As filed with the Securities and Exchange Commission on June 26, 2007
Registration No. 333-143541
=================================================================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALLSTATE LIFE GLOBAL FUNDING ALLSTATE LIFE INSURANCE COMPANY
(As depositor of the trusts described herein, (As sponsor of the trusts described herein and as
and as issuer of the funding notes described herein) issuer of the funding agreements described herein)
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Delaware Illinois
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
Not Applicable 36-2554642
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
6525 Morrison Boulevard, Suite 318 3100 Sanders Road
Charlotte, NC 28211 Northbrook, IL 60062
(704) 365-0569 (847) 402-5000
(Address, including zip code, and telephone number, including area (Address, including zip code, and telephone number,
code of registrant's principal executive offices) including area code, of registrant's principal
executive offices)
Douglas K. Johnson Michael J. Velotta
President of AMACAR Pacific Corp., Senior Vice President, General Counsel
Administrator of Allstate Life Global Funding and Secretary of Allstate Life Insurance Company
and Allstate Life Global Funding Trusts 3100 Sanders Road
6525 Morrison Boulevard, Suite 318 Northbrook, IL 60062
Charlotte, NC 28211 (847) 402-5000
(704) 365-0569
(Name, address, including zip code, and telephone number, including area code, of
agents for service with respect to the registrants)
Copies to:
Anthony J. Ribaudo
John M. Schwolsky Sidley Austin LLP
Vladimir Nicenko One South Dearborn
LeBoeuf, Lamb, Greene & MacRae LLP Chicago, Illinois 60603
125 West 55th Street (312) 853-7000
New York, NY 10019
(212) 424-8000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
|_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Amount to Offering Price Aggregate Offering Registration
Title of Each Class of Securities to be Registered be Registered(1) Per Unit Price(2)(3)(4) Fee(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Secured Medium Term Notes(6)........................ $8,000,000,000 100% $8,000,000,000 $245,600(7)
Funding Notes(8).................................... $8,000,000,000 100% $8,000,000,000 None(8)
Funding Agreements(9)............................... $8,000,000,000 100% $8,000,000,000 None(9)
==================================================================================================================================
(1) Pursuant to Rule 429 under the Securities Act of 1933, this registration
statement which is a new registration statement shall act as a
post-effective amendment to Registration Statement No. 333-129157,
previously filed by the registrants and declared effective on March 15,
2006. Such post-effective amendment shall hereafter become effective
concurrently with the effectiveness of this registration statement and in
accordance with Section 8(c) of the Securities Act of 1933. The prospectus
filed as part of this Registration Statement also constitutes a prospectus
for Registration Statement No. 333-129157 pursuant to which $400,000,000 of
unsold previously registered securities registered on Registration
Statement No. 333-129157 may be offered and sold together with the
securities registered hereunder through the use of the combined prospectus
included herein.
(2) Estimated solely for the purpose of determining the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933.
(3) If any securities are (a) denominated or payable in a foreign or composite
currency or currencies, such principal amount as shall result in an
aggregate initial offering price equivalent to $8,000,000,000, at the time
of initial offering, (b) issued at an original issue discount, such greater
principal amount as shall result in an aggregate initial offering price of
$8,000,000,000, or (c) issued with their principal amount payable at
maturity to be determined with reference to a currency exchange rate or
other index, such principal amount as shall result in an aggregate initial
offering price of $8,000,000,000.
(4) $8,000,000,000 is the estimated maximum aggregate offering price of all the
securities being registered.
(5) The registration fee has been calculated on the basis of the maximum
aggregate offering price of all securities listed in accordance with Rule
457(o) under the Securities Act of 1933.
(6) Each issuance of Secured Medium Term Notes will be made by a newly formed
separate and distinct trust.
(7) Previously paid.
(8) Registered solely pursuant to Rule 140 under the Securities Act of 1933.
Each Funding Note of Allstate Life Global Funding will be purchased by a
separate and distinct trust with the net proceeds from the sale of a
related series of Secured Medium Term Notes issued by such trust. Pursuant
to Rule 457(o) under the Securities Act of 1933, no separate registration
fees are payable in respect of the Funding Notes.
(9) Each Funding Agreement of Allstate Life Insurance Company will be purchased
by Allstate Life Global Funding with the net proceeds from the sale of the
related Funding Notes. Pursuant to Rule 457(o) under the Securities Act of
1933, no separate registration fees are payable in respect of the Funding
Agreements.
------------------
The registrants hereby amend this registration statement on a date
necessary to delay their effectiveness until the registrants file a further
amendment specifically stating that this registration statement will become
effective according to Section 8(a) of the Securities Act of 1933 or until this
registration statement shall become effective on the date the Commission
determines.
==============================================================================
EXPLANATORY NOTE
This registration statement contains:
o two prospectus supplements relating to one or more series of notes (one for
an offering of series of secured medium term notes which are intended to be
offered primarily to institutional investors and the other for an offering
of series of secured medium term notes which are referred to as Allstate
Life(R) CoreNotes(R) in the prospectus supplements and which are intended
to be offered primarily to retail investors) which one or more newly
created separate and distinct Delaware special purpose statutory trusts may
offer from time to time to the public, as well as each related funding note
which may be issued by Allstate Life Global Funding to the issuing trust,
and one or more applicable funding agreements which may be issued by
Allstate Life Insurance Company, and sold to, and deposited into, the
issuing trust by Allstate Life Global Funding; and
o a base prospectus relating to one or more series of secured medium term
notes (including series of Allstate Life(R) CoreNotes(R)) which may be
issued and sold by the trusts to the public, as well as each related
funding note which may be issued by Allstate Life Global Funding to the
issuing trust, and one or more applicable funding agreements which may be
issued by Allstate Life Insurance Company, and sold to, and deposited into,
the issuing trust by Allstate Life Global Funding.
Each offering of a series of notes and the related funding note and funding
agreement(s) made under this registration statement will be made pursuant to:
o the base prospectus and one of the prospectus supplements included in
this registration statement, with the specifications of the applicable series of
notes, and the related funding note and funding agreement(s), set forth in the
applicable pricing supplement; or
o the base prospectus and a newly filed prospectus supplement to the base
prospectus, with the specification of the applicable series of notes, and the
related funding note and funding agreement(s) set forth in such newly filed
prospectus supplement or a pricing supplement.
"Allstate Life(R)" is a registered service mark of Allstate Insurance Company.
"CoreNotes(R)" is a registered service mark of Merrill Lynch & Co., Inc.
Subject to Completion
Preliminary Prospectus Supplement dated June 26, 2007
PROSPECTUS SUPPLEMENT
(To prospectus dated -, 2007)
$8,400,000,000
Allstate Life Global Funding
Depositor
Secured Medium Term Notes
Due Between Nine Months and 30 Years From the Date of Issue
Issued Through Allstate Life Global Funding Trusts
Secured by
Funding Agreements Issued by
Allstate Life Insurance Company
Sponsor
------------------
Allstate Life Global Funding (the "depositor" or "Global Funding") is a
statutory trust formed under the laws of the State of Delaware. Its primary
purpose is to facilitate the programs for the issuance of one or more series of
secured medium term notes (the "notes"). Each series of notes will be issued by
a newly created separate and distinct Delaware statutory trust (each, a
"trust"). The notes of each series will be secured by one or more funding
agreements (each, a "funding agreement") issued by Allstate Life Insurance
Company ("Allstate Life") and assigned absolutely to, and deposited into, the
issuing trust by Global Funding. Global Funding will be the sole beneficial
owner of each trust that is formed and the depositor of the funding agreements
into the issuing trusts. In connection with each offering of notes, Global
Funding will issue the applicable funding note (each, a "funding note") as more
fully described herein. Allstate Life is the sponsor of the programs.
The notes of each series will represent the obligations of the issuing
entity only and will not represent the obligations of, or interest in, any other
person or entity, including Global Funding, Allstate Life or any of their
respective affiliates. The notes of each series will constitute "asset-backed
securities" within the meaning of Regulation AB under the Securities Act of
1933, as amended.
The specific terms of each series of notes, and the related funding note
and funding agreement(s), will be set forth in a separate prospectus supplement
to this prospectus supplement and the accompanying prospectus (a "pricing
supplement"), which will be prepared in connection with the issuance of such
series of notes, including the information related to the interest rate or
specified rate of return thereof, the distribution frequency and the first
expected distribution date. The form of pricing supplement, which includes
bracketed alternatives that may form part of the structure of an offering of
notes pursuant to the program described in this prospectus supplement and the
accompanying prospectus, is included in this prospectus supplement as Annex A.
You should read this prospectus supplement, the accompanying prospectus and the
applicable pricing supplement carefully before you invest.
The notes of each series:
o will be issued in only one class;
o will have a stated maturity of nine months to 30 years from the date
of issue;
o will have redemption and/or repayment provisions, if applicable,
whether mandatory or at the option of the issuing trust or the holders
of such notes;
o will provide for payments in U.S. dollars or one or more foreign
currencies;
o will be in book-entry or definitive form;
o will bear interest at fixed or floating rates, or bear no interest at
all; unless otherwise specified in the applicable pricing supplement,
each trust will pay interest on the relevant series of notes on a
monthly, quarterly, semiannual or annual basis;
o will be secured by the right, title and interest of the issuing trust
in and to (1) the funding agreement(s) held by that trust, (2) all
proceeds of such funding agreement(s) and (3) all books and records
pertaining to such funding agreement(s); and
o may be sold to United States and foreign institutional and other
investors.
The funding note and funding agreement(s) issued in connection with the
offering of a series of notes will represent the respective obligations of
Global Funding and Allstate Life only and will not represent the obligations of
or the interest in any person other than the respective issuing entity.
Each class of securities offered may have an aggregate principal amount of
up to $8,400,000,000 or the equivalent amount in one or more foreign or
composite currencies.
Investing in these securities involves risks that are described in the
"Risk Factors" section beginning on page S-12.
------------------
Neither the Securities and Exchange Commission, any state securities
commission nor any state insurance commission has approved or disapproved of
these securities or determined if this prospectus supplement, the accompanying
prospectus or any pricing supplement is truthful or complete. Any representation
to the contrary is a criminal offense.
Merrill Lynch & Co.
A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital
Bear, Stearns & Co. Inc.
Citigroup
Credit Suisse
Deutsche Bank Securities
Goldman, Sachs & Co.
JPMorgan
Lehman Brothers
Morgan Stanley
RBS Greenwich Capital
UBS Investment Bank
Wachovia Securities
------------------
The date of this prospectus supplement is -, 2007.
TABLE OF CONTENTS
Page
Prospectus Supplement
Forward-Looking Statements..............................................................................................S-1
About this Prospectus Supplement and the Pricing Supplements............................................................S-2
Summary.................................................................................................................S-3
Risk Factors...........................................................................................................S-12
Allstate Life Global Funding Trusts....................................................................................S-18
Allstate Life Global Funding...........................................................................................S-18
Allstate Life Insurance Company........................................................................................S-19
Description of the Notes...............................................................................................S-20
Global Clearance and Settlement Procedures.............................................................................S-45
Special Provisions Relating to Foreign Currency Notes..................................................................S-47
Description of the Funding Agreements..................................................................................S-49
United States Federal Income Tax Considerations........................................................................S-50
Plan of Distribution...................................................................................................S-60
Annex A: Form of Pricing Supplement...................................................................................A-1
Prospectus
Forward-Looking Statements................................................................................................1
About this Prospectus.....................................................................................................2
Available Information.....................................................................................................3
Incorporation of Documents by Reference...................................................................................3
Description of Allstate Life Global Funding and the Trusts................................................................5
Description of Allstate Life Insurance Company...........................................................................18
Computation of Ratio of Earnings to Fixed Charges........................................................................19
Use of Proceeds..........................................................................................................19
Description of the Notes.................................................................................................20
Description of the Indentures............................................................................................21
Description of the Funding Notes.........................................................................................32
Description of the Funding Agreements....................................................................................33
Description of the Support and Expenses Agreements.......................................................................39
Description of the Administrative Services Agreements....................................................................41
ERISA Considerations.....................................................................................................42
Plan of Distribution.....................................................................................................45
Legal Opinions...........................................................................................................46
Experts..................................................................................................................46
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The trusts may sell the notes to one or more of the agents referred to
below (collectively, the "Agents") as principals for resale at varying or fixed
offering prices or through the applicable Agent(s) as agents using their
reasonable efforts on behalf of each issuing trust. The trusts may also sell
notes directly to investors without the assistance of any Agent. Unless
otherwise specified in the applicable pricing supplement, any note sold to an
Agent as principal will be purchased by that Agent at a price equal to 100% of
the principal amount thereof less a percentage of the principal amount equal to
the commission applicable to an agency sale of a note of identical maturity.
Unless otherwise specified in the applicable pricing supplement, each trust will
pay a commission to an Agent, ranging from .150% to .875% of the principal
amount of each note, depending upon its stated maturity, sold through that Agent
as its agent.
You should rely on the information contained or incorporated by reference
in this prospectus supplement, the accompanying prospectus and each applicable
pricing supplement. Neither the registrants nor any Agent has authorized anyone
to provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. Neither the
registrants nor any Agent is making an offer to sell the notes in any
jurisdiction where the offer or sale is not permitted. You should not assume
that the information contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus and the applicable pricing supplement is
accurate as of any date other than the date of such document.
FORWARD-LOOKING STATEMENTS
Allstate Life
This prospectus supplement, the accompanying prospectus and each applicable
pricing supplement may include forward-looking statements of Allstate Life.
These forward-looking statements are not statements of historical fact but
rather reflect Allstate Life's current expectations, estimates and predictions
about future results and events. These statements may use words such as
"should," "likely," "target," "anticipate," "believe," "estimate," "expect,"
"intend," "predict," "project" and similar expressions as they relate to
Allstate Life or its management. When Allstate Life makes forward-looking
statements, Allstate Life is basing them on its management's beliefs and
assumptions, using information currently available to Allstate Life. These
forward-looking statements are subject to risks, uncertainties and assumptions,
including but not limited to, risks, uncertainties and assumptions discussed in
this prospectus supplement, the accompanying prospectus and in each applicable
pricing supplement. Factors that can cause or contribute to these differences
include those described under the heading "Risk Factors" in this prospectus
supplement. Allstate Life undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if
Allstate Life's underlying assumptions prove to be incorrect, actual results may
vary materially from what Allstate Life projected. Any forward-looking
statements of Allstate Life you read in this prospectus supplement, the
accompanying prospectus or any pricing supplement reflect Allstate Life's
current views with respect to future events and are subject to these and other
risks, uncertainties and assumptions relating to Allstate Life's operations,
results of operations, growth strategy and liquidity. All subsequent written and
oral forward-looking statements attributable to Allstate Life or individuals
acting on Allstate Life's behalf are expressly qualified in their entirety by
this section. You should specifically consider the factors identified in this
prospectus supplement, the accompanying prospectus and each applicable pricing
supplement which could cause actual results to differ before making an
investment decision.
Global Funding and the Trusts
This prospectus supplement, the accompanying prospectus and each applicable
pricing supplement may include forward-looking statements of Global Funding and
the trusts. These forward-looking statements are subject to risks, uncertainties
and assumptions, including but not limited to, risks, uncertainties and
assumptions discussed in this prospectus supplement, the accompanying prospectus
and in each applicable pricing supplement. Global Funding does not, and the
trusts will not, undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
You should specifically consider the factors identified in this prospectus
supplement, the accompanying prospectus and each applicable pricing supplement
before making an investment decision. The trusts are not entitled to the safe
harbors contained in Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to forward-looking statements of the
trusts in this prospectus supplement, the accompanying prospectus and each
applicable pricing supplement.
S-1
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
This document is a prospectus supplement and supplements a prospectus which
is part of a registration statement filed with the Securities and Exchange
Commission (the "SEC") by Allstate Life Global Funding and Allstate Life
Insurance Company (the "registrants"). This prospectus supplement provides you
with a general description of the notes that each trust may offer in connection
with the secured medium term notes program and the related funding notes and
funding agreements described in this prospectus supplement and the accompanying
prospectus (this "program") and supplements the description of the notes,
funding notes and funding agreements contained in the accompanying prospectus.
