTS AND WAIVERS

20.1    MAJORITY LENDERS

        20.1.1   Subject to Clause 20.2 (ALL LENDERS), any term of this
                 Agreement may be amended or waived with the written agreement
                 of the Guarantor, the Majority Lenders and

                                     - 53 -	

                 the Agent. The Agent may effect, on behalf of the Majority
                 Lenders, an amendment or waiver to which the Majority Lenders
                 have agreed.

        20.1.2   The Agent shall promptly notify the Guarantor and each Lender
                 of any amendment or waiver effected under Clause 20.1.1 and any
                 such amendment or waiver shall be binding on the Obligors and
                 each Lender.

20.2    ALL LENDERS

        An amendment or waiver which relates to:

        20.2.1   the definition of "Majority Lenders" in Clause 1.1 (DEFINITIONS
                 AND INTERPRETATION);

        20.2.2   an extension of the date for, or a decrease in an amount or a
                 change in the currency of, any payment under this Agreement;

        20.2.3   an increase in a Lender's Commitment;

        20.2.4   a term of this Agreement which expressly requires the consent
                 of each Lender;

        20.2.5   Clause 7 (INTEREST), 8 (REPAYMENT, PREPAYMENT'S CANCELLATION
                 AND EXTENSION), 11 (GUARANTEE) or 17 (PRO RATA SHARING) or this
                 Clause 20 (AMENDMENTS AND WAIVERS); or

        20.2.6   an extension of the Revolving Credit Commitment Period,	

may not be effected without the prior written consent of each Lender.
20.3 CHANGE IN CURRENCY

20.3.1   Unless otherwise prohibited by law, if more than one currency
         or currency unit are at the same time recognised by the central
         bank of any country as the lawful currency of that country,
         then:

         (i)   any reference in the Financing Documents to, and any
               obligations arising under the Financing Documents in, the
               currency of that country shall be translated into, or
               paid in, the currency or currency unit of that country
               designated by the Agent (after consultation with the
               Guarantor); and

         (ii)  any translation from one currency or currency unit to
               another shall be at the official rate of exchange
               recognised by the central bank for the conversion of that
               currency or currency unit into the other, rounded up or
               down by the Agent (acting reasonably).

20.3.2   If a change in any currency of a country occurs, this Agreement
         will, to the extent the Agent (acting reasonably and after
         consultation with the Guarantor) specifies to be necessary, be
         amended to comply with any generally accepted conventions and
         market practice in the relevant interbank market and otherwise
         to reflect the change in currency.	

20.4 NO IMPLIED WAIVERS; REMEDIES CUMULATIVE
The rights of the Agent and each Lender under the Financing Documents:

20.4.1   may be exercised as often as necessary;

20.4.2   are cumulative and not exclusive of its rights under the
         general law; and

20.4.3   may be waived only in writing and specifically.	

- 54 -

        Delay in exercising or non-exercise of any such right is not a waiver of
        that right.

21      MISCELLANEOUS

21.1    SEVERANCE

        If any provision of the Financing Documents is or becomes illegal,
        invalid or unenforceable in any jurisdiction, that shall not affect:

        21.1.1   the legality, validity or enforceability in that jurisdiction
                 of any other provision of this Agreement; or

        21.1.2   the legality, validity or enforceability in any other
                 jurisdiction of that or any other provision of the Financing
                 Documents.

21.2    COUNTERPARTS

        This Agreement may be executed in any number of counterparts and this
        shall have the same effect as if the signatures on the counterparts were
        on a single copy of this Agreement.

22      NOTICES

22.1    METHOD

        Each notice or other communication to be given under this Agreement
        shall be given in writing in English and, unless otherwise provided,
        shall be made by telex, fax or letter.

22.2    DELIVERY

        Any notice or other communication to be given by one Party to another
        under this Agreement shall (unless one Party has by 15 days' notice to
        the other Party specified another address) be given to that other Party,
        in the case of any of the Obligors and the Agent, at the respective
        addresses given in Clause 22.3 and in the case of the Lenders, at the
        respective addresses notified to the Agent in writing prior to the date
        on which it becomes a Party and, in the case of any new Borrower as set
        out in the schedule to its relevant Deed of Accession.

22.3    ADDRESSES

        The address, telex number and fax number of the Obligors and Agent are:

        22.3.1   the Obligors:

                 c/o Aon Finance Limited
                 8 Devonshire Square
                 London EC2M 4PL	

Attention: Jane Owen Aon Law Division Fax: 020 7216 3225
Copy to:
Aon Corporation
200 E. Randolph Street, 4th Floor Chicago
- 55 -

Illinois 60601
U.S.A.
Attention: Diane Aigotti/Ron Buetow Fax: 001 312 381 6060
and
AON Corporation
200 E. Randolph Street
Chicago
Illinois 60601
U.S.A

                 Attention: Richard E Barry, Senior Counsel
                 Fax:       001 312 381 6165

        22.3.2   the Agent:

                 Loans Agency
                 Riverdale House
                 Floor 3
                 68 Molesworth Street
                 London SE13 7EU

                 Attention: Loans Agency
                 Telex:     299831
                 Fax:       020 7500 4482

22.4    DEEMED RECEIPT

        22.4.1   Any notice or other communication given by the Agent shall be
                 deemed to have been received:

                 (i)   if sent by telex with the relevant answerback appearing
                       at the beginning and end of the telex, on the day on
                       which transmitted;

                 (ii)  if sent by fax, with a confirmed receipt of transmission
                       from the receiving machine, on the day on which
                       transmitted;

                 (iii) in the case of a written notice given by hand, on the day
                       of actual delivery; and

                 (iv)  if posted, on the second Business Day or, in the case of
                       airmail, the fifth Business Day following the day on
                       which it was despatched by first class mail postage
                       prepaid or, as the case may be, airmail postage prepaid,

                 provided that a notice given in accordance with the above but
                 received on a day which is not a Business Day or after normal
                 business hours in the place of receipt shall only be deemed to
                 have been received on the next Business Day.