The trusts may sell notes with a total initial public offering price or purchase
price of up to $8,400,000,000 or the equivalent amount in one or more foreign
currencies, less any amount of notes previously issued by the trusts under this
program or pursuant to a separate prospectus supplement to the accompanying
prospectus that relates to the Allstate Life(R) CoreNotes(R) program pursuant to
which the notes may be offered by the trusts from time to time primarily to
retail investors (the "Allstate Life(R) CoreNotes(R) program").
The specific terms and conditions of a series of notes and the related
funding note and funding agreement(s) being offered will be contained in a
pricing supplement. That pricing supplement also may add, update, supplement or
clarify information in this prospectus supplement and the accompanying
prospectus. You should carefully review such additional, updated, supplemental
or clarifying information contained in the pricing supplement. You should read
this prospectus supplement and the accompanying prospectus and each applicable
pricing supplement together with the additional information that is incorporated
by reference in this prospectus supplement and the accompanying prospectus. That
additional information is described under the heading "Incorporation of
Documents by Reference" in the accompanying prospectus.
In connection with the issuance of any series of notes, the Agents have
reserved the right to appoint one of them to act as a stabilizing agent. Such
appointment will be disclosed in the applicable pricing supplement. In
connection with the issuance of any series of notes, the stabilizing agent or
any person acting on its behalf may over-allot or effect transactions with a
view to supporting the market price of the applicable series of notes at a level
higher than that which might otherwise prevail for a limited period. However,
there is no obligation on the stabilizing agent or any other person acting on
its behalf to do this. Such stabilizing, if commenced, may be discontinued at
any time and must be brought to an end after a limited period. Any such
stabilizing shall be conducted in compliance with all relevant laws, rules and
regulations. For a description of these activities, see "Plan of Distribution."
In this prospectus supplement, references to the "depositor" and "Global
Funding" are to Allstate Life Global Funding. References to the "trusts" are to
Allstate Life Global Funding Trusts. References to an "issuing trust" are to a
trust with respect to the series of notes issued and sold to the public by that
trust. These references are not to Allstate Life Insurance Company. Unless
otherwise specified herein or the context otherwise requires, in this prospectus
supplement, references to "Allstate Life" are to Allstate Life Insurance
Company.
In this prospectus supplement, references to "United States dollars," "U.S.
dollars" or "$" are to lawful currency of the United States of America, and
references to "Euro" are to the currency introduced at the start of the third
stage of the European Economic and Monetary Union pursuant to the Treaty
Establishing the European Community, as amended.
S-2
SUMMARY
This section summarizes certain of the legal and financial terms of the
notes, funding notes and funding agreements that are described in more detail in
"Description of the Notes" and "Description of the Funding Agreements" beginning
on pages S-20 and S-49 of this prospectus supplement, "Description of the
Funding Notes" beginning on page 32 of the accompanying prospectus, and other
information described elsewhere in this prospectus supplement or in the
accompanying prospectus. Final terms of any particular series of notes and the
related funding note and funding agreement(s) will be set at the time of
issuance and will be contained in the applicable pricing supplement. That
pricing supplement may add to, update, supplement or clarify the terms contained
in this summary. In addition, you should read the more detailed information
appearing elsewhere in the accompanying prospectus, this prospectus supplement
and the applicable pricing supplement.
The Trusts...................... Each series of notes will be issued by a newly created separate and distinct Delaware
statutory trust (each, a "trust") formed by Allstate Life Global Funding, as trust
beneficial owner, AMACAR Pacific Corp., as administrator (including any successor, the
"administrator"), and Wilmington Trust Company, as Delaware trustee (including any
successor, the "Delaware trustee"), pursuant to the filing of a certificate of trust and
the execution of a trust agreement. Each trust agreement pursuant to which various trusts
may be formed from time to time to issue notes is referred to in this prospectus
supplement as a "trust agreement." Allstate Life Global Funding will be the sole
beneficial owner of each trust that is formed.
Depositor; Issuer of Funding
Notes........................ Allstate Life Global Funding is a registrant as the depositor of the funding agreements
into the issuing trusts and the issuer of the funding notes.
Sponsor; Issuer of Funding
Agreements................... Allstate Life Insurance Company is the sponsor of the programs and a registrant as the
issuer of the funding agreements.
Allstate Life is not affiliated with any trust. None of Allstate Life or any of its
officers, directors, subsidiaries or affiliates owns any beneficial interest in any trust
nor has any of these persons or entities entered into any agreement with any trust other
than in furtherance of the issuance of notes from time to time as contemplated by this
prospectus supplement and the accompanying prospectus.
None of Allstate Life or any of its officers, directors, subsidiaries or affiliates is
affiliated with Global Funding, the Delaware trustee, the administrator, the indenture
trustee or the funding note indenture trustee.
Purposes of Global Funding and
Trusts....................... The primary purpose of Global Funding is to facilitate the programs for the issuance of
notes, including, in connection with each offering of notes, to issue the applicable
funding note. The primary purpose of each trust is to issue the related series of notes
to the public, which notes will be issued only on the original issue date of such notes
and will be secured by one or more funding agreements issued by Allstate Life, and
assigned absolutely to, and deposited into, the issuing trust by Global Funding. Each
trust will use the net proceeds received from issuing its series of notes to acquire one
or more funding agreements. Each trust will hold the collateral described below
pertaining to its series of notes to fund its obligations under that series of notes.
Each trust will pledge and collaterally assign the funding agreement(s) held in that
trust to the indenture trustee for the benefit of the holders of that trust's series of
notes and any other person for whose benefit the indenture trustee is or will be holding
the applicable collateral.
The notes of each series will represent the obligations of the issuing entity only and
will not represent the obligations of, or interest in, any other person or entity, including
Global Funding, Allstate Life, or any of their respective affiliates. Holders of notes of a
series may only look to the funding agreement(s) and any other collateral held in, or pledged
and collaterally assigned to the indenture trustee by, the issuing trust for payment on
their notes and not to the assets of
S-3
Allstate Life or Global Funding, or the assets held in any other trust.
Delaware Trustee................ Unless otherwise specified in the applicable pricing supplement, Wilmington Trust
Company, a Delaware banking corporation, will be the sole trustee of Global Funding and
each trust. In this prospectus supplement and the accompanying prospectus, references to
"Delaware trustee" (i) with respect to any trust are to Wilmington Trust Company (or
another entity specified in the applicable trust agreement), as Delaware trustee of such
trust (including, in each case, any successor); and (ii) with respect to Global Funding
are to Wilmington Trust Company as Delaware trustee of Global Funding (including any
successor). The Delaware trustee will not be obligated in any way to make payments under
or in respect of any notes, any funding notes or any funding agreements. The Delaware
trustee is not affiliated with Allstate Life or the indenture trustee.
Administrator................... Unless otherwise specified in the applicable pricing supplement, AMACAR Pacific Corp.
will be the administrator of Global Funding and each trust. In this prospectus supplement
and the accompanying prospectus, references to the "administrator" (i) with respect to
any trust are to AMACAR Pacific Corp. (or another entity specified in the applicable
trust agreement), as administrator of such trust (including, in each case, any
successor); and (ii) with respect to Global Funding are to AMACAR Pacific Corp. as
administrator of Global Funding (including any successor). The administrator will not be
obligated in any way to make any payments under or in respect of the notes, any funding
notes or any funding agreements. The administrator is not affiliated with Allstate Life
or the indenture trustee.
Indenture Trustee............... Each series of notes will be issued by the issuing trust pursuant to a separate indenture
(each, an "indenture") to be entered into among the issuing trust and The Bank of New York
Trust Company, N.A. (or another entity specified as indenture trustee in the
applicable indenture), in its capacity as indenture trustee (including any successor, the
"indenture trustee"). The indenture trustee will not be affiliated with the trusts, the
Delaware trustee, the administrator, Global Funding or Allstate Life.
Funding Note Indenture Trustee.. Each funding note will be issued by Global Funding pursuant to a separate funding note
indenture (each, a "funding note indenture") to be entered into among Global Funding and
the other parties specified therein, including The Bank of New York Trust Company, N.A.
(or another entity specified as the funding note indenture trustee in the
applicable funding note indenture), in its capacity as funding note indenture trustee
(including any successor, the "funding note indenture trustee"). The funding note
indenture trustee is not affiliated with the trusts, the Delaware trustee, the
administrator, Global Funding or Allstate Life.
Servicer........................ Unless otherwise provided in the pricing supplement for a series of notes, pursuant to
each indenture, The Bank of New York Trust Company, N.A., will perform the
functions of the servicer in respect of the programs.
Diagram of Parties ............. Below is a diagram showing the parties involved in the issuance of notes by each trust.
Funding Agreement(s)
Deposit of Funding Agreement(s)
--- into issuing trust. Funding note --- Security Interest in
| is simultaneously cancelled. | Funding Agreement(s)
| |
Funding | |
Agreement(s) | Funding Note |
- ------------------- ----------------- ---------------- --------------
|Allstate Life |---------------> |Allstate Life |------------------>| | ---------------- | Indenture |
|Insurance Company|<-------------- |Global Funding |<----------------- | Issuing Trust| | Trustee |
- ------------------- Note Proceeds ----------------- Note Proceeds ---------------- --------------
^ |
| |
Note
Proceeds Notes
| |
| v
----------------
| |
| Noteholders |
----------------
S-4
Allstate Life Can Issue Its Own
Medium Term Notes and Funding
Agreements Directly to
Investors.................... Allstate Life is able to issue its own medium term notes directly to investors and does
issue funding agreements directly to qualified investors. However, by securing each
trust's notes with one or more of Allstate Life's funding agreements, such trust's notes
are secured by an asset that would have a higher priority in insolvency than unsecured
medium term notes of Allstate Life and, accordingly, may be entitled to receive a higher
investment rating than unsecured medium term notes of Allstate Life. In addition, funding
agreements are very difficult to transfer and have no active secondary market. By
securing each trust's notes with one or more of Allstate Life's funding agreements,
investors may be able to avail themselves of many of the benefits of Allstate Life's
funding agreements while benefiting from the liquidity afforded by each trust's medium
term notes.
Agents.......................... Merrill Lynch, Pierce, Fenner & Smith Incorporated, A.G. Edwards & Sons, Inc., Banc of
America Securities LLC, Barclays Capital Inc., Bear, Stearns & Co. Inc., Citigroup Global
Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman,
Sachs & Co., Greenwich Capital Markets, Inc., J.P. Morgan Securities Inc., Lehman
Brothers Inc., Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia
Capital Markets, LLC.
Secured Medium Term Notes
Program ..................... This prospectus supplement relates to notes that each trust may issue and sell primarily
to institutional investors under this secured medium term notes program.
Allstate Life(R) CoreNotes(R)
Program...................... Included in the registration statement, of which this prospectus supplement is a part,
is another prospectus supplement (the "related prospectus supplement") relating to notes
that may be issued and sold primarily to retail investors by one or more newly established
Delaware statutory trusts under the related Allstate Life(R) CoreNotes(R) program. The
terms of the Allstate Life(R) CoreNotes(R) are identical in all material respects to the
terms of the notes to be sold under this program, as described in this prospectus supplement,
except that the Allstate Life(R) CoreNotes(R):
o may not be issued as amortizing notes;
o will be denominated in U.S. dollars only;
o will not provide for the payment of additional amounts
relating to any required withholding under any
circumstances; and
o may contain a survivor's option, permitting optional
repayment of notes of a series of notes, subject to
certain limitations, prior to maturity, if requested,
following the death of the beneficial owner of notes of
that series.
Amount of the Notes............. The trusts may collectively issue up to a maximum of $8,400,000,000 of notes, or the
equivalent in one or more foreign or composite currencies, in connection with this
prospectus supplement, less any amount of notes previously issued under this program, the
related Allstate Life(R) CoreNotes(R) program pursuant to the related prospectus supplement
or otherwise under the accompanying prospectus.
Flow of Funds................... All funds deposited with the indenture trustee pursuant to an indenture in respect of
notes of a series, except when an event of default has occurred and is continuing under
the indenture, shall be held in trust in the applicable collection account and applied by
the indenture trustee, in accordance with the provisions of the notes of such series and
the applicable indenture, to the payment through any paying agent, to the persons
entitled
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thereto, of the principal, premium, if any, interest and additional amounts, if
any, for whose payment such money has been deposited with or received by the indenture
trustee. If no event of default with respect to the notes of a series has occurred and
is continuing, the following priority of payments shall apply:
o First: to the payment of principal, any premium and interest, any additional
amounts, and any other amounts then due and owing on the notes of such series,
ratably, without preference or priority of any kind, according to the aggregate
amounts due and payable on such notes;
o Second: to the payment of any other obligations then due and owing with respect
to such series of notes, ratably, without preference or priority of any
kind; and
o Third: to the payment of any remaining balance to the issuing trust for
distribution by the Delaware trustee in accordance with the provisions of the
applicable trust agreement.
Any funds collected by the indenture trustee following an event of default, and during the
continuance thereof, under the applicable indenture in respect of the notes of a series
shall be held in trust in the applicable collection account and be applied in the
following order at the date or dates fixed by the indenture trustee and, in case of the
distribution of such funds on account of principal, any premium and interest and any
other amounts due and owing, upon presentation of the global security or
certificates representing the notes of such series and the notation thereon of the
payment if only partially paid or upon the surrender thereof if fully paid:
o First: to the payment of costs and expenses, includingreasonable
compensation to the indenture trustee and each predecessor indenture trustee
and their respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the indenture trustee and each predecessor
indenture trustee except as those adjudicated in a court of competent jurisdiction
to be the result of any such indenture trustee's negligence or bad faith, in an
aggregate amount of no more than $250,000 for all series of notes outstanding;
o Second: to the payment of principal, any premium and interest, any additional
amounts and any other amounts then due and owing on the notes of such series,
ratably, without preference or priority of any kind, according to the aggregate
amounts due and payable on such notes;
o Third: to the payment of any other obligations then due and owing with respect to
such series of notes, ratably, without preference or priority of any kind; and
o Fourth: to the payment of any remaining balance to the issuing trust for distribution
by the Delaware trustee in accordance with the provisions of the applicable
trust agreement.
All funds and other property received by the Delaware trustee on behalf of the issuing trust in
respect of the applicable collateral will be deposited into the payment account of such trust
and will be distributed by such trust as follows:
o First: to the indenture trustee for the payment of all amounts then due and unpaid
upon the applicable series of notes and any other amounts due and payable
in accordance with the applicable indenture; and
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o Second: upon the final redemption of the applicable series of notes and payment
of any amounts payable in respect thereof, any remaining funds and other property
deposited into the payment account shall be distributed to the Delaware trustee for
distribution as provided below.
In connection with the termination of any trust that is formed and the distribution of all
amounts from the applicable payment account in accordance with the priority described above,
the Delaware trustee will distribute any amounts received in accordance with the second clause of
the immediately preceding paragraph and any other remaining assets of the trust in the
following order of priority:
o First: to pay all expenses and other liabilities owed by the applicable trust; and
o Second: any remaining funds and other property shall be paid to the trust beneficial
owner.
Terms of the Notes:
Status....................... o The notes of a series will represent the unconditional, direct, non-recourse
and unsubordinated obligations of the issuing entity and will rank equally among
themselves.
o Each series of notes may be accelerated in the payment of principal and outstanding
interest if an event of default under the notes of such series occurs. Upon the
occurrence of an event of default, the indenture trustee on behalf of the
holders of notes of such series may only proceed against the collateral held in
the issuing trust.
o The notes of each series are not intended to be insurance contracts,
insurance policies or funding agreements.
o The notes of each series will represent the obligations of the issuing entity only
and will not represent the obligations of, or interest in, any other person or entity,
including Global Funding, Allstate Life or any of their respective affiliates.
o The notes are not guaranteed by any person or entity.
o The notes will not benefit from any insurance guaranty fund coverage or any
similar protection.