        22.4.2   Any notice or other communication given to the Agent shall be
                 deemed to have been given only on actual receipt.	

- 56 -

22.5    NOTICES THROUGH AGENT

        Any notice or other communication from or to an Obligor under this
        Agreement shall be sent through the Agent.

22.6    NOTICES THROUGH AON UK

        Any notices or other communication under this Agreement from or to an
        Obligor shall be sent through Aon UK which shall act as agent on behalf
        of each of the Obligors in such respect.

22.7    ELECTRONIC COMMUNICATION

        22.7.1   Any communication to be made between the Agent and a Lender
                 under or in connection with the Financing Documents may be made
                 by electronic mail or other electronic means, if the Agent and
                 the relevant Lender:

                 (i)   agree that, unless and until notified to the contrary,
                       this is to be an accepted form of communication;

                 (ii)  notify each other in writing of their electronic mail
                       address and/or any other information required to enable
                       the sending and receipt of information by that means; and

                 (iii) notify each other of any change to their address or any
                       other such information supplied by them.

        22.7.2   Any electronic communication made between the Agent and a
                 Lender will be effective only when actually received in
                 readable form and in the case of any electronic communication
                 made by a Lender to the Agent only if it is addressed in such a
                 manner as the Agent shall specify for this purpose.

23      ASSIGNMENTS AND TRANSFERS

23.1    BENEFIT OF AGREEMENT

        This Agreement shall be binding upon and ensure to the benefit of each
        Party and its successors and assigns.

23.2    ASSIGNMENTS AND TRANSFERS BY BORROWER

        No Obligor shall be entitled to assign or transfer any of its rights or
        obligations under the Financing Documents.

23.3    ASSIGNMENTS BY LENDERS

        Subject to Clause 23.5 (ASSIGNMENT AND TRANSFER REQUIREMENTS), any
        Lender may assign any of its rights and benefits under this Agreement to
        another bank or other financial institution, and provided that until the
        assignee has confirmed to the Agent and the other Lenders that it shall
        be under the same obligations towards each of them as it would have been
        under if it had been a party to this Agreement as a Lender, the Agent
        and the other Lenders shall not be obliged to recognise the assignee as
        having the rights against each of them which it would have had if it had
        been such a party to this Agreement.

                                     - 57 -	

23.4    TRANSFERS BY LENDERS

        23.4.1   Subject to Clause 23.5 (ASSIGNMENT AND TRANSFER REQUIREMENTS),
                 any Lender may transfer, in accordance with this Clause 23.4,
                 any of its rights and obligations under this Agreement.

        23.4.2   If any Lender (the "EXISTING LENDER") wishes to transfer all or
                 any part of its Commitment or Participation in Advances to
                 another bank or other financial institution (the "LENDER
                 TRANSFEREE"), such transfer may be effected by way of a
                 novation by the delivery to, and the execution by, the Agent of
                 a duly completed Transfer Certificate.	

23.4.3 On the date specified in the Transfer Certificate:
(i) to the extent that in the Transfer Certificate the

                       Existing Lender seeks to transfer its Commitment or
                       Participation in Advances, the Obligors and the Existing
                       Lender shall each be released from further obligations to
                       each other under this Agreement and their respective
                       rights against each other shall be cancelled (such rights
                       and obligations being referred to in this Clause 23.4.3
                       as "DISCHARGED RIGHTS AND OBLIGATIONS");

                 (ii)  the Obligors and the Lender Transferee shall each assume
                       obligations towards each other and/or acquire rights
                       against each other which differ from the Discharged
                       Rights and Obligations only insofar as the Obligors and
                       the Lender Transferee have assumed and/or acquired the
                       same in place of the Obligors and the Existing Lender;
                       and

                 (iii) each of the Parties and the Lender Transferee shall
                       acquire the same rights and assume the same obligations
                       among themselves as they would have acquired and assumed
                       had the Lender Transferee been a party under this
                       Agreement as a Lender with the rights and/or the
                       obligations acquired or assumed by it as a result of the
                       transfer.

        23.4.4   The Agent shall promptly complete a Transfer Certificate on
                 request by an Existing Lender and upon payment by the Lender
                 Transferee of a fee of $1,500 to the Agent. Each Obligor and
                 each Lender irrevocably authorises the Agent to execute any
                 duly completed Transfer Certificate on its behalf provided that
                 such authorisation does not extend to the execution of a
                 Transfer Certificate on behalf of either the Existing Lender or
                 the Lender Transferee named in the Transfer Certificate.

        23.4.5   The Agent shall promptly notify the Guarantor of the receipt
                 and execution on its behalf by the Agent of any Transfer
                 Certificate.

23.5    ASSIGNMENT AND TRANSFER REQUIREMENTS

        In relation to any assignment or transfer under this Clause 23:

        23.5.1   such assignment or transfer must be in respect of a Commitment
                 of at least EURO 10,000,000 or, if less, the whole Commitment
                 of the assignee or transferee; and

        23.5.2   such assignment or transfer may be of the assignor's or
                 transferor's Revolving Credit Commitment and/or 364 Day
                 Commitment, in any proportion; and

        23.5.3   unless such assignment or transfer is to an Affiliate of the
                 assignor or transferor incorporated in the same jurisdiction as
                 the assignor and transferor or to another

                                     - 58 -	

                 Lender, the prior consent of the Guarantor shall have been
                 obtained (such consent not to be unreasonably withheld or
                 delayed).

        23.5.4   if any Lender assigns its rights under this Agreement a written
                 instrument by which such rights are assigned must be notified
                 to any Borrower incorporated in France by bailiff ("HUISSIER")
                 in accordance with the provision of article 1690 of the French
                 Civil Code at the cost of the Lender concerned.

23.6    CONSEQUENCES OF TRANSFER

        The Obligors shall be under no obligation to pay any greater amount
        under this Agreement (including, any amounts which would otherwise be
        payable by such Borrower under Clause 10.9 (GROSSING-UP) or Clause 9.2
        (INCREASED COSTS)) following an assignment or transfer by a Lender of
        any of its rights or obligations pursuant to this Clause 23 if, in the
        circumstances existing at the time of such assignment or transfer, such
        greater amount would not have been payable but for the assignment or
        transfer.

23.7    SUB-PARTICIPATION

        Each Lender may at any time sub-participate any of its rights and/or
        obligations under this Agreement.

23.8    DISCLOSURE OF INFORMATION

        In addition to their rights of disclosure at law, the Agent and each
        Lender may disclose to each other, to their Affiliates, to their
        professional advisers, their auditors, any relevant regulator or to any
        actual or potential assignee, transferee or sub-participant any
        information which the Agent or that Lender has acquired under or in
        connection with any Financing Document subject (other than in the case
        of disclosure required by law or to a regulator) to the recipient
        agreeing to treat the relevant information as confidential.

24      INDEMNITIES

24.1    BREAKAGE COSTS INDEMNITY

        The Guarantor shall indemnify each Lender on demand against any loss or
        expense (including any loss or expense on account of funds borrowed,
        contracted for or utilised to fund any amount payable under this
        Agreement, any amount repaid or prepaid under this Agreement or any
        Advance) which that Lender has sustained or incurred as a consequence
        of:

        24.1.1   an Advance not being made following the service of a Drawdown
                 Notice (except as a result of the failure of that Lender to
                 comply with its obligations under this Agreement);

        24.1.2   the operation of Clause 6.2 (NO ALTERNATIVE CURRENCY);

        24.1.3   the failure of an Obligor to make payment on the due date of
                 any sum due under this Agreement;

        24.1.4   the occurrence of any Default or the operation of Clause 15.2
                 (ACCELERATION); or

        24.1.5   any repayment or prepayment of an Advance (other than pursuant
                 to Clause 9.1.2 otherwise than on the last day of the Interest
                 Period in relation to that Advance.	

- 59 -

24.2 CURRENCY INDEMNITY

        24.2.1   Any payment made to or for the account of or received by the
                 Agent or any Lender in respect of any moneys or liabilities
                 due, arising or incurred by an Obligor to the Agent or any
                 Lender in a currency (the "CURRENCY OF PAYMENT") other than the
                 currency in which the payment should have been made under this
                 Agreement (the "CURRENCY OF OBLIGATION") in whatever
                 circumstances (including as a result of a judgment against that
                 Obligor) and for whatever reason shall constitute a discharge
                 to that Obligor only to the extent of the Currency of
                 Obligation amount which the Agent or that Lender, as the case
                 may be, is able on the date of receipt of such payment (or if
                 such date of receipt is not a Business Day, on the next
                 succeeding Business Day) to purchase with the Currency of
                 Payment amount at its spot rate of exchange (as conclusively
                 determined by the Agent or that Lender) in the London foreign
                 exchange market.

        24.2.2   If the amount of the Currency of Obligation which the Agent or
                 that Lender is so able to purchase falls short of the amount
                 originally due to the Agent or that Lender, as the case may be,
                 under this Agreement, then the relevant Obligor shall
                 immediately on demand indemnify the Agent or that Lender, as
                 the case may be, against any loss or damage arising as a result
                 of that shortfall by paying to the Agent or that Lender, as the
                 case may be, that amount in the Currency of Obligation
                 certified by the Agent or that Lender, as the case may be, as
                 necessary so to indemnify it.

24.3    GENERAL

        24.3.1   The indemnities in this Clause 24 shall constitute separate and
                 independent obligations from the other obligations contained in
                 this Agreement, shall give rise to separate and independent
                 causes of action, shall apply irrespective of any indulgence
                 granted from time to time and shall continue in full force and
                 effect notwithstanding any judgment or order for a liquidated
                 sum or sums in respect of amounts due under this Agreement or
                 under any such judgment or order.

        24.3.2   The certificate of the Agent or the relevant Lender as to the
                 amount of any loss or damage sustained or incurred by it shall
                 be conclusive and binding on the Obligors except for any
                 manifest error.

25      LAW AND JURISDICTION

25.1    LAW

        This Agreement is governed by and shall be construed in accordance with
        English law.

25.2    JURISDICTION

        25.2.1   The Parties agree that the courts of England shall have
                 jurisdiction to settle any disputes which may arise in
                 connection with any Financing Document and that any judgment or
                 order of an English court in connection with any Financing
                 Document is conclusive and binding on them and may be enforced
                 against them in the courts of any other jurisdiction. This
                 Clause 25.2.1 is for the benefit of the Agent, the Arranger and
                 each Lender only and shall not limit the right of the Agent and
                 each Lender to bring proceedings against an Obligor in
                 connection with any Financing

                                     - 60 -	

                 Document in any other court of competent jurisdiction or
                 concurrently in more than one jurisdiction.	

25.2.2 Each Obligor:
(i) waives any objections which it may have to the English

                       courts on the grounds of venue or forum non conveniens or
                       any similar grounds as regards proceedings in connection
                       with any Financing Document; and

                 (ii)  consents to service of process by mail or in any other
                       manner permitted by the relevant law.

25.3    AGENT FOR SERVICE

        Each Borrower which is not a "company" or an "overseas company" within
        the meaning of the Act (an "OVERSEAS BORROWER") shall at all times
        maintain an agent for service of process in England. That agent shall be
        AON UK of 8 Devonshire Square, London EC2M 4PL, Attention: Aon Law
        Division. Any writ, summons, judgment or other notice of legal process
        shall be sufficiently served on each Overseas Borrower if delivered to
        that agent at its address for the time being and marked for the
        attention of Aon Law Division. No Overseas Borrower shall revoke the
        authority of that agent. If for any reason any such agent no longer
        serves as agent of each Overseas Borrower to receive service of process,
        each Overseas Borrower shall promptly appoint another such agent and
        immediately advise the Agent of that appointment. AON UK hereby accepts
        its appointment as agent of each Overseas Borrower to receive service of
        process.	