Payment of Principal and
Interest..................... o Principal and interest payments, if any, on any series of notes will be
made solely from the proceeds of one or more funding agreements, and any
other collateral, securing such series of notes. Each series of notes may
be interest bearing or non-interest bearing.
o Each series of notes that bears interest may bear interest at either a fixed
rate or a floating rate, or a combination of fixed and floating rates, as specified
in the applicable pricing supplement.
o A trust may issue amortizing notes that pay an amount in respect of both interest
and principal amortized over the life of the notes, if so specified in the
applicable pricing supplement.
o The principal amount of each note (other than amortizing notes) will be
payable on its stated maturity date, repayment date or redemption date, as
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specified in the applicable pricing supplement, at the corporate trust office of
the paying agent or any other place designated by the issuing trust.
o Interest, if any, will be payable on the dates set forth in the applicable pricing
supplement.
Interest Rate................ o Each series of fixed rate notes will bear interest from its date of issue at the rate
stated in the applicable pricing supplement until the principal is paid. Each
series of floating rate notes will bear interest from the date of issue until the
principal is paid at a rate determined by reference to an interest rate or interest
rate formula, which may be adjusted by a spread and/or spread multiplier (each as
more fully described under "Description of the Notes"). The pricing supplement for a
series of floating rate notes will designate one or more of the following base rates,
along with the index maturity for that base rate:
o the CD Rate,
o the CMT Rate,
o the Commercial Paper Rate,
o the Constant Maturity Swap Rate
o the Eleventh District Cost of Funds Rate,
o EURIBOR,
o the Federal Funds Rate,
o LIBOR,
o the Prime Rate, or
o the Treasury Rate.
Redemption and Repayment............. o A trust will redeem its series of notes if Allstate Life redeems each funding
agreement securing such series of notes. Except as otherwise specified in the
accompanying prospectus, this prospectus supplement or the applicable
pricing supplement, the funding agreement(s) securing a series of notes will not be
redeemable by Allstate Life, and a series of notes will not be repayable at
the option of the holders prior to its stated maturity date. Unless
otherwise specified in the applicable pricing supplement, the notes will
not be subject to any sinking fund.
Maturities............................ o Each series of notes will mature between nine months and 30 years from its date
of original issuance. Each series of notes will have the same maturity date
as the related funding agreement(s).
Currencies and
Denominations.....................Unless otherwise specified in the applicable pricing supplement, notes of a series will be
denominated in U.S. dollars and will be issued and sold in denominations of $1,000 and
integral multiples of $1,000 in excess thereof. Each funding note and funding agreement
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will be issued in the same currency as the notes of the related series. Each funding
note will be issued in the same denomination as the notes of the applicable
series.
Listing of Notes..................... Unless otherwise specified in the applicable pricing supplement, a series of notes
will not be listed on any securities exchange.
Forms of Notes....................... Each series of notes will be issued in fully registered form and, unless otherwise
specified in the applicable pricing supplement, will be initially represented by one or
more book-entry notes registered in the name of Cede & Co., the nominee of The
Depository Trust Company (including any successor thereto, "DTC"), as depositary, or in
the name of a common depositary for Euroclear Bank S.A./N.V., as operator of the
Euroclear System (including any successor thereto, "Euroclear") or Clearstream Banking,
societe anonyme (including any successor thereto, "Clearstream Luxembourg"), in each case
as depositary or by one or more definitive notes. Each book-entry note will be held
by the indenture trustee as custodian for the applicable depositary.
Clearing Systems.................... Unless otherwise specified in the applicable pricing supplement, the notes of each series
will be cleared through DTC.
Collateral........................... The notes of a series will be secured by the right, title and interest of the
issuing trust in and to (1) the funding agreement(s) held by that trust, (2) all
proceeds of such funding agreement(s) and (3) all books and records pertaining
to such funding agreement(s). In this prospectus supplement, references to
"other collateral" are to items (2) and (3) above.
Funding Agreements.................. The funding agreements are unsecured obligations of Allstate Life, an Illinois stock
life insurance company. In the event of insolvency of an Illinois insurance company,
claims against the insurer's estate are prioritized pursuant to Section 5/205 of the
Illinois Insurance Code. Under Section 5/205(1)(d) of the Illinois Insurance Code,
claims by "policyholders, beneficiaries, and insureds, under insurance policies,
annuity contracts, and funding agreements" receive payment prior to any
distribution to general creditors not falling within any other priority
class under the Illinois Insurance Code.
The registrants believe that in a properly prepared and presented case in a
delinquency proceeding under Article XIII of the Illinois Insurance Code, 215 ILCS
Section 5/187 et seq.(the "Illinois Liquidation Act"), the timely and properly filed
claims of an owner under the funding agreement (with the possible exception of claims
for Additional Amounts, as discussed below) would be entitled to distribution
pari passu with claims made by other policyholders, beneficiaries, and insureds
under other insurance policies, insurance contracts, annuities and funding agreements
issued by Allstate Life, and the claims of the Illinois Life and Health Insurance
Guaranty Association, and any similar organization in another state, in accordance
with Section 5/205(1)(d) of the Illinois Liquidation Act, and an owner's claims under
the funding agreement should not be recharacterized as other than the claims of a
policyholder, beneficiary, or insured under an insurance policy, insurance contract,
annuity or funding agreement.
The obligations of Allstate Life under any funding agreement will not be guaranteed
by any person or entity.
If a funding agreement so provides, Allstate Life may be required to pay Additional
Amounts (as such term is defined therein) to the indenture trustee as collateral
assignee of the funding agreement. For a discussion regarding payment of Additional
Amounts, see "Description of the Notes--Withholding Tax and Payment of Additional
Amounts." Although such payments could be viewed as a claim under the funding
agreements within the meaning of Section 5/205(1)(d), they may also be argued to be
a separate payment obligation. Therefore, while in a proceeding before a court of
competent jurisdiction the court might find that a claim for an Additional Amount
constitutes a claim under a funding agreement, it also might find that such a
claim is not a claim entitled to the priority afforded by Section 5/205(1)(d).
If a claim for an Additional Amount does not constitute a claim entitled to
the priority afforded by Section 5/205(1)(d), then in a properly prepared
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and presented case any claim for an Additional Amount would be entitled to the same
priority as claims of general creditors of Allstate Life under Section 5/205(1)(g).
With respect to the issuance of any series of the notes, the aggregate amount of
Allstate Life's liabilities that would rank pari passu with each funding agreement
securing such series of notes is disclosed in the financial statements of Allstate
Life contained in Allstate Life's most recent Annual Report on Form 10-K or Quarterly
Report on Form 10-Q filed with the SEC, in each case as of the date of such financial
statements. This amount appears in the Consolidated Statements of Financial Position
as a liability under the line item entitled "Contractholder funds."
Terms of the Funding Notes......... Each trust will use the net proceeds received from the issuance of the related series
of notes to purchase a funding note in definitive form (each, a "funding note")
from Global Funding. Each funding note will have a principal amount equal to the
principal amount of the related series of notes. Each funding note will otherwise
have payment and other terms substantially similar to the related series of notes,
except that each funding note will contain a provision that makes it immediately
cancelable upon the assignment and deposit by Global Funding of the related funding
agreement(s) to the related issuing trust. Such cancellation shall operate
as a redemption and satisfaction of such funding note.
Terms of the Funding
Agreements..................... Global Funding will use the net proceeds received from the sale of the related
funding note to purchase one or more funding agreements issued by Allstate Life.
Global Funding will immediately pledge and collaterally assign each such
funding agreement to the funding note indenture trustee and immediately
thereafter assign absolutely to, and deposit into, the issuing trust each such
funding agreement. The funding agreement(s) will have a principal amount equal to
the principal amount of the related series of notes. The funding agreement(s) will
otherwise have payment and other terms substantially similar to the related
series of notes.
Withholding Tax.................... All amounts due in respect of the notes of a series will be made without any
applicable withholding or deduction for or on account of any present or future taxes,
duties, levies, assessments or other governmental charges of whatever nature
imposed or levied by or on behalf of any governmental authority, unless such
withholding or deduction is required by law. Neither the notes of the applicable
series nor the related funding note or funding agreement(s) will provide for the payment
of additional amounts relating to any required withholding or deduction imposed or
levied on payments in respect of a series of notes or the related funding note or funding
agreement(s). As a result, the risk of any such withholding or deduction, whether or not
as a result of a change in law or otherwise, will be borne by the holders of such series
of notes.
Ratings............................. Unless otherwise indicated in the applicable pricing supplement, it is expected
that each series of notes, and the related funding note and the funding agreement(s)
securing such series of notes will have an issue credit rating of "AA" from Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's").
It is expected that the program will be rated "Aa2" by Moody's Investors Service, Inc.
("Moody's") and "AA" by Standard & Poor's. If Moody's or Standard & Poor's changes the
program rating, the new program rating will be specified in the applicable pricing
supplement. Notes of a series will be issued under the program only in the event that, at
the time of issuance of such series of notes, at least one nationally recognized rating
agency would assign an investment grade rating to such series of notes, the related
funding note and the funding agreement(s) securing such series of notes.
Fees and Expenses................. Allstate Life and Global Funding entered into an amended and restated support and
expenses agreement dated as of March 15, 2006 (the "depositor support agreement").
Pursuant to the depositor support agreement, Allstate Life agreed, among other things,
to pay certain costs and expenses relating to the offering, sale and issuance of
each funding note and certain costs, expenses and taxes of Global Funding.
Pursuant to the depositor
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trust agreement, Allstate Life also agreed to indemnify each service provider of Global
Funding, as well as Global Funding, with respect to certain matters.
In connection with the issuance of a series of notes, Allstate Life and the issuing
trust will enter into a support and expenses agreement (each, a "support agreement").
Under each support agreement, Allstate Life will agree to pay certain costs and expenses
relating to the offering, sale and issuance of the applicable series of notes and
certain costs, expenses and taxes of the issuing trust. Pursuant to each support
agreement, Allstate Life will also agree to indemnify each service provider of the issuing
trust, as well as the issuing trust, with respect to certain matters.
It is anticipated that the indenture trustee fees for this program and the Allstate
Life(R) CoreNotes(R) Program will be approximately $60,000 annually.
Governing Law.................... The notes, each indenture, each funding note and each funding note indenture will
be governed by, and construed in accordance with, the laws of the State of New York. The
depositor trust agreement is, and each trust agreement will be, governed by, and construed
in accordance with, the laws of the State of Delaware. The funding agreements will be
governed by the laws of the State of Illinois.
United States Federal Income
Tax Considerations............ Special tax counsel to Global Funding will render its opinion that under current
law and based on certain facts and assumptions contained in such opinion, for United
States Federal income tax purposes, Global Funding and each trust will be ignored and
that the notes will be classified as indebtedness of Allstate Life. Each holder
and beneficial owner of the notes, by purchase of the notes, agrees to such
treatment. Accordingly, holders of the notes generally will have the same United States
federal income tax consequences from the purchase of the notes as they would had they
purchased a debt obligation issued directly by Allstate Life. Prospective purchasers of the
notes must carefully consider the tax consequences of the ownership and disposition of the
notes set forth under "United States Federal Income Tax Considerations."
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RISK FACTORS
Your investment in the notes includes risks. In consultation with your own
financial and legal advisers, you should carefully consider, among other
matters, the following discussion of risks before deciding whether an investment
in the notes is suitable for you. The notes are not an appropriate investment
for you if you do not understand their significant components and/or financial
matters. You should also consult the discussion of risk factors set forth in
Allstate Life's most recent Annual Report on Form 10-K, which is incorporated
into this prospectus supplement and the accompanying prospectus by reference.
Risk Factors Relating to the Depositor and the Trusts
Each trust will have limited resources and therefore its ability to make timely
payments with respect to its series of notes will depend upon Allstate Life
making payments under the relevant funding agreement
The ability of a trust to make timely payments with respect to the related
series of notes is principally dependent upon Allstate Life making the related
payments under each relevant funding agreement. Each trust is a special purpose
statutory trust formed for the purpose of the issuance of the related series of
notes. The obligations under a series of notes will be secured by and payable
solely from the collateral held in the issuing trust. No holder of a series of
notes will have any right to receive payments from the collateral related to any
other series of notes.
The notes of a series will represent the obligations of the issuing entity only
and will not represent the obligations of, or interest in, any other person or
entity, including Global Funding, Allstate Life or any of their respective
affiliates
The notes of a series will represent the obligations of the issuing entity
only and will not represent the obligations of, or interest in, any other person
or entity, including Global Funding, Allstate Life or any of their respective
affiliates. The notes will not be guaranteed by any person or entity. Except
pursuant to the terms of the funding agreement(s) included in the collateral for
each series of notes, none of these entities nor any agent, trustee or
beneficial owner of Global Funding or the trusts, in respect of any trust, is
under any obligation to provide funds or capital to Global Funding or the trusts
or with respect to any series of notes issued by the trusts. The net worth of
Global Funding on the date hereof is approximately $1,000 and is not expected to
increase materially. The net worth of each trust is expected to be minimal.
Global Funding is and the trusts will be special purpose entities and, as of the
date of issue of any series of notes, the issuing trust will have no prior
operating history
Global Funding is and the trusts will be special purpose statutory trusts
organized under the laws of the State of Delaware. Global Funding exists for the
primary purpose of facilitating the programs for the issuance of notes. Each
trust will exist for the exclusive purposes of: issuing and selling one series
of notes to investors; using the net proceeds from the sale of series of notes
to acquire the related collateral, including one or more funding agreements; and
engaging in other activities necessary or incidental thereto. As of the date of
issue of any series of notes, the issuing trust will have, no prior operating
history.
Risk Factors Relating to the Notes
The notes of a series represent non-recourse obligations of the issuing entity
The obligations under the notes of a series represent non-recourse
obligations payable solely from the applicable collateral constituting the
assets of the issuing trust. If any event of default shall occur under any
series of the notes, the rights of the holders of the notes of such series and
the indenture trustee, on behalf of such holders, will be limited to a
proceeding against the applicable collateral. None of such holders or the
indenture trustee will have the right to proceed against the collateral related
to any other series of notes, Global Funding, any other trust or any of Allstate
Life, its officers, directors, affiliates, employees or agents or any of the
trustees, beneficial owners or agents, or any of their respective officers,
directors, affiliates, employees or agents in the case of any judgment in which
there is deficiency remaining after foreclosure of any property included in such
collateral. If an event of default shall have occurred under a series of notes,
the indenture trustee will be entitled to have its fees and expenses paid solely
from the collateral of such series of notes before holders of the notes of such
series receive payment of the amounts then due and owing with respect to their
notes; provided, that such priority of the indenture trustee over the holders of
the notes of a series will be limited to an aggregate amount of no more than
$250,000 for all series of notes. All claims of the holders of a series of notes
in excess of amounts received from the related collateral will be extinguished.
In the absence of an event of default under a funding agreement, the occurrence
of an event of default under the related series of notes will not give rise to
any right to accelerate such applicable funding agreement. In that event,
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it is possible that the obligations under the applicable series of notes may be
accelerated while the obligations of Allstate Life under the applicable funding
agreement(s) would not be similarly accelerated. If this occurs, the indenture
trustee may have no or limited ability to proceed against the applicable funding
agreement(s) and the related collateral and holders of the notes may not be paid
in full, or in a timely manner upon such acceleration. See "Description of the
Indentures--Events of Default" in the accompanying prospectus.
Allstate Life will be the sole obligor under the funding agreements
Since Allstate Life will be the sole obligor under the funding agreements,
the ability of a trust to meet its obligations, and your ability to receive
payments from such trust, with respect to a particular series of notes, will be
principally dependent upon Allstate Life's ability to perform its obligations
under each applicable funding agreement held by the issuing trust. Despite this,
you will have no direct contractual rights against Allstate Life under any such
funding agreement. Pursuant to the terms of each funding agreement, recourse
rights to Allstate Life will belong to the issuing trust, its successors and
permitted assignees. In connection with the offering and sale of a series of
notes, the issuing trust will pledge, collaterally assign and grant a security
interest in the collateral for such series of notes to the indenture trustee on
behalf of the holders of the applicable series of notes and the other persons
identified in the relevant indenture. Recourse to Allstate Life under each such
funding agreement will be enforceable only by the indenture trustee as a secured
party for the benefit of holders of such series of notes and any other person
for whose benefit the indenture trustee is or will be holding the collateral.