IN WITNESS whereof the Parties have caused this Agreement to be duly executed on the date set out above.
- 61 -

SCHEDULE 1
THE LENDERS

LENDER                                                        REVOLVING CREDIT           364 DAY COMMITMENT
                                                              COMMITMENT (EURO)          (EURO)
Citibank NA                                                           21,750,000                 21,750,000

The Royal Bank of Scotland plc                                        21,750,000                 21,750,000

Banco Santander Central Hispano S.A.                                  18,500,000                 18,500,000

Bank of New York                                                      18,500,000                 18,500,000

Barclays Bank plc                                                     18,500,000                 18,500,000

Commerzbank Aktiengesellschaft, London Branch                         18,500,000                 18,500,000

ING Bank                                                              18,500,000                 18,500,000

Lloyds TSB Bank plc                                                   18,500,000                 18,500,000

The Hongkong and Shanghai Banking Corporation Limited                 18,500,000                 18,500,000

Banca di Roma S.P.A.                                                  12,000,000                 12,000,000

Bank Brussels Lambert                                                 12,000,000                 12,000,000

Bank ONE, NA                                                          12,000,000                 12,000,000

Natexis Banques Populaires                                            12,000,000                 12,000,000

RBC Finance B.V.                                                      12,000,000                 12,000,000

Standard Chartered Bank                                               12,000,000                 12,000,000

KBC Bank Nederland N.V.                                                5,000,000                  5,000,000	

- 62 -

SCHEDULE 2
CONDITIONS PRECEDENT
1 A Certified Copy of the certificate of incorporation (and any relevant certificate of incorporation on change of name) and the memorandum and articles of association or equivalent constitutional documents of each Obligor.
2 A Certified Copy of the board minutes and resolutions or equivalent corporate authority documentation in the relevant jurisdiction of each Obligor approving and authorising the execution, delivery and performance of the Financing Documents, on the terms and conditions of the Financing Documents and authorising a person or persons to sign or otherwise attest the due execution of the Financing Documents and any other documents to be executed or delivered by the relevant Obligor pursuant to the Financing Documents together with a certificate of a duly authorised officer of the Obligors setting out the names and signatures of the persons authorised to sign the Financing Documents on behalf of the relevant Obligor.
3 Certified Copies of all consents, licences, approvals or authorisations of any governmental or other authority, bureau or agency required by the Obligors in connection with the execution, delivery, performance, validity or enforceability of the Financing Documents or any document to be delivered under the Financing Documents.
4 The Fee Letter duly executed by the Guarantor together with all fees and expenses which have then become due and payable.
5 A legal opinion from each of:
(a) Linklaters in respect of English law;
(b) Freshfields Bruckhaus Deringer LLP (New York) in respect of the laws of the state of Delaware and the federal laws of the United States of America and Richard E. Barry, in house counsel of Aon Corporation in respect of the laws of the State of Illinois;
(c) D Porquet, in house counsel of AON France in respect of due execution;
(d) S Hamann, in house counsel of AON Deutschland in respect of due execution;
(e) T J M Alders-Timmer, in house counsel of AON Holdings and AON Groep in respect of due execution ;
(f) Linklaters, Paris in respect of French law (other than due execution);
(g) Linklaters, Frankfurt in respect of German law (other than due execution); and
(h) Linklaters, Amsterdam in respect of Dutch law (other than due execution).
6 A certificate, dated the date of this Agreement, signed by a duly authorised officer of the Guarantor certifying:
(a) that since 31 December 2000, no event has occurred which has had, or could be reasonably expected to have a Material Adverse Effect;
(b) no action, litigation, arbitration, administrative proceeding or governmental enquiries has been commenced or is pending or to the knowledge of their officers, threatened, against any Group Company or its assets which, if decided adversely
- 63 -

could reasonably be expected to have a Material Adverse Effect nor is there subsisting any unsatisfied judgment or award in an amount exceeding $25,000,000 given against any of them by any court, arbitrator or other body; and
(c) the Debt Rating Level as at that date.
- 64 -

SCHEDULE 3
DRAWDOWN NOTICE

To:        The Agent

From:      [BORROWER]

                                                                         *[date]	

Dear Sirs,
EURO 500,000,000 CREDIT AGREEMENT DATED [ ] SEPTEMBER 2001 (THE "CREDIT
AGREEMENT")
Terms defined in the Credit Agreement have the same meaning in this notice.
We request an Advance to be drawn down under the Credit Agreement as follows:
1 Facility [if 364 Day Facility also specify if Term Advance]:
2 Amount and currency of Advance:
3 Drawdown Date:
4 Duration of Interest Period/Initial Interest Period in case of Term Advance:
5 Payment instructions:

(if applicable)
We confirm that today and on the Drawdown Date:
(a) the representations and warranties in Clause 12 (REPRESENTATIONS AND WARRANTIES) to be repeated are and will be correct; and
(b) no Default or Potential Default has occurred and is continuing or will occur on the making of the Advance.
SIGNED
For and on behalf of
[BORROWER]
 (a company incorporated in [ ] under number [ ])
- 65 -

SCHEDULE 4
MANDATORY COST RATE
The Mandatory Cost Rate is an addition to the interest rate on an Advance to compensate the Lenders for the cost attributable to an Advance resulting from the imposition from time to time under or pursuant to the Bank of England Act 1998 (the "BANK ACT") and/or by the Bank of England and/or the Financial Services Authority (the "FSA") (or other United Kingdom governmental authorities or agencies) or European Central Bank of a requirement to place non-interest-bearing or Special Deposits (whether interest bearing or not) with the Bank of England and/or pay fees to the FSA calculated by reference to liabilities used to fund the Advance.
The Mandatory Cost Rate for any Lender lending from a Lending Office in a Participating Member State will be the percentage notified by that Lender to the Agent as the cost of complying with the minimum reserve requirements of the European Central Bank.
The Mandatory Cost Rate shall be the rate determined by the Agent to be equal to the arithmetic mean (rounded upward, if necessary, to four decimal places) of the respective rates notified by each Reference Bank to the Agent as the rate resulting from the application (as appropriate) of the following formulae:

in relation to an Advance denominated
in Sterling:                               XL + S(L - D) + F x 0.01
                                           ------------------------
                                                 100 - (X + S)

in relation to an Advance denominated in
a currency other than Sterling:                    F x 0.01
                                                   --------
                                                      300	

where on the day of application of a formula:
X is the percentage of Eligible Liabilities (in excess of any stated minimum) by reference to which that Reference Bank is required under or pursuant to the Bank Act to maintain an interest free cash ratio deposits with the Bank of England;
L is the percentage rate per annum at which Sterling deposits for the relevant period are offered by that Reference Bank to leading banks in the London interbank market at or about 11.00am on that day;
F is the rate of charge payable by that Reference Bank to the FSA pursuant to paragraph 2.02 or 2.03, as the case may be, of the Fees Regulations (but where, for this purpose, the figure at paragraph 2.02b or 2.03b, as the case may be, of the Fees Regulations shall be deemed to be zero) and expressed in pounds per L1 million of the Fee Base of that Reference Bank;
S is the level of interest bearing Special Deposits, expressed as a percentage of Eligible Liabilities, which that Reference Bank is required to maintain by the Bank of England (or other United Kingdom governmental authorities or agencies); and
D is the percentage rate per annum payable by the Bank of England to that Reference Bank on Special Deposits.
- 66 -

(X, L, S and D shall be expressed in the formula as numbers and not as percentages. A negative result obtained from subtracting D from L shall be counted as zero.)
If any Reference Bank fails to notify any such rate to the Agent, the Mandatory Cost Rate shall be determined on the basis of the rate(s) notified to the Agent by the remaining Reference Bank(s).
The Mandatory Cost Rate attributable to an Advance or other sum for any period shall be calculated at or about 11.00 a.m. on the first day of that period for the duration of that period.
The determination of the Mandatory Cost Rate in relation to any period shall, in the absence of manifest error, be conclusive and binding on the Parties.
If there is any change in circumstance (including the imposition of alternative or additional requirements) which in the reasonable opinion of the Agent renders or will render either of the above formulae (or any element of the formulae, or any defined term used in the formulae) inappropriate or inapplicable, the Agent (following consultation with the Borrower and the Majority Lenders) shall be entitled to vary the same by giving notice to the Parties. Any such variation shall, in the absence of manifest error, be conclusive and binding on the Parties and shall apply from the date specified in such notice.
For the purposes of this Schedule:
"ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings given to those terms under or pursuant to the Bank Act or by the Bank of England (as may be appropriate), on the day of the application of the formula.
"FEE BASE" has the meaning given to that term for the purposes of, and shall be calculated in accordance with, the Fees Regulations.
"FEES REGULATIONS" means, as appropriate, either:
(a) the Banking Supervision (Fees) Regulations 2001; or
(b) such regulations as from time to time may be in force, relating to the payment of fees for banking supervision in respect of periods subsequent to 31 March 2002.
- 67 -

SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
To: The Agent
and the other parties to the Credit Agreement (as defined below)
This transfer certificate (the "TRANSFER CERTIFICATE") relates to a credit agreement dated [ ] September 2001 and made between (1) Aon Corporation as guarantor, (2) certain subsidiaries of Aon Corporation, (3) certain banks, (4) Citibank International plc as agent and (5) Salomon Brothers International Limited as arranger (the "CREDIT AGREEMENT", which term shall include any amendments or supplements to it).
Terms defined and references construed in the Credit Agreement shall have the same meanings and construction in this Transfer Certificate.
1 [insert full name of Existing Lender] (the "EXISTING LENDER"):
(a) confirms that to the extent that details appear in the schedule to this Transfer Certificate under the headings "Existing Lender's Commitment" and "Existing Lender's Participation in Advances", those details accurately summarise its Commitment and its Participation in Advances all or part of which is to be transferred; and
(b) requests [insert full name of Lender Transferee] (the "LENDER TRANSFEREE") to accept and procure, in accordance with Clause 23 (ASSIGNMENTS AND TRANSFERS) of the Credit Agreement, the substitution of the Existing Lender by the Lender Transferee in respect of the amount specified in the schedule to this Transfer Certificate of its Commitment and its Participation in Advances by signing this Transfer Certificate.
2 The Lender Transferee requests each of the Parties to accept this executed Transfer Certificate as being delivered under and for the purposes of Clause 23 (ASSIGNMENTS AND TRANSFERS) of the Credit Agreement so as to take effect in accordance with the provisions of that Clause on [insert date of transfer].
3 The Lender Transferee:
(a) [represents and warrants that as at the date of this Transfer Certificate through the Lending Office it shall use for Advances to a UK Borrower, it is a Qualifying Lender;]
(b) confirms that it has received a copy of the Credit Agreement together with such other documents and information as it has requested in connection with this transaction;
(c) confirms that it has not relied and will not rely on the Existing Lender to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such documents or information;
- 68 -