Accordingly, if Allstate Life fails to perform its obligations under the
applicable funding agreement(s), your ability to receive payments from the
issuing trust would be materially and adversely affected.
Nonetheless, since Allstate Life is a registrant, purchasers of notes may
be able to proceed directly against Allstate Life to enforce their rights under
the Federal securities laws and their rights under the Federal securities laws
will be no different than if they purchased the underlying funding agreements
directly from Allstate Life.
The notes could be deemed to be participations in the funding agreements or
could otherwise be deemed to be contracts of insurance and holders of the notes
could be found to be acting as insurance agents or brokers
The laws and regulations of each state of the United States and the
District of Columbia (the "covered jurisdictions") contain broad definitions of
the activities that may constitute the conduct of the business of insurance in
such jurisdictions. Because the primary asset of each trust will be one or more
funding agreements issued by Allstate Life, which will be sold to, and deposited
into, the issuing trust by Global Funding, it is possible that a trust's
issuance of notes, Global Funding's issuance of the related funding note or the
performance of the issuing trust's obligations under the notes, including the
payment or prepayment of amounts due under the notes, or the purchase, resale or
assignment of the notes by any investor or any person who acquires the notes
directly or indirectly from such investor
o could be characterized by one or more covered jurisdictions as the
conduct of the business of insurance by Global Funding, the issuing
trust, any such investor or any such other person or
o could otherwise subject Global Funding, the issuing trust, any such
investor or any such other person to regulation under the insurance
laws of one or more covered jurisdictions.
This could, among other effects, require such persons to be subject to
regulatory licensure or other qualifications and levels of compliance that
cannot practically be achieved. Failure to comply with such requirements could
subject any such person to regulatory penalties. In the event Global Funding or
any trust is subject to any such penalties or any other liabilities resulting
from such regulation, the ability of holders to receive payment under the notes
could be materially and adversely affected. In addition, any such failure to
comply or the threat of any such regulation could reduce liquidity with respect
to the notes, prevent an investor from transferring notes and reduce the
marketability and market value of the notes. Therefore, any such regulation or
threat of regulation by any one or more covered jurisdictions could result in an
investor either being unable to liquidate its investment in the notes or, upon
any such liquidation, receiving a value significantly less than the initial
investment in the notes.
The Illinois Department of Insurance has confirmed that it does not
consider the sale of publicly offered funding agreement backed medium term notes
to violate the Illinois Insurance Code. In addition, the Illinois Department of
Insurance has approved the form of funding agreement to be used in connection
with each offering of notes.
Based primarily upon communications with the staff of the insurance
regulatory bodies in most states and the legal advice of LeBoeuf, Lamb, Greene &
MacRae LLP, Allstate Life and Global Funding believe that:
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o the notes should not be subject to regulation as participations in the
funding agreements themselves or otherwise constitute insurance
contracts under the insurance laws of the covered jurisdictions; and
o Global Funding, the trusts and persons selling or purchasing the notes
should not be subject to regulation as doing an insurance business
under the insurance laws of the covered jurisdictions by virtue of
their respective activities in connection with the offer, sale and/or
purchase of the notes.
There are, however, wide variations in the insurance laws of the covered
jurisdictions, subtle nuances in their application, and a general absence of any
consistent pattern of interpretation or enforcement. Insurance regulatory
authorities have broad discretionary powers in administering the insurance laws,
including the authority to modify or withdraw a regulatory interpretation,
impose new rules, and take a position contrary to Allstate Life's. In addition,
state courts are not bound by any regulatory interpretations and could take a
position contrary to Allstate Life's. Consequently, the purchase, resale or
assignment of the notes or the funding notes could subject the parties to such
transaction to regulation or enforcement proceedings under the insurance laws of
one or more covered jurisdictions.
Notes of a series may be redeemed early if the trust becomes obligated to pay
Additional Amounts
If a trust is obligated to withhold or deduct any taxes or pay any
additional amount (as defined in "Description of the Notes--Withholding Tax and
Payment of Additional Amounts") with respect to any payment on the notes of a
series to non-U.S. Holders, or if there is a material probability that the
issuing trust will become obligated to withhold or deduct any such taxes or pay
any additional amount (in the opinion of independent legal counsel selected by
Allstate Life), in each case pursuant to a change in or amendment to any United
States tax laws or any regulation or ruling thereunder or any change in the
position of the Internal Revenue Service regarding the application or
interpretation thereof, then Allstate Life, pursuant to the terms of the
relevant funding agreement(s), may terminate the relevant funding agreement(s).
If Allstate Life terminates the relevant funding agreement(s), the issuing trust
will redeem the particular series of notes by giving not less than 30 nor more
than 75 days' notice. Upon such redemption, the trust will pay holders of such
series of notes the outstanding amounts then due and owing with respect to their
notes. If a trust redeems your notes, you may not be able to invest the
redemption proceeds in a comparable security at an interest rate equal to the
interest rate on your notes being redeemed.
Payments under funding agreements may be insufficient to pay principal and
interest, if any, under the notes
Payments of the principal of and any interest on a series of notes will be
made solely from the payments the issuing trust receives under the applicable
funding agreement(s). Unless otherwise specified in this prospectus supplement
or the applicable pricing supplement, Allstate Life will not pay any Additional
Amounts (as defined in the applicable funding agreement) in respect of a funding
agreement to compensate for any withholding or deduction for or on account of
any present or future taxes, duties, levies, assessments or governmental charges
of whatever nature imposed or levied on payments in respect of a funding
agreement, by or on behalf of any governmental authority and each holder of a
note of the related series of notes will be deemed for all purposes to have
received cash in an amount equal to the portion of such withholding or deduction
that is attributable to such holder's interest in the notes, as equitably
determined by the issuing trust. Under this circumstance, the issuing trust will
not actually pay, or cause to be paid, to such holder all of the amounts which
would have been receivable by such holder in the absence of such taxes, duties,
levies, assessments or other governmental charges.
Redemption may adversely affect your return on the notes
If your notes are redeemable at the option of the issuing trust, it may
choose to redeem your notes at times when prevailing interest rates are
relatively low. In addition, if your notes are subject to mandatory redemption,
the issuing trust may be required to redeem your notes also at times when
prevailing interest rates are relatively low. As a result, you may not be able
to reinvest the redemption proceeds in a comparable security at an interest rate
equal to the interest rate on your notes being redeemed.
There may not be any trading market for your notes; many factors affect the
trading and market value of your notes
Upon issuance, the notes of a series will not have an established trading
market. No assurance can be given that a trading market for your notes will ever
develop or be maintained if developed. In addition to the creditworthiness of
Allstate Life and the issuing trust, many factors affect the trading market for,
and trading value of, your notes. These factors include:
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o the complexity and volatility of the formula applicable to your notes;
o the method of calculating the principal, premium and interest in
respect of your notes;
o the time remaining to the maturity of your notes;
o the outstanding amount of the applicable series of notes;
o any redemption features of your notes;
o the amount of other debt securities linked to the formula applicable
to your notes; and
o the level, direction and volatility of market interest rates
generally.
There may be a limited number of buyers if you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all. In addition, notes that are designed for specific investment
objectives or strategies often experience a more limited trading market and more
price volatility than those not so designed. You should not purchase notes
unless you understand and know you can bear all of the investment risks
involving your notes.
Foreign currency notes are subject to exchange rate and exchange control risks
If you invest in notes that are denominated and/or payable in a currency
other than U.S. dollars, which are referred to in this prospectus supplement as
"foreign currency notes," you will be subject to significant risks not
associated with an investment in a debt security denominated and payable in U.S.
dollars. These risks include the possibility of material changes in the exchange
rate between U.S. dollars and the applicable foreign currency and the imposition
or modification of exchange controls by the applicable governments. The trusts
will have no control over the factors that generally affect these risks,
including economic, financial and political events and the supply and demand for
the applicable currencies. Moreover, if payments on your foreign currency notes
are determined by reference to a formula containing a multiplier or leverage
factor, the effect of any change in the exchange rates between the applicable
currencies will be magnified. In recent years, exchange rates between certain
currencies have been highly volatile and volatility between these currencies or
with other currencies may be expected in the future. Fluctuations between
currencies in the past are not necessarily indicative, however, of fluctuations
that may occur in the future. Depreciation of your payment currency would result
in a decrease (1) in the equivalent yield in U.S. dollars of your foreign
currency notes, (2) in the U.S. dollar equivalent value of the principal and any
premium payable at maturity or any earlier redemption of your foreign currency
notes and (3) generally, in the U.S. dollar equivalent market value of your
foreign currency notes.
Governmental exchange controls could affect exchange rates and the
availability of the payment currency for your foreign currency notes on a
required payment date. Even if there are no exchange controls, it is possible
that your payment currency will not be available on a required payment date for
circumstances beyond the control of the issuing trust. In these cases the
issuing trust will be allowed to satisfy the obligations in respect of your
foreign currency notes in U.S. dollars.
Ratings of the medium term note program described in this prospectus supplement
and the accompanying prospectus, the Allstate Life(R) CoreNotes(R) program and
each series of notes may not reflect all risks of an investment in the notes
Each series of notes will be rated by at least one nationally recognized
statistical rating organization. The ratings of such notes will primarily
reflect the financial strength of Allstate Life and will change in accordance
with the rating of Allstate Life's financial strength and with any change in the
priority status under Illinois law of funding agreements. Any rating is not a
recommendation to purchase, sell or hold any particular security, including the
notes. Such ratings do not comment as to market price or suitability for a
particular investor. In addition, there can be no assurance that a rating will
be maintained for any given period of time or that a rating will not be lowered
or withdrawn in its entirety. The ratings of the medium term note program
described in this prospectus supplement and the accompanying prospectus, the
Allstate Life(R) CoreNotes(R) program and each series of notes may not reflect
the potential impact of all risks related to structure and other factors on any
trading market for, or trading value of, your notes.
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An increase in market interest rates could result in a decrease in the value of
any notes bearing interest at a fixed rate
If market interest rates increase above the interest rate of notes bearing
interest at a fixed rate, such notes bearing interest at a fixed rate generally
decline in value because debt instruments of the same face value priced at
market interest rates will yield higher income. Consequently, if you purchase
fixed rate notes and market interest rates increase above the fixed interest
rate on the notes you have purchased, the market value of your notes may
decline. No assurance can be given regarding the future level of market interest
rates.
If you purchase discount notes, the amount payable to you upon early redemption,
repayment or acceleration of these notes may be less than the principal amount
(i.e., par) of the notes plus accrued but unpaid interest and premium, if any
If you purchase discount notes, the amount payable to you upon early
redemption, repayment or acceleration of these notes may be less than the
principal amount thereof plus accrued and unpaid interest. The amount payable
will be determined by the formula set forth in this prospectus supplement or the
applicable pricing supplement.
Risk Factors Relating to the Collateral
The funding agreements are unsecured obligations of Allstate Life. If the
funding agreements were not determined to be insurance contracts, they would be
accorded the same priority in an insolvency of Allstate Life as its other
general unsecured obligations
The primary assets of each trust will be one or more funding agreements,
and payments on the notes of a series will principally depend on payments under
each related funding agreement(s). In addition, each trust will grant a security
interest in, pledge and assign as collateral each funding agreement it acquires
with the proceeds from the offering of a series of notes together with the
related collateral to the indenture trustee, for the benefit of the holders of
the notes of such series and any other person for whose benefit the indenture
trustee is or will be holding the collateral, to secure the obligations under
that series of notes.
In the event of insolvency of an Illinois insurance company, claims against
the insurer's estate are prioritized pursuant to Section 5/205 of the Illinois
Insurance Code. Under Section 5/205(1)(d) of the Illinois Insurance Code, claims
by "policyholders, beneficiaries, and insureds, under insurance policies,
annuity contracts, and funding agreements" receive payment prior to any
distribution to general creditors not falling within any other priority class
under the Illinois Insurance Code. The funding agreements are unsecured
obligations of Allstate Life.
Lord, Bissell & Brook LLP, special Illinois insurance regulatory counsel of
Allstate Life, has opined that, subject to the limitations, qualifications and
assumptions set forth in its opinion letter, in a properly prepared and
presented case, (1) in a delinquency proceeding under Article XIII of the
Illinois Insurance Code, 215 ILCS Section 5/187 et seq. (the "Illinois
Liquidation Act"), the timely and properly filed claims of an owner under the
funding agreement (with the possible exception of claims for Additional Amounts,
as discussed below) would be entitled to distribution pari passu with claims
made by other policyholders, beneficiaries, and insureds under other insurance
policies, insurance contracts, annuities and funding agreements issued by
Allstate Life, and the claims of the Illinois Life and Health Insurance Guaranty
Association, and any similar organization in another state, in accordance with
Section 5/205(1)(d) of the Illinois Liquidation Act, and (2) an owner's claims
under the funding agreement should not be recharacterized as other than the
claims of a policyholder, beneficiary, or insured under an insurance policy,
insurance contract, annuity or funding agreement.
In the absence of controlling judicial precedents, the opinion of Lord,
Bissell & Brook LLP is based on a reasoned analysis of Illinois statutes, as
well as application of other states' judicial decisions involving similar or
analogous circumstances, and is subject to the limitations, qualifications and
assumptions set forth in its opinion letter. Investors should note that in the
event of the insolvency of an insurance company, however, the judicial
application of statutes governing the distribution of the insurer's general
assets has typically proceeded on a case-by-case basis.
Additional Amounts may be considered a separate payment obligation and may not
be subject to the same priority as other amounts claimed under the funding
agreements
If a funding agreement so provides, Allstate Life may be required to pay
Additional Amounts (as such term is defined therein) to the indenture trustee as
collateral assignee of the funding agreement. Although such payments could be
viewed as a claim under the funding agreements within the meaning of Section
5/205(1)(d), they may also be argued to be a separate payment obligation.
Therefore, while in a proceeding before a court of competent jurisdiction, the
court might find
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that a claim for an Additional Amount constitutes a claim under a funding
agreement, it also might find that such a claim is not a claim entitled to the
priority afforded by Section 5/205(1)(d). Lord, Bissell & Brook LLP has opined
that if a claim for an Additional Amount does not constitute a claim entitled to
the priority afforded by Section 5/205(1)(d), then in a properly prepared and
presented case any claim for an Additional Amount would be entitled to the same
priority as claims of general creditors of Allstate Life under Section
5/205(1)(g). Accordingly, in the event of the insolvency of Allstate Life, your
claim for any payments of Additional Amounts may be subordinated to claims for
other amounts under the applicable funding agreement.
Changes in Federal tax legislation could adversely affect Allstate Life's
business
Under the Internal Revenue Code of 1986, as amended (the "Code"), United
States Federal income tax payable by policyholders on investment earnings is
deferred during the accumulation period of certain life insurance and annuity
products. Thus, taxes, if any, are payable on income attributable to a
distribution under the contract for the year in which the distribution is made.
This favorable tax treatment may give certain of Allstate Life's products a
competitive advantage over other noninsurance products. On May 28, 2003,
President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003,
which reduces the federal income tax rates applicable to certain dividends and
capital gains realized by individuals. This legislation may lessen the
competitive advantage of certain of Allstate Life's products vis-a-vis other
investments that generate dividend and/or capital gain income. As a result,
demand for certain of Allstate Life's products that offer income tax deferral
may be negatively impacted. Additionally, Congress has from time to time
considered other legislation that would reduce or eliminate the benefits to
policyowners of the deferral of taxation on the accretion of value within
certain insurance products or otherwise affect the taxation of insurance
products and insurance companies. To the extent that the Code is revised to
reduce the tax deferred status of insurance products, or to reduce the taxation
of competing products, all life insurance companies, including Allstate Life,
could be adversely affected.
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ALLSTATE LIFE GLOBAL FUNDING TRUSTS
Each series of notes will be issued by a newly created separate and
distinct trust formed by Global Funding, the administrator and the Delaware
trustee pursuant to the filing of a certificate of trust and the execution of
the applicable trust agreement. Global Funding will be the sole beneficial owner
of each trust that is formed.