(d) agrees that it has not relied and will not rely on the Arranger, the Agent, the Existing Lender or any other Lender to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Obligors; and
(e) confirms that its Lending Office is in [the United Kingdom].
4 The Lender Transferee undertakes with the Existing Lender and each of the other parties to the Credit Agreement that it will perform, in accordance with its terms, all those obligations which, by the terms of the Credit Agreement, will be assumed by it upon delivery of the executed copy of this Transfer Certificate to the Agent.
5 On execution of this Transfer Certificate by the Agent on their behalf, the Parties accept the Lender Transferee as a party to the Credit Agreement in substitution for the Existing Lender with respect to all those rights and/or obligations which, by the terms of the Credit Agreement, will be assumed by the Lender Transferee after delivery of the executed copy of this Transfer Certificate to the Agent.
6 None of the Existing Lender, the other Lenders and the Agent:
(a) makes any representation or warranty or assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Credit Agreement; or
(b) assumes any responsibility for the financial condition of the Obligors or any other party to the Credit Agreement or any other document or for the performance and observance by the Obligors or any other party to the Credit Agreement or any other document of its or their obligations and any and all conditions and warranties, whether express or implied by law or otherwise, are excluded.
7 The Lender Transferee confirms that its Lending Office and address for notices for the purposes of the Credit Agreement are as set out in the schedule to this Transfer Certificate.
8 The Existing Lender gives notice to the Lender Transferee (and the Lender Transferee acknowledges and agrees with the Existing Lender) that the Existing Lender is under no obligation to re-purchase (or in any other manner to assume, undertake or discharge any obligation or liability in relation to) the transferred Commitment and Participation at any time after this Transfer Certificate shall have taken effect.
9 Following the date upon which this Transfer Certificate shall have taken effect, without limiting the terms of this Transfer Certificate, each of the Lender Transferee and the Existing Lender acknowledges and confirms to the other that, in relation to the relative Commitment and Participation (or part thereof), variations, amendments or alterations to any of the terms of the Credit Agreement arising in connection with any renegotiation or rescheduling of the obligations under the Credit Agreement shall apply to and be binding on the Lender Transferee alone.
10 This Transfer Certificate is governed by and shall be construed in accordance with English law.
- 69 -

THE SCHEDULE

Existing Lender's Commitment                 Amount of Commitment Transferred

Existing Lender's Participation in Advances  Amount of Participation Transferred

[INSERT FULL NAME OF LENDER TRANSFEREE]

Lending Office                               Address for notices

                                             [ADDRESS]

                                             Attention:

                                             Telex:

                                             Answerback:

                                             Fax:
[LENDER TRANSFEREE]

By:
       ---------------------------------
       Duly authorised)

[EXISTING LENDER]

By:
       ---------------------------------
       Duly authorised	

The Agent on behalf of itself and all other parties to the Credit Agreement
By:
 Duly authorised
Dated:
- 70 -

SCHEDULE 6
FORM OF DEED OF ACCESSION
THIS DEED is made this [ ] day of [ ] 200[ ] by [ ] (the "NEW PARTY") in favour of the other parties to the Credit Agreement (as defined below).
RECITALS:
(A) This Deed is supplemental to a credit agreement (the "CREDIT AGREEMENT")
dated [ ] September 2001 made between (1) Aon Corporation as guarantor,
(2) certain subsidiaries of Aon Corporation, (3) certain banks, (4) Citibank International plc as agent and (5) Salomon Brothers International Limited as arranger.
(B) The New Party wishes to accede to the Credit Agreement as a Borrower.
(C) It is a term of the Credit Agreement that, in order to accede as a Borrower, the New Party must enter into this Deed.
NOW THIS DEED WITNESSES AS FOLLOWS:
1 Terms defined and references construed in the Credit Agreement shall have the same meanings and construction in this Deed.
2 The New Party:
(a) agrees to be bound by all the terms and conditions of the Credit Agreement insofar as they relate to a Borrower as if the New Party was a party to the Credit Agreement in such capacity; and
(b) represents and warrants to the Agent, the Arranger and the Lenders in the terms of Clause 12.1.1 (STATUS) to 12.1.7 (LITIGATION) but such representations and warranties shall be given so as to apply, MUTATIS MUTANDIS, to the New Party only.
3 The New Party confirms that it has delivered to the Agent the documents specified in the Schedule to this Deed.
4 The New Party agrees that it shall accede to the Credit Agreement immediately upon the Agent countersigning this Deed.
IN WITNESS whereof the New Party has caused this Deed to be executed on the day set out above.
- 71 -

THE COMMON SEAL of
 [ ]
was hereunto affixed in
the presence of:
Director
Director/Secretary
We agree, on behalf of all the parties to the Credit Agreement, that the New Party shall, from the date of our signature, accede to the Credit Agreement as if it were a Borrower named therein and a party to the Credit Agreement.
SIGNED

for and on behalf of
[ ]
as Agent
Date: [ ]
SCHEDULE
1 A Certified Copy of our memorandum and articles of association or equivalent constitutional documents.
2 Certified Copy of the resolution of our Board of Directors approving the transactions contemplated by this Deed and authorising the execution of this Deed and any other documents contemplated by the Credit Agreement.
3 Certified Copies of all other resolutions, authorisations, approvals, consents and licences, corporate, official or otherwise, necessary or desirable, to enable us to give effect to the transactions contemplated by this Deed and for the validity and enforceability of this Deed.
4 A legal opinion from Messrs. [LEGAL COUNSEL IN JURISDICTION OF INCORPORATION OF NEW PARTY]
- 72 -

SCHEDULE 7
FORM OF TEG LETTER

To:       Aon France S.A.