After formation, each trust will not engage in any activity other than:
o issuing and selling a single series of notes;
o immediately acquiring a funding note and immediately surrendering such
funding note for cancellation pursuant to its terms in exchange for
one or more funding agreement(s);
o acquiring, holding and maintaining the applicable funding
agreement(s);
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the indenture trustee;
o making payments on the applicable series of notes; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
Unless otherwise provided in the applicable pricing supplement(s), the
principal executive offices of the trusts will be located at Allstate Life
Global Funding Trusts, c/o: AMACAR Pacific Corp., 6525 Morrison Boulevard, Suite
318, Charlotte, North Carolina 28211 and the telephone number will be (704)
365-0569. For more information about the trusts, see "Description of Allstate
Life Global Funding and the Trusts" in the accompanying prospectus.
ALLSTATE LIFE GLOBAL FUNDING
Global Funding is a special purpose statutory trust existing under the laws
of the State of Delaware. The primary purpose of Global Funding is to serve as
depositor for the programs.
Global Funding will not engage in any activity other than:
o beneficially owning the trusts;
o issuing one or more funding notes;
o acquiring one or more funding agreements from Allstate Life;
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the funding note indenture
trustee;
o assigning absolutely the funding agreement(s) to, and depositing such
funding agreement(s) into, the trusts; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
Unless otherwise provided in the applicable pricing supplement(s), the
principal executive offices of Global Funding are located at Allstate Life
Global Funding, c/o: AMACAR Pacific Corp., 6525 Morrison Boulevard, Suite 318,
Charlotte, North Carolina 28211 and the telephone number is (704) 365-0569. For
more information about Global Funding, see "Description of Allstate Life Global
Funding and the Trusts" in the accompanying prospectus.
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ALLSTATE LIFE INSURANCE COMPANY
Allstate Life was organized in 1957 as a stock life insurance company under
the laws of the State of Illinois. It conducts substantially all of its life
insurance operations directly or through wholly owned United States
subsidiaries. It is a wholly owned subsidiary of Allstate Insurance Company
("AIC"), a stock property-liability insurance company organized under the laws
of the State of Illinois. All of the outstanding stock of AIC is owned by The
Allstate Corporation, a publicly owned holding company incorporated under the
laws of the State of Delaware.
The Allstate Corporation, together with its subsidiaries, is the second
largest personal property and casualty insurer in the United States on the basis
of 2005 statutory premiums earned. Widely known through the "You're In Good
Hands With Allstate(R)" slogan, The Allstate Corporation, through its
subsidiaries, provides insurance products to approximately 17 million households
and has approximately 14,800 exclusive agencies and financial specialists in the
United States and Canada. For more information about Allstate Life, see
"Description of Allstate Life Insurance Company" in the accompanying prospectus.
Allstate Life's principal executive offices are located at 3100 Sanders
Road, Northbrook, Illinois 60062 and its telephone number is (847) 402-5000.
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DESCRIPTION OF THE NOTES
This section provides a summary description of the material provisions of
the notes. Each series of notes will be issued pursuant to a separate indenture
(each, an "indenture") to be entered into among the issuing trust and the other
parties specified therein, including The Bank of New York Trust Company, N.A.,
or another entity specified therein, as the indenture trustee (including, in
each case, any successor, the "indenture trustee"). The provisions of the notes
are not restated in their entirety and you should read the actual provisions set
forth in the standard indenture terms filed with the SEC because those
provisions, and not this description, will define your rights as an owner of an
interest in the notes of a series. The terms and conditions of the notes
described in this section will apply to each series of notes, except that the
specific terms of a series of notes will be added in the applicable pricing
supplement and each book-entry note or definitive note (each, a "note
certificate") representing the notes of such series. It is important for you to
consider the information contained in this prospectus supplement, the
accompanying prospectus, the applicable indenture, the applicable pricing
supplement and the note certificates in making your investment decision.
This section describes some technical concepts and occasionally contains
defined terms. You should refer to the standard indenture terms and the forms of
note certificates filed as exhibits to the registration statement to which this
prospectus supplement and the accompanying prospectus relate for the full
description of those concepts and complete definitions of those terms.
General
Indentures
Each trust will issue its series of notes subject to and entitled to the
benefits of a separate indenture. Each indenture will be subject to, qualified
under and governed by, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The aggregate principal amount of notes that may be
authenticated and delivered under each indenture will be unlimited. For a
description of the indentures, see "Description of the Indentures" beginning on
page 21 of the accompanying prospectus.
Collateral
Pursuant to each indenture, the issuing trust will pledge and collaterally
assign each funding agreement held by it to the indenture trustee for the
benefit of the holders of the notes issued by such trust and any other person
for whose benefit the indenture trustee is or will be holding the collateral (as
defined below) for such series of notes. Each series of notes will be secured by
a first priority perfected security interest in the "collateral" for such series
of notes in favor of the indenture trustee, for the benefit of the holders of
the notes of such series and any other person for whose benefit the indenture
trustee is or will be holding the collateral, which will consist of the right,
title and interest of the issuing trust in and to:
o the funding agreement(s) held by the issuing trust;
o all proceeds of the relevant funding agreement(s); and
o all books and records pertaining to the relevant funding agreement(s).
Ranking
The notes of a series will represent the unconditional, direct,
non-recourse and unsubordinated obligations of the issuing entity and will rank
equally among themselves. The notes of a series will represent the obligations
of the issuing entity only and will not represent the obligations of, or
interest in, any other person or entity, including Global Funding, Allstate Life
or any of their respective affiliates.
Pricing Supplement
The pricing supplement relating to the offering of a series of notes will
describe, among other things, the following terms:
o the principal amount and specified currency for the notes;
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o whether the notes are:
o fixed rate notes;
o floating rate notes;
o amortizing notes, meaning that a portion or all of the principal
amount is payable prior to the stated maturity date in accordance
with a schedule or by application of a formula; and/or
o discount notes that do not bear any interest currently or bear
interest at a rate that is below market rates at the time of
issuance;
o the price at which the notes will be issued, which will be expressed
as a percentage of the aggregate principal amount or face amount;
o the original issue date on which the notes will be issued;
o the stated maturity date;
o if the notes are fixed rate notes, the rate per annum at which the
notes will bear any interest and the interest payment date frequency;
o if the notes are floating rate notes, relevant terms such as:
o the interest rate basis or interest rate bases;
o the initial interest rate;
o the interest reset period or the interest reset dates;
o the interest payment dates;
o the index maturity;
o any maximum interest rate;
o the minimum interest rate;
o the spread and/or spread multiplier; and
o any other terms relating to the particular method of calculating
the interest rate for the notes and whether and how the spread
and/or spread multiplier may be changed prior to the stated
maturity date;
o if the notes are amortizing notes, the terms for repayment prior to
the stated maturity date;
o whether the notes may be redeemed by the issuing trust, or repaid at
the option of the holders, prior to the stated maturity date and the
terms of their redemption or repayment, provided that any such
redemption or repayment will be accompanied by the simultaneous
redemption or repayment of the relevant funding agreement(s);
o any special United States federal income tax considerations relating
to the purchase, ownership and disposition of the notes; and
o any other terms of the notes provided in the accompanying prospectus
to be set forth in a pricing supplement or that are otherwise
consistent with the provisions of the indenture under which the notes
will be issued.
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The pricing supplement also may add, update, supplement or clarify
information in this prospectus supplement and the accompanying prospectus. The
form of pricing supplement is included in this prospectus supplement as Annex A.
Pricing Options
Notes that bear interest will either bear interest at fixed or floating
rates, as specified in the applicable pricing supplement. The trusts may also
issue discount notes and amortizing notes, as specified in the applicable
pricing supplement.
Maturities
Each series of notes will mature on a day between nine months and 30 years
from its date of issue (the "stated maturity date"), as specified in the
applicable pricing supplement, unless its principal (or, any installment of its
principal) becomes due and payable prior to the stated maturity date, whether,
as applicable, by the declaration of acceleration of maturity, notice of
redemption at the option of the issuing trust, notice of the registered holder's
option to elect repayment or otherwise (the stated maturity date or any date
prior to the stated maturity date on which the particular series of notes
becomes due and payable, as the case may be, is referred to as the "maturity
date" with respect to the principal of such series of notes repayable on that
date). Each series of notes will mature on or prior to the 30th anniversary of
the date of its original issuance. Each series of notes will have the same
maturity as the related funding agreement(s).
Currency
Unless otherwise specified in the applicable pricing supplement, the notes
of a series will be denominated in, and payments of principal, premium, if any,
and/or interest or other amounts, if any, in respect thereof will be made in,
United States dollars. Each series of notes also may be denominated in, and
payments of principal, premium, if any, and/or interest or other amounts, if
any, in respect thereof may be made in, one or more foreign currencies. See
"Special Provisions Relating to Foreign Currency Notes--Payment of Principal,
Premium, if any, and Interest, if any." The currency in which a particular
series of notes is denominated (or, if that currency is no longer legal tender
for the payment of public and private debts in the country issuing that currency
or, in the case of Euro, in the member states of the European Union that have
adopted the single currency in accordance with the Treaty Establishing the
European Community, as amended by the Treaty on European Union, the currency
which is then legal tender in the related country or in the adopting member
states of the European Union, as the case may be) is referred to as the
"specified currency" with respect to such series of notes.
You will be required to pay for your notes in the specified currency. At
the present time, there are limited facilities in the United States for the
conversion of United States dollars into foreign currencies and vice versa, and
commercial banks do not generally offer non-United States dollar checking or
savings account facilities in the United States. The Agent from or through which
a foreign currency note is purchased may be prepared to arrange for the
conversion of United States dollars into the specified currency in order to
enable you to pay for your foreign currency note, provided that you make a
request to that Agent on or prior to the fifth business day (as defined below)
preceding the date of delivery of the particular foreign currency note, or by
any other day determined by that Agent. Each conversion will be made by an Agent
on the terms and subject to the conditions, limitations and charges as that
Agent may from time to time establish in accordance with its regular foreign
exchange practices. You will be required to bear all costs of exchange in
respect of your foreign currency note. See "Special Provisions Relating to
Foreign Currency Notes."
The issuing trust may (if so specified in the applicable pricing
supplement) without the consent of the holders of any note or coupon,
redenominate all, but not less than all, of the notes of a series on or after
the date on which the member state of the European Union in whose national
currency such notes are denominated has become a participant member in the third
stage of the European economic and monetary union as more fully set out in the
applicable pricing supplement.
Form of Notes; Denominations
The issuing trust will issue each note of a series as a book-entry note
represented by one or more fully registered global securities or as a fully
registered definitive note. Unless otherwise specified in the applicable pricing
supplement, the minimum denominations of each note will be $1,000 and integral
multiples of $1,000 in excess thereof.
Listing of Notes
Unless otherwise specified in the applicable pricing supplement, a series
of notes will not be listed on any securities exchange.
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Payments
The issuing trust will make payments of principal of, and premium, if any,
and interest and other amounts due and owing, if any, on book-entry notes
through the indenture trustee to the account of the depositary or its nominee.
See "--Form of Notes" and "--Clearing Systems." In the case of definitive notes,
payments of principal of, and premium, if any, and interest and other amounts
due and owing, if any, will be made on the maturity date in immediately
available funds upon presentation and surrender thereof (and, in the case of any
repayment on an optional repayment date, upon submission of a duly completed
election form if and as required by the provisions described below) at the
office or agency maintained by the issuing trust for this purpose in the Borough
of Manhattan, The City of New York, currently the paying agency office of the
indenture trustee located at 101 Barclay Street, New York, New York 10286. The
issuing trust will make payments of interest and other amounts due and owing, if
any, on the maturity date of a definitive note to the person to whom payment of
the principal thereof and premium, if any, thereon shall be made. The issuing
trust will make payments of interest and other amounts due and owing, if any, on
a definitive note on any interest payment date (as defined below) other than the
maturity date by check mailed to the address of the registered holder entitled
thereto appearing in the applicable note register. Notwithstanding the
foregoing, the issuing trust will make payments of interest and other amounts
due and owing, if any, on any interest payment date other than the maturity date
to each registered holder of $10,000,000 (or, if the specified currency is other
than United States dollars, the equivalent thereof in the particular specified
currency) or more in aggregate principal amount of definitive notes (whether
having identical or different terms and provisions) by wire transfer of
immediately available funds if the applicable registered holder has delivered
appropriate wire transfer instructions in writing to the indenture trustee not
less than 15 days prior to the particular interest payment date. Any wire
transfer instructions received by the indenture trustee shall remain in effect
until revoked by the applicable registered holder. For special payment terms
applicable to foreign currency notes, see "Special Provisions Relating to
Foreign Currency Notes--Payment of Principal, Premium, if any, and Interest, if
any."
Business Day
"Business day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York;
provided, however, that, with respect to foreign currency notes, the day must
also not be a day on which commercial banks are authorized or required by law,
regulation or executive order to close in the principal financial center (as
defined below) of the country issuing the specified currency (or, if the
specified currency is Euro, the day must also be a TARGET settlement day); and
provided further, that, with respect to notes as to which LIBOR is an applicable
interest rate basis, the day must also be a London banking day (as defined
below). "TARGET settlement day" means a day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.
Principal Financial Center
"Principal financial center" means, as applicable:
o the capital city of the country issuing the specified currency; or
o the capital city of the country to which the LIBOR currency relates;
provided, however, that with respect to United States dollars, Australian
dollars, Canadian dollars, Euro, South African rands and Swiss francs, the
"principal financial center" shall be The City of New York, Sydney, Toronto,
London (solely in the case of the LIBOR currency), Johannesburg and Zurich,
respectively.
Registration and Transfer of Notes
Book-entry notes may be transferred or exchanged only through the clearing
systems (described below). Registration of transfer or exchange of definitive
notes of a series will be made at the office or agency maintained by the issuing
trust for this purpose in the Borough of Manhattan, The City of New York, which
is currently the corporate trust office of the indenture trustee. No service
charge will be imposed for any such registration of transfer or exchange of
notes, but the issuing trust may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith
(other than certain exchanges not involving any transfer).
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Withholding Tax and Payment of Additional Amounts
All amounts due in respect of the notes will be made without withholding or
deduction for or on account of any present or future taxes, duties, levies,
assessments or other governmental charges of whatever nature imposed or levied
by or on behalf of any governmental authority in the United States having the
power to tax payments on the notes unless the withholding or deduction is
required by law.
Unless otherwise specified in the applicable pricing supplement, a trust
will not pay any additional amounts ("additional amounts") to holders of any
series of notes in the event that any withholding or deduction is so required by
law, regulation or official interpretation thereof, and the imposition of a
requirement to make any such withholding or deduction will not give rise to any
independent right or obligation to redeem the notes of such series.
If a trust so specifies in the applicable pricing supplement, such trust
will pay, or cause to be paid, additional amounts to non-U.S. Holders (as
defined in "United States Federal Income Tax Considerations") to compensate for
any withholding or deduction for or on account of any present or future taxes,
duties, levies, assessments or governmental charges of whatever nature imposed
or levied on payments on the notes of the relevant series by or on behalf of any
governmental authority in the United States having the power to tax, so that the
net amount received by the holders of the notes of such series, after giving
effect to such withholding or deduction, whether or not currently payable, will
equal the amount that would have been received under the notes of such series
were no such deduction or withholding required; provided that no such additional
amounts shall be required for or on account of:
o any tax, duty, levy, assessment or other governmental charge imposed
which would not have been imposed but for a holder or beneficial owner
of one or more of the notes of such series
o having any present or former connection with the United States,
including, without limitation, being or having been a citizen or
resident thereof, or having been present, having been
incorporated in, having engaged in a trade or business or having
(or having had) a permanent establishment or principal office
therein;
o being a controlled foreign corporation (within the meaning of
Section 957(a) of the Code) related (within the meaning of Code
Section 864(d)(4)) to Allstate Life;
o being a bank for United States federal income tax purposes whose
receipt of interest on the notes is described in Section
881(c)(3)(A) of the Code;
o being an actual or constructive owner of 10% or more of the total
combined voting power of all classes of stock of Allstate Life
entitled to vote within the meaning of Section 871(h)(3) of the
Code and Treasury Regulations promulgated thereunder; or
o being subject to backup withholding as of the date of the
purchase by the holder of the notes;
o any tax, duty, levy, assessment or other governmental charge which
would not have been imposed but for the presentation of any note of
the applicable series (where presentation is required) for payment on
a date more than 30 days after the date on which such payment becomes
due and payable or the date on which payment is duly provided for,
whichever occurs later;
o any tax, duty, levy, assessment or other governmental charge which is
imposed or withheld solely by reason of the failure of the beneficial
owner or a holder of notes of a series to comply with certification,
identification or information reporting requirements concerning the
nationality, residence, identity or connection with the United States
of the beneficial owner or a holder of notes of such series, if
compliance is required by statute, by regulation of the United States
Treasury Department, judicial or administrative interpretation, other
law or by an applicable income tax treaty to which the United States
is a party as a condition to exemption from such tax, duty, levy,
assessment or other governmental charge;
o any inheritance, gift, estate, personal property, sales, transfer or
similar tax, duty, levy, assessment, or similar governmental charge;
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o any tax, duty, levy, assessment, or other governmental charge that is
payable otherwise than by withholding from payments in respect of the
notes of such series;
o any tax, duty, levy, assessment or governmental charge imposed by
reason of payments on the notes of such series being treated as
contingent interest described in Section 871(h)(4) of the Code
provided such treatment was described in the applicable pricing
supplement;
o any tax, duty, levy, assessment or governmental charge that would not
have been imposed but for an election by the holder of the notes of
such series, the effect of which is to make one or more payments in
respect of the notes of such series subject to United States federal
income tax or withholding tax provisions; or
o any combination of the items described in the bullets above.
The European Union has adopted a directive regarding the taxation of
savings income. Effective as of July 1, 2005, member states are required to
provide to the tax authorities of other member states details of payments of
interest and other similar income paid by a person to an individual in another
member state, except that Austria, Belgium and Luxembourg will instead impose a
withholding system for a transitional period unless during such period they
elect otherwise. For the avoidance of doubt, should any deduction or withholding
on account of tax be required to be made, or be made, pursuant to such
directive, no additional amounts shall be payable or paid by or on behalf of a
trust.
Security; Non-Recourse Obligations
The notes of a series will represent the obligations of the issuing entity
only and will not represent the obligations of, or interest in, any other person
or entity, Global Funding, Allstate Life or any of their respective affiliates.
The notes of a series will not be guaranteed by any person or entity. The
obligations under each series of notes will be secured by all of the rights and
title of the issuing trust in one or more funding agreements issued by Allstate
Life and other rights and assets included in the applicable collateral held in
the issuing trust.
The issuing trust will, from time to time and upon advice of counsel, at
the trust's expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement or other paper and take any other
action, (including, without limitation, any filings of financing or continuation
statements) that from time to time may be necessary or desirable, or that the
indenture trustee may reasonably request, in order to create, preserve, perfect,
confirm or validate a security interest or to enable the holder of its series of
notes to obtain the full benefits of the applicable indenture, or to enable the
indenture trustee to exercise and enforce any of its rights, powers and remedies
under the indenture with respect to the applicable collateral. To the extent
permitted by applicable law, the issuing trust will authorize the indenture
trustee to execute and file financing statements or continuation statements
without the trust's signature appearing thereon and will agree that a carbon,
photographic, photostatic or other reproduction of the applicable indenture or
of a financing statement is sufficient as a financing statement. The issuing
trust shall pay the costs of, or incidental to, any recording or filing of any
financing or continuation statements concerning any of the applicable
collateral.
Since Allstate Life will be the sole obligor under the funding agreements,
the ability of a trust to meet its obligations, and your ability to receive
payments from such trust, with respect to a particular series of notes, will be
principally dependent upon Allstate Life's ability to perform its obligations
under each applicable funding agreement held by the issuing trust. Despite this,
you will have no direct contractual rights against Allstate Life under any such
funding agreement. Pursuant to the terms of each funding agreement, recourse
rights to Allstate Life will belong to the issuing trust, its successors and
permitted assignees. In connection with the offering and sale of a series of
notes, the issuing trust will pledge, collaterally assign and grant a security
interest in the collateral for such series of notes to the indenture trustee for
the benefit of the holders of the applicable series of notes and any other
person for whose benefit the indenture trustee is or will be holding the
collateral. Accordingly, recourse to Allstate Life under each such funding
agreement will be enforceable only by the indenture trustee as a secured party
for the benefit of holders of such series of notes and any other person for
whose benefit the indenture trustee is or will be holding the collateral.
Nonetheless, since Allstate Life is a registrant, purchasers of notes may
be able to proceed directly against Allstate Life to enforce their rights under
the Federal securities laws and their rights under the Federal securities laws
will be no different than if they purchased the underlying funding agreements
directly from Allstate Life.
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Redemption, Repayment and Repurchase of Notes
Unless otherwise specified in the applicable pricing supplement and
provided for in the applicable funding agreement(s), and except as provided with
respect to an optional tax event redemption, the notes of a series will not be
redeemable, except at the applicable maturity date, when all notes of such
series will be redeemed.
Optional Redemption by the Issuer; No Sinking Fund
If an initial redemption date is specified in the applicable pricing
supplement and provided for in the applicable funding agreement(s), the issuing
trust may redeem the particular series of notes prior to its stated maturity
date at its option on any date on or after that initial redemption date in whole
or from time to time in part in increments of $1,000 or any other integral
multiple of an authorized denomination specified in the applicable pricing
supplement (provided that any remaining principal amount thereof shall be at
least $1,000 or other minimum authorized denomination applicable thereto), at
the applicable redemption price (as defined below), together with unpaid
interest accrued thereon to the date of redemption. "Redemption price," with
respect to a series of notes, means an amount equal to the initial redemption
percentage specified in the applicable pricing supplement (as adjusted by the
annual redemption percentage reduction, if applicable) multiplied by the unpaid
principal amount thereof to be redeemed. The initial redemption percentage, if
any, applicable to a series of notes shall decline at each anniversary of the
initial redemption date by an amount equal to the applicable annual redemption
percentage reduction, if any, until the redemption price is equal to 100% of the
unpaid amount thereof to be redeemed. For a discussion of the redemption of
discount notes, see "--Discount Notes."
No series of notes will be subject to, or entitled to the benefit of, any
sinking fund unless otherwise indicated in the applicable pricing supplement.
The applicable pricing supplement may provide that the notes of a series
may be redeemed by the issuing trust and the terms of such redemption. If so
specified, the issuing trust will give a notice of redemption to each holder of
the notes to be redeemed not less than 30 days nor more than 60 days prior to
the date fixed for redemption.
Each trust may issue a series of notes which may be redeemed by the issuing
trust when 25% or more of the original principal balance of such notes is
outstanding, which are referred to herein as "callable" notes. If a trust issues
a series of callable notes, such trust will include the word "callable" in the
title of such series of notes in the applicable pricing supplement. Unless
otherwise specified in the applicable pricing supplement, such series of notes
will otherwise be subject to the redemption provisions described above.
Repayment at Option of Holder
A series of notes may permit, upon the terms and subject to the limitations
set forth in the applicable pricing supplement, redemption at the option of the
holder or holders of the notes of such series. If one or more series of notes
provides for such optional redemption, the persons designated in the applicable
pricing supplement may require the issuing trust to repay the notes of such
series prior to their stated maturity date in whole or from time to time in part
in increments of $1,000 or any other integral multiple of an authorized
denomination specified in the applicable pricing supplement (provided that any
remaining principal amount thereof shall be at least $1,000 or other minimum
authorized denomination applicable thereto), at a repayment price equal to 100%
of the unpaid principal amount thereof to be repaid, together with unpaid
interest accrued thereon to the date of repayment and any other amounts then due
and owing. Exercise of the repayment option will be irrevocable. For a
discussion of the repayment of discount notes, see "--Discount Notes."
None of the trusts will issue notes that may be repaid at the option of the
holders prior to the stated maturity date if such issuance would cause the
relevant trust to fail to satisfy the applicable requirements for exemption
under Rule 3a-7 under the Investment Company Act of 1940, as amended, and all
applicable rules, regulations and interpretations thereunder.
Only the applicable clearing system may exercise a repayment option in
respect of notes of a series issued in book-entry form. Accordingly, beneficial
owners of notes that desire to exercise their repayment option, if any, with
respect to all or any portion of such notes, must instruct the participant
through which they own their interest to direct the applicable clearing system
to exercise the repayment option on their behalf by delivering the duly
completed election form to the indenture trustee. In order to ensure that the
election form is received by the indenture trustee on a particular day, the
applicable beneficial owner must so instruct the participant through which it
owns its interest before such participant's deadline for accepting instructions
for that day. Participants may have different deadlines for accepting
instructions from their customers. Accordingly, a beneficial owner should
consult the participant through which it owns its interest in the notes for the
participant's deadline for receiving payment instructions. In
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addition, at the time such instructions are given, each such beneficial owner
will cause such participant to transfer such beneficial owner's interest in the
notes issued in book-entry form, on the applicable clearing system's records, to
the indenture trustee.
Unless otherwise specified in the applicable pricing supplement, the notes
of a series will not provide any holder with the option to have the issuing
trust repay the note on a date or dates specified prior to its maturity date.
Repurchase of Notes
Each trust may purchase some or all notes of a series issued by such trust
in the open market or otherwise at any time, and from time to time, with the
prior written consent of Allstate Life as to both the making of such purchase
and the purchase price to be paid for such notes. If Allstate Life, in its sole
discretion, consents to such purchase of notes by the issuing trust, then such
trust and other parties to the indenture will be obligated to take such actions
as may be necessary or desirable to effect the prepayment of such portion, or
the entirety, of the current Principal Amount (as defined in the applicable
funding agreement) under each applicable funding agreement as may be necessary
to provide for the payment of the purchase price for such notes. Upon such
payment, the Principal Amount under each funding agreement shall be reduced (1)
with respect to any purchase of notes that bear interest at fixed or floating
rates, by an amount equal to the aggregate principal amount of the notes as
purchased (or the portion thereof applicable to such funding agreement) and (2)
with respect to any purchase of notes other than notes that bear interest at
fixed or floating rates, by an amount to be agreed between the issuing trust and
Allstate Life to reflect such prepayment under the funding agreement(s).
Optional Tax Event Redemption
If under the applicable pricing supplement the issuing trust is required at
any time to pay additional amounts or if such trust is obligated to withhold or
deduct any United States taxes with respect to any payment under the notes of
the relevant series or if there is a material probability that the issuing trust
will become obligated to withhold or deduct any such United States taxes or
otherwise pay additional amounts (in the opinion of independent legal counsel
selected by Allstate Life), in each case pursuant to any change in or amendment
to any United States tax laws (or any regulations or rulings thereunder) or any
change in position of the Internal Revenue Service regarding the application or
interpretation thereof (including, but not limited to, Allstate Life's or the
issuing trust's receipt of a written adjustment from the Internal Revenue
Service in connection with an audit) (a "tax event"), then Allstate Life,
pursuant to the terms of the relevant funding agreement(s), may terminate the
relevant funding agreement(s). If Allstate Life terminates the relevant funding
agreement(s), the issuing trust will redeem the particular series of notes for
the outstanding principal of and any accrued but unpaid interest and any other
amounts then due and owing on its series of notes, or such other amount which is
specified in the pricing supplement for such series of notes by giving not more
than 75 days nor less than 30 days prior written notice to the holders of such
series of notes, provided that no such notice of termination may be given
earlier than 90 days prior to the earliest day when the issuing trust would
become obligated to pay such additional amounts were a payment in respect of the
notes of such series then due.
Interest
Each interest-bearing series of notes will bear interest from its date of
issue at the rate per annum, in the case of notes that bear interest at fixed
rates, or pursuant to the interest rate formula, in the case of notes that bear
interest at floating rates, in each case as specified in the applicable pricing
supplement, until the principal thereof is paid. The issuing trust will make
interest payments in respect of the relevant series of notes in an amount equal
to the interest accrued from and including the immediately preceding interest
payment date in respect of which interest has been paid or from and including
the date of issue, if no interest has been paid, to but excluding the applicable
interest payment date or the maturity date, as the case may be (each, an
"interest period").
Interest on each series of notes will be payable in arrears on each
interest payment date and on the maturity date. The first payment of interest on
any series of notes originally issued between a regular interest record date (as
defined below) and the related interest payment date will be made on the
interest payment date immediately following the next succeeding regular interest
record date to the registered holder on the next succeeding regular interest
record date. The "regular interest record date" shall be the fifteenth calendar
day, whether or not a business day, immediately preceding the related interest
payment date.
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Fixed Rate Notes
Interest on each series of notes that bears interest at a fixed rate will
be payable on the date(s) specified in the applicable pricing supplement (each,
an "interest payment date" with respect to a series of notes that bears interest
at fixed rates) and on the maturity date. Interest on each series of notes that
bears interest at fixed rates will be computed on the basis of a 360-day year of
twelve 30-day months.
Unless otherwise specified in the applicable pricing supplement, the
interest payment dates for fixed rate notes of a series will be as follows:
Interest Payment Frequency Interest Payment Dates
-------------------------------------- ----------------------------------------------------
Monthly Fifteenth day of each calendar month, beginning in
the first calendar month following the date such
series of notes was issued.
Quarterly Fifteenth day of every third month, beginning in the
third calendar month following the date such
series of notes was issued.
Semiannual Fifteenth day of every sixth month, beginning in the
sixth calendar month following the date such
series of notes was issued.
Annual Fifteenth day of every twelfth month, beginning in
the twelfth calendar month following the date such
series of notes was issued.
Unless otherwise provided in the applicable pricing supplement, any
interest payment date or the maturity date of a series of notes that bears
interest at a fixed rate falls on a day that is not a business day, the issuing
trust will make the required payment of principal, premium, if any, and/or
interest or other amounts on the next succeeding business day, and no additional
interest will accrue in respect of the payment made on that next succeeding
business day.
Interest rates that the trusts offer on their respective fixed rate notes
may differ depending upon, among other factors, the aggregate principal amount
of notes purchased in any single transaction. Notes with different variable
terms, other than interest rates, may also be offered concurrently by different
trusts to different investors. Other trusts may change interest rates or
formulas and other terms of notes from time to time, but no change of terms will
affect any note any other trust has previously issued or as to which any other
trust has accepted an offer to purchase.
Floating Rate Notes
Interest on each series of notes that bears interest at floating rates will
be determined by reference to the applicable interest rate basis or interest
rate bases, which may, as described below, include:
o the CD Rate,
o the CMT Rate,
o the Commercial Paper Rate,
o the Constant Maturity Swap Rate,
o the Eleventh District Cost of Funds Rate,
o EURIBOR,
o the Federal Funds Rate,
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o LIBOR,
o the Prime Rate, or
o the Treasury Rate.
The applicable pricing supplement will specify certain terms of the
particular series of notes that bears interest at floating rates, including:
o whether the note that bears interest at floating rates is:
o a "Regular Floating Rate Note,"
o a "Floating Rate/Fixed Rate Note" or
o an "Inverse Floating Rate Note,"
o the fixed rate commencement date, if applicable,
o fixed interest rate, if applicable,
o interest rate basis or bases,
o initial interest rate, if any,
o interest reset dates,
o interest payment dates,
o index maturity,
o maximum interest rate and/or minimum interest rate, if any,
o spread and/or spread multiplier, or
o if one or more of the applicable interest rate bases is LIBOR, the
LIBOR currency and LIBOR page.
The rate derived from the applicable interest rate basis will be determined
in accordance with the related provisions below. The interest rate in effect on
each day will be based on:
o if that day is an interest reset date, the rate determined as of the
interest determination date (as defined below) immediately preceding
that interest reset date, or
o if that day is not an interest reset date, the rate determined as of
the interest determination date immediately preceding the most recent
interest reset date.