From:     Citibank International plc as Agent

Dated:    [    ]2001	

Dear Sirs
[NAME OF THE BORROWER INCORPORATED IN FRANCE] - MULTICURRENCY REVOLVING LOAN FACILITY OF EURO 250,000,000 AND 364 DAYS FACILITY OF EURO 250,000,000 DATED [-] SEPTEMBER 2001 (THE "CREDIT AGREEMENT")
We refer to the Credit Agreement.
Terms defined in the Credit Agreement shall bear the same meaning in this letter unless otherwise defined in this letter. References to Clauses in this letter are references to Clauses in the Credit Agreement.
We confirm that:
1 this is the letter referred to in Clause 7.7(TAUX EFFECTIF GLOBAL) of the Credit Agreement;
2 you acknowledge that, due to the fact that interest payable under the Credit Agreement is to be calculated on a floating rate basis by references to LIBOR or EURIBOR for Interest Periods selected by a Borrower, it is not possible to compute the effective global rate ("TAUX EFFECTIF GLOBAL") for the lifetime of the Facilities; and
3 in order to comply with the provisions of Articles L313-1 and L313-2 of the French "CODE DE LA CONSOMMATION", and only as an indication based on the assumptions described below, an example of calculation of the effective global rate can be given as follows:
(i) for an Interest Period of three months and at EURO EURIBOR rate of
[ ]% per annum, a rate for the Facilities (TAUX DE PERIODE) of [ ]%;
(ii) for an Interest Period of six months and at L LIBOR rate of [ ]% per annum, a rate for the Facilities (TAUX DE PERIODE) of [ ]%
The above rates are given on an indicative basis and on the basis (a) that drawdown for the full amount of the Facilities will be made on - , (b) that the EURIBOR/LIBOR rate, expressed as an annual rate, is as fixed on [DATE],
(c) that repayments occur at contractual maturity and not earlier, (d) that no extension option pursuant to clause 8.6 has been exercised, (e) that the Debt Rating Level (as defined in Clause 7.2 (MARGIN)) of the Guarantor is Level 3, and (f) of the various fees payable by you under the terms of the Credit Agreement. Such rates shall not be binding on the Arranger, the Agent or a Lender.
We should be grateful if you would confirm your acceptance of the terms of this letter by signing and returning to us the enclosed copy.
- 73 -

This letter is designated a Financing Document.
Yours faithfully.

Citibank International plc as Agent
We agree to the above.

[AON France S.A.]

- 74 -

THE GUARANTOR
SIGNED by DIANE AIGOTTI
for and on behalf of
AON CORPORATION
THE BORROWERS
SIGNED by JOHN LAWRENCE HILL
for and on behalf of
AON FINANCE LIMITED
SIGNED by VINCENT REDIER
for and on behalf of
AON FRANCE S.A.
SIGNED by M.J. BAL
for and on behalf of
AON GROEP NEDERLAND B.V.
SIGNED by L.J. LANGENBERG
for and on behalf of
AON HOLDINGS B.V.
SIGNED by HOLGER GASEROW AXEL HEITKAMP
for and on behalf of
AON JAUCH & HUBENER HOLDINGS GmbH
- 75 -

THE AGENT
SIGNED by DAVID ZELL
for and on behalf of
CITIBANK INTERNATIONAL plc
THE ARRANGER
SIGNED by DAVID ZELL
for and on behalf of
SALOMON BROTHERS INTERNATIONAL LIMITED
THE LENDERS
SIGNED by DAVID ZELL
for and on behalf of
CITIBANK NA
SIGNED by ANDREW MCMILLAN
for and on behalf of
THE ROYAL BANK OF SCOTLAND PLC
SIGNED by DOUGLAS URQUHART
STEVEN WAHNON
for and on behalf of
BANCO SANTANDER CENTRAL HISPANO S.A.
SIGNED by DAVID ZELL
for and on behalf of
BANK OF NEW YORK
- 76 -

SIGNED by PAUL JOHNSON
for and on behalf of
BARCLAYS BANK PLC
SIGNED by DAVID ZELL
for and on behalf of
COMMERZBANK AKTIENGESELLSCHAFT,
LONDON BRANCH
SIGNED by DAVID ZELL
for and on behalf of
ING BANK
SIGNED by JAMES HARVEY SMITH
for and on behalf of
LLOYDS TSB BANK PLC
SIGNED by DAVID ZELL
for and on behalf of
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
SIGNED by VINCENT WRIGHT
HUGH J. FAGAN
for and on behalf of
BANCA DI ROMA S.P.A.
- 77 -

SIGNED by DAVID ZELL
for and on behalf of
BANK BRUSSELS LAMBERT
SIGNED by DAVID ZELL
for and on behalf of
BANK ONE, NA
SIGNED by DAVID ZELL
for and on behalf of
NATEXIS BANQUES POPULAIRES
SIGNED by DAVID ZELL
for and on behalf of
RBC FINANCE B.V.
SIGNED by LAURENCE SHERLOCK
STEVE WEBB
for and on behalf of
STANDARD CHARTERED BANK
SIGNED by DAVID ZELL
for and on behalf of
KBC BANK NEDERLAND N.V.
- 78 -

Exhibit 12(a)
AON CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMBINED WITH UNCONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                             NINE MONTHS ENDED
                                               SEPTEMBER 30,                          YEARS ENDED DECEMBER 31,
                                           --------------------- -----------------------------------------------------
(millions except ratios)                   2002      2001 (1)     2001       2000        1999        1998       1997
                                           -------- ----------- -------- ---------- -----------  ---------- --------
                                                    (RESTATED)
Income before provision for income taxes
      and minority interest                 $  504      $  245   $  309     $  854      $  635      $  931     $  542

ADD BACK FIXED CHARGES:

      Interest on indebtedness                  91          98      127        140         105          87         70

      Interest credited on investment-type
        insurance contracts                     27          44       56         71          77          72         45

      Interest on ESOP                           -           -        -          -           1           2          3

      Portion of rents representative
        of interest factor                      38          39       57         54          49          51         44

                                           -------- ----------- -------- ---------- -----------  ---------- --------
        INCOME AS ADJUSTED                  $  660      $  426   $  549    $ 1,119      $  867     $ 1,143     $  704
                                           ======== =========== ======== ========== ===========  ========== ==========

FIXED CHARGES:

      Interest on indebtedness              $   91      $   98   $  127     $  140      $  105      $   87     $   70

      Interest credited on investment-type
        insurance contracts                     27          44       56         71          77          72         45

      Interest on ESOP                           -           -        -          -           1           2          3

      Portion of rents representative
        of interest factor                      38          39       57         54          49          51         44

                                           -------- ----------- -------- ---------- -----------  ---------- --------
        TOTAL FIXED CHARGES                 $  156      $  181   $  240     $  265      $  232      $  212     $  162
                                           ======== =========== ======== ========== ===========  ========== ==========

RATIO OF EARNINGS TO FIXED CHARGES             4.2         2.4      2.3        4.2         3.7         5.4        4.3
                                           ======== =========== ======== ========== ===========  ========== ==========	

(1) The computation of Ratio of Earnings to Fixed Charges for nine months ended September 30, 2001 has been restated from what had previously been reported to include interest credited on investment-type insurance contracts.