The "spread" is the number of basis points (one one-hundredth of a
percentage point) specified in the applicable pricing supplement to be added to
or subtracted from the related interest rate basis or bases applicable to a
series of notes that bears interest at floating rates. The "spread multiplier"
is the percentage specified in the applicable pricing supplement of the related
interest rate basis or bases applicable to a series of notes that bears interest
at floating rates by which the interest rate basis or bases will be multiplied
to determine the applicable interest rate. The "index maturity" is the period to
maturity of the instrument or obligation with respect to which the related
interest rate basis or bases will be calculated.
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Regular Floating Rate Notes
Unless a series of notes that bears interest at floating rates is
designated as a series of Floating Rate/Fixed Rate notes or a series of Inverse
Floating Rate notes, or as having an addendum attached or having
other/additional provisions apply, in each case relating to a different interest
rate formula, such series of notes that bears interest at floating rates will be
a series of Regular Floating Rate notes and will bear interest at the rate
determined by reference to the applicable interest rate basis or bases:
o multiplied by the applicable spread multiplier, if any; and/or
o plus or minus the applicable spread, if any.
Commencing on the first interest reset date, as specified in the relevant
pricing supplement, the rate at which interest on a series of Regular Floating
Rate notes is payable will be reset as of each interest reset date; provided,
however, that the interest rate in effect for the period, if any, from the date
of issue to the first interest reset date will be the initial interest rate.
Floating Rate/Fixed Rate Notes
If a series of notes that bears interest at floating rates is designated as
a series of Floating Rate/Fixed Rate notes, such series of notes that bears
interest at floating rates will bear interest at the rate determined by
reference to the applicable interest rate basis or bases:
o multiplied by the applicable spread multiplier, if any; and/or
o plus or minus the applicable spread, if any.
Commencing on the first interest reset date, the rate at which interest on
a series of Floating Rate/Fixed Rate notes is payable will be reset as of each
interest reset date; provided, however, that:
o the interest rate in effect for the period, if any, from the date of
issue to the first interest reset date will be the initial interest
rate, as specified in the relevant pricing supplement; and
o the interest rate in effect commencing on the fixed rate commencement
date will be the fixed interest rate, if specified in the applicable
pricing supplement, or, if not so specified, the interest rate in
effect on the day immediately preceding the fixed rate commencement
date.
Inverse Floating Rate Notes
If a series of notes that bears interest at floating rates is designated as
a series of Inverse Floating Rate notes, such series of notes that bears
interest at floating rates will bear interest at the fixed interest rate minus
the rate determined by reference to the applicable interest rate basis or bases:
o multiplied by the applicable spread multiplier, if any; and/or
o plus or minus the applicable spread, if any.
provided, however, that interest on a series of Inverse Floating Rate notes will
not be less than zero. Commencing on the first interest reset date, the rate at
which interest on a series of Inverse Floating Rate notes is payable will be
reset as of each interest reset date; provided, further, that the interest rate
in effect for the period, if any, from the date of issue to the first interest
reset date will be the initial interest rate.
Interest Reset Dates
The applicable pricing supplement will specify the dates on which the rate
of interest on a series of notes that bears interest at floating rates will be
reset (each, an "interest reset date"), and the period between interest reset
dates will be the "interest reset period." Unless otherwise specified in the
applicable pricing supplement, the interest reset dates will be, in the case of
a series of notes that bears interest at floating rates which reset:
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o daily--each business day;
o weekly--the Wednesday of each week, with the exception of weekly reset
series of notes that bears interest at floating rates as to which the
Treasury Rate is an applicable interest rate basis, which will reset
the Tuesday of each week;
o monthly--the third Wednesday of each month, with the exception of
monthly reset series of notes that bears interest at floating rates as
to which the Eleventh District Cost of Funds Rate is an applicable
interest rate basis, which will reset on the first calendar day of the
month;
o quarterly--the third Wednesday of every third calendar month,
beginning in the third calendar month following the month in which the
note was issued;
o semiannually--the third Wednesday of the two months specified in the
applicable pricing supplement; and
o annually--the third Wednesday of the month specified in the applicable
pricing supplement; provided, however, that, with respect to any
series of Floating Rate/Fixed Rate notes, the rate of interest thereon
will not reset after the particular fixed rate commencement date.
Unless otherwise provided in the applicable pricing supplement, if any
interest reset date for any series of notes that bears interest at floating
rates would otherwise be a day that is not a business day, the particular
interest reset date will be postponed to the next succeeding business day,
except that in the case of a series of notes that bears interest at floating
rates as to which LIBOR is an applicable interest rate basis and that business
day falls in the next succeeding calendar month, the particular interest reset
date will be the immediately preceding business day.
Interest Determination Dates
The interest rate applicable to a series of notes that bears interest at
floating rates for an interest reset period commencing on the related interest
reset date will be determined by reference to the applicable interest rate basis
as of the particular "interest determination date," which will be:
o with respect to the Federal Funds Rate and the Prime Rate--the
business day immediately preceding the related interest reset date;
o with respect to the CD Rate, the Commercial Paper Rate, and the CMT
Rate--the second business day preceding the related interest reset
date;
o with respect to the Constant Maturity Swap Rate--the second U.S.
Government Securities business day (as defined below) preceding the
related interest reset date; provided, however, that if, after
attempting to determine the Constant Maturity Swap Rate (as described
below), such rate is not determinable for a particular interest
determination date (the "original interest determination date"), then
such interest determination date shall be the first U.S. Government
Securities business day preceding the original interest determination
date for which the Constant Maturity Swap Rate can be determined as
described below;
o with respect to the Eleventh District Cost of Funds Rate--the last
working day of the month immediately preceding the related interest
reset date on which the Federal Home Loan Bank of San Francisco
publishes the Eleventh District Index (as defined below);
o with respect to LIBOR--the second London banking day (as defined
below) preceding the related interest reset date, unless the
applicable LIBOR currency (as defined below) is pounds sterling, in
which case the interest determination date will be the related
interest reset date, or the applicable LIBOR currency is Euro, in
which case the interest determination date will be the second TARGET
settlement date preceding the applicable interest reset date;
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o with respect to EURIBOR--the second TARGET settlement date preceding
the applicable interest reset date; and
o with respect to the Treasury Rate--the day in the week in which the
related interest reset date falls on which day Treasury Bills (as
defined below) are normally auctioned (i.e., Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the
following Tuesday, except that the auction may be held on the
preceding Friday); provided, however, that if an auction is held on
the Friday of the week preceding the related interest reset date, the
interest determination date will be the preceding Friday.
Unless otherwise provided in the applicable pricing supplement, the
interest determination date pertaining to a series of notes that bears interest
at floating rates the interest rate of which is determined with reference to two
or more interest rate bases will be the latest business day which is at least
two business days before the related interest reset date for the applicable note
that bears interest at floating rates on which each interest reset basis is
determinable.
Calculation Dates
The indenture trustee will be the "calculation agent" for a series of notes
unless otherwise specified in the applicable pricing supplement. The interest
rate applicable to each interest reset period will be determined by the
calculation agent on or prior to the calculation date (as defined below), except
with respect to LIBOR and the Eleventh District Cost of Funds Rate, which will
be determined on the particular interest determination date. Upon request of the
registered holder of a series of notes that bears interest at floating rates,
the calculation agent will disclose the interest rate then in effect and, if
determined, the interest rate that will become effective as a result of a
determination made for the next succeeding interest reset date with respect to
the particular series of notes that bears interest at floating rates. The
"calculation date," if applicable, pertaining to any interest determination date
will be the earlier of:
o the tenth calendar day after the particular interest determination
date or, if such day is not a business day, the next succeeding
business day; or
o the business day immediately preceding the applicable interest payment
date or the maturity date, as the case may be.
Maximum and Minimum Interest Rates
A series of notes that bears interest at floating rates may also have
either or both of the following if specified in the applicable pricing
supplement:
o a maximum numerical limitation, or ceiling, that may accrue during any
interest reset period (a "maximum interest rate"); and
o a minimum numerical limitation, or floor, that may accrue during any
interest reset period (a "minimum interest rate").
In addition to any maximum interest rate that may apply to a series of
notes that bears interest at floating rates, the interest rate on a series of
notes that bears interest at floating rates will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application.
Interest Payments
Unless otherwise specified in the applicable pricing supplement or in this
prospectus supplement, interest on each series of notes that bears interest at
floating rates will be payable on the date(s) specified in the accompanying
prospectus under the caption "Description of the Notes--Payment of Interest"
(each, an "interest payment date" with respect to such series of notes that
bears interest at floating rates). Unless the applicable pricing supplement
indicates otherwise, the interest payment dates will be, in the case of a series
of notes that bears interest at floating rates which reset:
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o daily, weekly or monthly--the third Wednesday of each month or on the
third Wednesday of every third calendar month, beginning in the third
calendar month following the date the applicable series of notes was
issued;
o quarterly--the third Wednesday of every third calendar month,
beginning in the third calendar month following the date the
applicable series of notes was issued;
o semiannually--the third Wednesday of the two months of each year
specified in the applicable pricing supplement; and
o annually--the third Wednesday of the month of each year specified in
the applicable pricing supplement.
In addition, the maturity date will also be an interest payment date.
Unless otherwise provided in the applicable pricing supplement, if any
interest payment date other than the maturity date for any series of notes that
bears interest at floating rates would otherwise be a day that is not a business
day, such interest payment date will be postponed to the next succeeding
business day, except that in the case of a series of notes that bears interest
at floating rates as to which LIBOR is an applicable interest rate basis and
that business day falls in the next succeeding calendar month, the particular
interest payment date will be the immediately preceding business day. If the
maturity date of a series of notes that bears interest at floating rates falls
on a day that is not a business day, the issuing trust will make the required
payment of principal, premium, if any, and interest or other amounts on the next
succeeding business day, and no additional interest will accrue in respect of
the payment made on that next succeeding business day.
All percentages resulting from any calculation on notes that bear interest
at floating rates will be rounded to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or
..0987655). All amounts used in or resulting from any calculation on notes that
bear interest at floating rates will be rounded, in the case of United States
dollars, to the nearest cent or, in the case of a foreign currency, to the
nearest unit (with one-half cent or unit being rounded upwards).
With respect to each series of notes that bears interest at floating rates,
accrued interest is calculated by multiplying the principal amount of such
series of notes that bears interest at floating rates by an accrued interest
factor. The accrued interest factor is computed by adding the interest factor
calculated for each day in the particular interest period. The interest factor
for each day will be computed by dividing the interest rate applicable to such
day by 360, in the case of a series of notes that bears interest at floating
rates as to which the CD Rate, the Commercial Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is
an applicable interest rate basis, or by the actual number of days in the year,
in the case of a series of notes that bears interest at floating rates as to
which the CMT Rate or the Treasury Rate is an applicable interest rate basis. In
the case of a series of notes that bears interest at floating rates as to which
the Constant Maturity Swap Rate is the interest rate basis, the interest factor
will be computed by dividing the number of days in the interest period by 360
(the number of days to be calculated on the basis of a year of 360 days with 12
30-day months (unless (i) the last day of the interest period is the 31st day of
a month but the first day of the interest period is a day other than the 30th or
31st day of a month, in which case the month that includes that last day shall
not be considered to be shortened to a 30-day month, or (ii) the last day of the
interest period is the last day of the month of February, in which case the
month of February shall not be considered to be lengthened to a 30-day month)).
The interest factor for a series of notes that bears interest at floating rates
as to which the interest rate is calculated with reference to two or more
interest rate bases will be calculated in each period in the same manner as if
only the applicable interest rate basis specified in the applicable pricing
supplement applied.
The calculation agent shall determine the rate derived from each interest
rate basis in accordance with the following provisions.
CD Rate
"CD Rate" means:
(1) the rate on the particular interest determination date for negotiable
United States dollar certificates of deposit having the index maturity
specified in the applicable pricing supplement as published in
H.15(519) (as defined below) under the caption "CDs (secondary
market);" or
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(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date for negotiable United
States dollar certificates of deposit of the particular index maturity
as published in H.15 Daily Update (as defined below), or other
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "CDs (secondary market);" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on that interest
determination date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York
(which may include the Agents or their affiliates) selected by the
calculation agent (after consultation with Allstate Life) for
negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States
certificates of deposit with a remaining maturity closest to the
particular index maturity in an amount that is representative for a
single transaction in that market at that time; or
(4) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (3), the CD Rate in effect on the particular
interest determination date; provided that if no CD Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/H15/update, or any successor site or
publication.
CMT Rate
"CMT Rate" means:
(1) if Reuters Page FRBCMT is specified in the applicable pricing
supplement:
(a) the percentage equal to the yield for United States Treasury
securities at "constant maturity" having the index maturity
specified in the applicable pricing supplement as published in
H.15(519) under the caption "Treasury constant maturities," as
the yield is displayed on the Reuters Service ("Reuters") (or any
successor service) on page FRBCMT (or any other page as may
replace the specified page on that service) ("Reuters Page
FRBCMT"), for the particular interest determination date; or
(b) if the rate referred to in clause (a) does not so appear on
Reuters Page FRBCMT or is not so published by 3:00 P.M., New York
City time, on that interest determination date, the percentage
equal to the yield for United States Treasury securities at
"constant maturity" having the particular index maturity and for
the particular interest determination date as published in
H.15(519) under the caption "Treasury constant maturities;" or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519) or is not so published by 3:00 P.M., New York City
time, on that interest determination date, the rate on the
particular interest determination date for the period of the
particular index maturity as may then be published by either the
Federal Reserve System Board of Governors or the United States
Department of the Treasury that the calculation agent determines
to be comparable to the rate formerly displayed on Reuters and
published in H.15(519); or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular interest determination date calculated by
the calculation agent as a yield to maturity based on the
arithmetic mean of the secondary market offered rates at
approximately 3:30 P.M., New York City time, on that interest
determination date reported, based on their written records, by
three leading primary United States government securities dealers
in The City of New York (which may include the Agents or their
affiliates) (each, a "reference dealer"), selected by the
calculation agent (after consultation with Allstate Life) from
five reference dealers so selected by the calculation agent and
eliminating the highest quotation, or, in the event of equality,
one of
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the highest and the lowest quotation or, in the event of
equality, one of the lowest, for the most recently issued United
States Treasury securities with an original maturity of
approximately the particular index maturity, a remaining term to
maturity no more than one year shorter than that index maturity
and in a principal amount that is representative for a single
transaction in the securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be
eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular interest determination
date calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 P.M., New York City time, on that
interest determination date of three reference dealers selected
by the calculation agent (after consultation with Allstate Life)
from five reference dealers so selected by the calculation agent
and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for the most recently
issued United States Treasury securities with an original
maturity greater than the particular index maturity, a remaining
term to maturity closest to that index maturity and in a
principal amount that is representative for a single transaction
in the securities in that market at that time; or
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations will be
eliminated; or
(h) if fewer than three prices referred to in clause (f) are provided
as requested, the CMT Rate in effect on the particular interest
determination date; provided that if no CMT Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
(2) if Reuters Page FEDCMT is specified in the applicable pricing
supplement:
(a) the percentage equal to the one-week or one-month, as specified
in the applicable pricing supplement, average yield for United
States Treasury securities at "constant maturity" having the
index maturity specified in the applicable pricing supplement as
published in H.15(519) opposite the caption "Treasury constant
maturities," as the yield is displayed on Reuters (or any
successor service) (on page FEDCMT or any other page as may
replace the specified page on that service) ("Reuters Page
FEDCMT"), for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the
particular interest determination date falls; or
(b) if the rate referred to in clause (a) does not so appear on
Reuters page FEDCMT or if not so published by 3:00 P.M., New York
City time, on that interest determination date, the percentage
equal to the one-week or one-month, as specified in the
applicable pricing supplement, average yield for United States
Treasury securities at "constant maturity" having the particular
index maturity and for the week or month, as applicable,
preceding the particular interest determination date as published
in H.15(519) opposite the caption "Treasury constant maturities;"
or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519) or if not so published by 3:00 P.M., New York City
time, on that interest determination date, the one-week or
one-month, as specified in the applicable pricing supplement,
average yield for United States Treasury securities at "constant
maturity" having the particular index maturity as otherwise
announced by the Federal Reserve Bank of New York for the week or
month, as applicable, ended immediately preceding the week or
month, as applicable, in which the particular interest
determination date falls; or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular interest determination date calculated by
the calculation agent as a yield to maturity based on the
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arithmetic mean of the secondary market offered rates at
approximately 3:30 P.M., New York City time, on that interest
determination date reported based on their written records, by
three reference dealers selected by the calculation agent (after
consultation with Allstate Life) from five reference dealers so
selected by the calculation agent and eliminating the highest
quotation, or, in the event of equality, one of the highest and
the lowest quotation or, in the event of equality, one of the
lowest, for the most recently issued United States Treasury
securities with an original maturity of approximately the
particular index maturity, a remaining term to maturity no more
than one year shorter than that index maturity and in a principal
amount that is representative for a single transaction in the
securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be
eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular interest determination
date calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 P.M., New York City time, on that
interest determination date of three reference dealers selected
by the calculation agent (after consultation with Allstate Life)
from five reference dealers so selected by the calculation agent
and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for the most recently
issued United States Treasury securities with an original
maturity greater than the particular index maturity, a remaining
term to maturity closest to that index maturity and in a
principal amount that is representative for a single transaction
in the securities in that market at the time; or
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations will be
eliminated; or
(h) if fewer than three prices referred to in clause (f) are provided
as requested, the CMT Rate in effect on that interest
determination date; provided that if no CMT Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
If two United States Treasury securities with an original maturity greater
than the index maturity specified in the applicable pricing supplement have
remaining terms to maturity equally close to the particular index maturity, the
quotes for the United States Treasury security with the shorter original
remaining term to maturity will be used.