EXHIBIT 12(b)
AON CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMBINED WITH UNCONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

                                                NINE MONTHS ENDED
                                                  SEPTEMBER 30,                            YEARS ENDED DECEMBER 31,
                                             ---------------------------- ------------------------------------------------------
(millions except ratios)                      2002           2001 (2)         2001         2000       1999        1998      1997
                                             ----------- ---------------- -----------  ----------- ----------  ---------- -------
                                                           (RESTATED)
Income before provision for income taxes
      and minority interest                      $  504        $  245      $  309       $  854     $  635      $  931    $  542

ADD BACK FIXED CHARGES:

      Interest on indebtedness                       91            98         127          140        105          87        70

      Interest credited on investment-type
        insurance contracts                          27            44          56           71         77          72        45

      Interest on ESOP                                -             -           -            -          1           2         3

      Portion of rents representative of
        interest factor                              38            39          57           54         49          51        44

                                             ----------- ------------- -----------  ----------- ----------  ---------- --------
        INCOME AS ADJUSTED                       $  660        $  426      $  549      $ 1,119     $  867     $ 1,143    $  704
                                             =========== ============= ===========  =========== ==========  ========== ========

FIXED CHARGES AND PREFERRED STOCK DIVIDENDS:

      Interest on indebtedness                   $   91        $   98      $  127       $  140     $  105      $   87    $   70

      Preferred stock dividends                      52            52          70           70         70          70        82

                                             ----------- ------------- -----------  ----------- ----------  ---------- --------
          INTEREST AND DIVIDENDS                    143           150         197          210        175         157       152

      Interest credited on investment-type
        insurance contracts                          27            44          56           71         77          72        45

      Interest on ESOP                                -             -           -            -          1           2         3

      Portion of rents representative
        of interest factor                           38            39          57           54         49          51        44

                                             ----------- ------------- -----------  ----------- ----------  ---------- --------
          TOTAL FIXED CHARGES AND PREFERRED
          STOCK DIVIDENDS                        $  208        $  233      $  310       $  335     $  302      $  282    $  244
                                             =========== ============= ===========  =========== ==========  ========== ========

RATIO OF EARNINGS TO COMBINED FIXED
      CHARGES AND PREFERRED STOCK
      DIVIDENDS (1)                                 3.2           1.8         1.8          3.3        2.9         4.1       2.9
                                             =========== ============= ===========  =========== ==========  ========== ========	

(1) Included in total fixed charges and preferred stock dividends are $49 million for the nine months ended September 30, 2002 and 2001, $66 million for the years ended December 31, 2001, 2000, 1999 and 1998, and $64 million for the year ended December 31, 1997, of pretax distributions on the 8.205% mandatorily redeemable preferred capital securities which are classified as "minority interest" on the condensed consolidated statements of income.
(2) The computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends for nine months ended September 30, 2001 has been restated from what had previously been reported to include interest credited on investment-type insurance contracts.

Exhibit 15
Board of Directors and Stockholders
Aon Corporation
We are aware of the incorporation by reference in the Registration Statements of Aon Corporation ("Aon") described in the following table of our report dated November 11, 2002 relating to the unaudited condensed consolidated interim financial statements of Aon Corporation that are included in its Form 10-Q for the quarter ended September 30, 2002:

Registration Statement
----------------------
   Form     Number                              Purpose
   ----     ------                              -------
    S-8    33-27984      Pertaining to Aon's savings plan
    S-8    33-42575      Pertaining to Aon's stock award plan and stock option plan
    S-8    33-59037      Pertaining to Aon's stock award plan and stock option plan
    S-4    333-21237     Offer to exchange Capital Securities of Aon Capital A
    S-3    333-50607     Pertaining to the registration of 369,000 shares of common stock
    S-8    333-55773     Pertaining to Aon's stock award plan, stock option plan and employee
                         stock purchase plan
    S-3    333-78723     Pertaining to the registration of debt securities, preferred stock
                         and common stock
    S-4    333-57706     Pertaining to the registration of a proposed issuance of up to 3,852,184
                         shares of common stock to the stockholders of ASI Solutions, Inc.
    S-3    333-65624     Pertaining to the registration of 2,000,000 shares of common stock
    S-3    333-74364     Pertaining to the registration of debt securities, preferred stock, common
                         stock, share purchase contracts, and share purchase units
    S-4   333-100464     Pertaining to the registration of $250,000,000 of debt securities
    S-3   333-100466     Pertaining to the registration of 4,564,824 shares of common stock	

Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933.
ERNST & YOUNG LLP
Chicago, Illinois
November 11, 2002

Exhibit 99.1
CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63
OF TITLE 18 OF THE UNITED STATES CODE
I, Patrick G. Ryan, the Chief Executive Officer of Aon Corporation (the "COMPANY"), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2002 (the "REPORT") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Patrick G. Ryan
-----------------------------
Patrick G. Ryan
Chief Executive Officer
November 14, 2002	

Exhibit 99.2
CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63
OF TITLE 18 OF THE UNITED STATES CODE
I, Harvey N. Medvin, the Chief Financial Officer of Aon Corporation (the "COMPANY"), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2002 (the "REPORT") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Harvey N. Medvin
---------------------------
Harvey N. Medvin
Chief Financial Officer
November 14, 2002