Commercial Paper Rate
"Commercial Paper Rate" means:
(1) the Money Market Yield (as defined below) on the particular interest
determination date of the rate for commercial paper having the index
maturity specified in the applicable pricing supplement as published
in H.15(519) under the caption "Commercial Paper--Nonfinancial;" or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Money
Market Yield of the rate on the particular interest determination date
for commercial paper having the particular index maturity as published
in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption
"Commercial Paper--Nonfinancial;" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on
that interest determination date of three leading dealers of United
States dollar commercial paper in The City of New York (which may
include the Agents or their affiliates) selected by the calculation
agent (after consultation with Allstate Life) for commercial paper
having the particular index maturity placed for industrial issuers
S-36
whose bond rating is "Aa" by Moody's or the equivalent from another
nationally recognized statistical rating organization; or
(4) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (3), the Commercial Paper Rate in effect on the
particular interest determination date; provided that if no Commercial
Paper Rate is then in effect, the interest rate that will be effective
as of the next interest reset date will be the initial interest rate.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------------------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable interest reset period.
Constant Maturity Swap Rate
"Constant Maturity Swap Rate" means:
(1) the rate for U.S. Dollar swaps with the designated maturity specified
in the applicable pricing supplement, expressed as a percentage, which
appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City
time, on the particular interest determination date; or
(2) if the rate referred to in clause (1) does not appear on the Reuters
Screen TGM42276 by 2:00 P.M., New York City time, on such interest
determination date, a percentage determined on the basis of the
mid-market semi-annual swap rate quotations provided by the reference
banks (as defined below) as of approximately 11:00 A.M., New York City
time, on such interest determination date, and, for this purpose, the
semi-annual swap rate means the mean of the bid and offered rates for
the semi-annual fixed leg, calculated on a 30/360 day count basis, of
a fixed-for-floating U.S. Dollar interest rate swap transaction with a
term equal to the designated maturity specified in the applicable
pricing supplement commencing on the interest reset date and in a
representative amount (as defined below) with an acknowledged dealer
of good credit in the swap market, where the floating leg, calculated
on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with
a designated maturity specified in the applicable pricing supplement.
The calculation agent will request the principal New York City office
of each of the reference banks to provide a quotation of its rate. If
at least three quotations are provided, the rate for that interest
determination date will be the arithmetic mean of the quotations,
eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest); or
(3) if such Constant Maturity Swap Rate is not determinable for a
particular interest determination date under clauses (1) and (2)
above, then such interest determination date shall be the first U.S.
Government Securities business day preceding the original interest
determination date for which the Constant Maturity Swap Rate can be
determined under clauses (1) and (2) above.
"U.S. Government Securities business day" means any day except for
Saturday, Sunday, or a day on which The Bond Market Association recommends that
the fixed income departments of its members be closed for the entire day for
purposes of trading in U.S. government securities.
"Representative amount" means an amount that is representative for a single
transaction in the relevant market at the relevant time.
"Reference banks" mean five leading swap dealers in the New York City
interbank market, selected by the calculation agent, after consultation with
Allstate Life.
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Eleventh District Cost of Funds Rate
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the particular
interest determination date falls as set forth under the caption "11th
District" on the display on Reuters (or any successor service) on page
COFI/ARMS (or any other page as may replace the specified page on that
service) ("Reuters Page COFI/ARMS") as of 11:00 A.M., San Francisco
time, on that interest determination date; or
(2) if the rate referred to in clause (1) does not so appear on Reuters
Page COFI/ARMS, the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District
that was most recently announced (the "Eleventh District Index") by
the Federal Home Loan Bank of San Francisco as the cost of funds for
the calendar month immediately preceding that interest determination
date; or
(3) if the Federal Home Loan Bank of San Francisco fails to announce the
Eleventh District Index on or prior to the particular interest
determination date for the calendar month immediately preceding that
interest determination date, the Eleventh District Cost of Funds Rate
in effect on the particular interest determination date; provided that
if no Eleventh District Cost of Funds Rate is then in effect, the
interest rate that will be effective as of the next interest reset
date will be the initial interest rate.
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EURIBOR
"EURIBOR" means, with respect to any interest determination date relating
to a series of EURIBOR notes or a series of notes that bears interest at
floating rates for which the interest rate is determined with reference to
EURIBOR (a "EURIBOR interest determination date"), the rate for deposits in
Euros as sponsored, calculated and published jointly by the
S-39
European Banking Federation and ACI--The Financial Market Association, or any
company established by the joint sponsors for purposes of compiling and
publishing those rates, having the index maturity specified in the applicable
pricing supplement, commencing on the applicable interest reset date, as the
rate appears on Reuters (or any successor service) on Page EURIBOR 01 (or any
other page as may replace that specified page on the service) ("Reuters Page
EURIBOR 01") as of 11:00 A.M., Brussels time, on the applicable EURIBOR interest
determination date. If such rate does not appear on Reuters Page EURIBOR 01, or
is not so published by 11:00 A.M., Brussels time, on the applicable EURIBOR
interest determination date, such rate will be calculated by the calculation
agent and will be the arithmetic mean of at least two quotations obtained by the
calculation agent after requesting the principal Euro-zone (as defined below)
offices of four major banks in the Euro-zone interbank market selected by the
calculation agent (after consultation with Allstate Life) to provide the
calculation agent with its offered quotation for deposits in Euros for the
period of the index maturity specified in the applicable pricing supplement,
commencing on the applicable interest reset date, to prime banks in the
Euro-zone interbank market at approximately 11:00 A.M., Brussels time, on the
applicable EURIBOR interest determination date and in a principal amount not
less than the equivalent of $1 million in Euros that is representative for a
single transaction in Euro in the market at that time. If fewer than two such
quotations are so provided, the rate on the applicable EURIBOR interest
determination date will be calculated by the calculation agent and will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels time,
on such EURIBOR interest determination date by four major banks in the Euro-zone
selected by the Calculation Agent (after consultation with Allstate Life) for
loans in Euro to leading European banks, having the index maturity specified in
the applicable pricing supplement, commencing on the applicable interest reset
date and in a principal amount not less than the equivalent of $1 million in
Euros that is representative for a single transaction in Euros in the market at
that time. If the banks so selected by the calculation agent are not quoting as
mentioned above, EURIBOR will be EURIBOR in effect on the applicable EURIBOR
interest determination date; provided that if no EURIBOR is then in effect, the
interest rate that will be effective as of the next interest reset date will be
the initial interest rate.
"Euro-zone" means the region comprised of member states of the European
Union that have adopted the single currency in accordance with the Treaty
Establishing the European Community, as amended by the Treaty on European Union.
Federal Funds Rate
"Federal Funds Rate" means:
(1) the rate as of the particular interest determination date for United
States dollar federal funds as published in H.15(519) under the
caption "EFFECT" and displayed on Reuters (or any successor service)
on page FEDFUNDS1 (or any other page as may replace the specified page
on that service) ("Reuters Page FEDFUNDS1"); or
(2) if the rate referred to in clause (1) does not so appear on Reuters
Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City
time, on the related calculation date, the rate as of the particular
interest determination date for United States dollar federal funds as
published in H.15 Daily Update, or such other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "Federal Funds (Effective);" or
(3) if such rate does not appear on Reuters Page FEDFUNDS1 or is not so
published by 5:00 P.M., New York City time, on the related calculation
date, the rate will be the rate for the first preceding day for which
such rate is set forth in H.15(519) under the caption "Federal Funds
(Effective)", as such rate is displayed on the Reuters Page FEDFUNDS1.
LIBOR
"LIBOR" means:
(1) the rate for deposits in the LIBOR currency having the index maturity
specified in the applicable pricing supplement, commencing on the
related interest reset date, that appears on the LIBOR page as of
11:00 A.M., London time, on the particular interest determination
date; or
(2) if no rate appears on the particular interest determination date on
the LIBOR page as specified in clause (1), the rate calculated by the
calculation agent as the arithmetic mean of at least two offered
quotations obtained by the calculation agent after requesting the
principal London offices of each of four major reference banks (which
may include affiliates of the Agents), in the London interbank market
selected by the Calculation Agent (after consultation with Allstate
Life) to provide the calculation agent with its offered quotation for
deposits in the LIBOR currency for the period of the particular index
maturity, commencing on the related interest reset date, to prime
banks in the London interbank market at approximately 11:00 A.M.,
London time, on that interest determination date and in a principal
amount that is representative for a single transaction in the LIBOR
currency in that market at that time; or
(3) if fewer than two offered quotations referred to in clause (2) are
provided as requested, the rate calculated by the calculation agent as
the arithmetic mean of the rates quoted at approximately 11:00 A.M.,
in the applicable principal financial center, on the particular
interest determination date by three major banks (which may include
affiliates of the Agents), in that principal financial center selected
by the calculation agent (after consultation with Allstate Life) for
loans in the LIBOR currency to leading European banks, having the
particular index maturity and in a principal amount that is
representative for a single transaction in the LIBOR currency in that
market at that time; or
(4) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (3), LIBOR in effect on the particular interest
determination date; provided that if no LIBOR is then in effect, the
interest rate that will be effective as of the next interest reset
date will be the initial interest rate.
"LIBOR currency" means the currency specified in the applicable pricing
supplement as to which LIBOR shall be calculated or, if no currency is specified
in the applicable pricing supplement, United States dollars.
"LIBOR page" means the display on Reuters (or any successor service) on the
page specified in the applicable pricing supplement (or any other page as may
replace that page on that service) for the purpose of displaying the London
interbank rates of major banks for the LIBOR currency.
"London banking day" means a day on which commercial banks are open for
business (including dealings in the LIBOR currency) in London.
Prime Rate
"Prime Rate" means:
(1) the rate on the particular interest determination date as published in
H.15(519) under the caption "Bank Prime Loan;" or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date as published in H.15 Daily
Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Bank
Prime Loan;" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen US
PRIME 1 Page (as defined below) as the applicable bank's prime rate or
base lending rate as of 11:00 A.M., New York City time, on that
interest determination date; or
(4) if fewer than four rates referred to in clause (3) are so published by
3:00 P.M., New York City time, on the related calculation date, the
rate on the particular interest determination date calculated by the
calculation agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on that
interest determination date by three major banks (which may include
affiliates of the Agents) in The City of New York selected by the
calculation agent (after consultation with Allstate Life); or
(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the particular
interest determination date; provided that if no Prime Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
"Reuters Screen US PRIME 1 Page" means the display on Reuters (or any
successor service) on the "US PRIME 1" page (or any other page as may replace
that page on that service) for the purpose of displaying prime rates or base
lending rates of major United States banks.
S-40
Treasury Rate
"Treasury Rate" means:
(1) the rate from the auction held on the Treasury Rate interest
determination date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the index maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on
the display on Reuters (or any successor service) on page USAUCTION10
(or any other page as may replace that page on that service) ("Reuters
USAUCTION10") or page USAUCTION11 (or any other page as may replace
that page on that service) ("Reuters USAUCTION11"); or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Bond
Equivalent Yield (as defined below) of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High;" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills
as announced by the United States Department of the Treasury; or
(4) if the rate referred to in clause (3) is not so announced by the
United States Department of the Treasury, or if the Auction is not
held, the Bond Equivalent Yield of the rate on the particular interest
determination date of the applicable Treasury Bills as published in
H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(5) if the rate referred to in clause (4) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date of the applicable Treasury
Bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(6) if the rate referred to in clause (5) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New
York City time, on that interest determination date, of three primary
United States government securities dealers (which may include the
Agents or their affiliates) selected by the calculation agent (after
consultation with Allstate Life), for the issue of Treasury Bills with
a remaining maturity closest to the index maturity specified in the
applicable pricing supplement; or
(7) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (6), the Treasury Rate in effect on the particular
interest determination date; provided that if no Treasury Rate is then
in effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D x N x 100
-------------------------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
interest reset period.
Other/Additional Provisions; Addendum
Any provisions with respect to the notes of a series, including the
specification and determination of one or more interest rate bases, the
calculation of the interest rate applicable to a series of notes that bears
interest at floating rates, the
S-41
interest payment dates, the stated maturity date, any redemption or repayment
provisions or any other term relating to the applicable series of notes, may be
modified and/or supplemented as specified under "Other/Additional Provisions" on
the face thereof or in an addendum relating thereto, if so specified on the face
thereof and, in each case, described in the applicable pricing supplement.
Discount Notes
The trusts may from time to time issue series of notes ("discount notes")
that have an issue price (as specified in the applicable pricing supplement)
that is less than 100% of the principal amount thereof (i.e. par) by more than a
percentage equal to the product of 0.25% and the number of full years to the
stated maturity date. A series of discount notes may not bear any interest
currently or may bear interest at a rate that is below market rates at the time
of issuance. The difference between the issue price of a series of discount
notes and par is referred to as the "discount." In the event of redemption,
repayment or acceleration of maturity of a series of discount notes, the amount
payable to the holders of such series of discount notes will be equal to the sum
of:
o the issue price (increased by any accruals of discount) and, in the
event of any redemption of such series of discount notes, if
applicable, multiplied by the initial redemption percentage (as
adjusted by the annual redemption percentage reduction, if
applicable); and
o any unpaid interest accrued on such series of discount notes to the
date of the redemption, repayment or acceleration of maturity, as the
case may be.
For purposes of determining the amount of discount that has accrued as of
any date on which a redemption, repayment or acceleration of maturity occurs for
a series of discount notes, a discount will be accrued using a constant yield
method. The constant yield will be calculated using a 30-day month, 360-day year
convention, a compounding period that, except for the initial period (as defined
below), corresponds to the shortest period between interest payment dates for
the applicable series of discount notes (with ratable accruals within a
compounding period), a coupon rate equal to the initial coupon rate applicable
to the applicable series of discount notes and an assumption that the maturity
of such series of discount notes will not be accelerated. If the period from the
date of issue to the first interest payment date for a series of discount notes
(the "initial period") is shorter than the compounding period for such series of
discount notes, a proportionate amount of the yield for an entire compounding
period will be accrued. If the initial period is longer than the compounding
period, then the period will be divided into a regular compounding period and a
short period with the short period being treated as provided in the preceding
sentence. The accrual of the applicable discount may differ from the accrual of
original issue discount for purposes of the Code, certain series of discount
notes may not be treated as having original issue discount within the meaning of
the Code, and certain series of notes other than discount notes may be treated
as issued with original issue discount for federal income tax purposes. See
"United States Federal Income Tax Considerations."
Amortizing Notes
The trusts may from time to time issue series of notes ("amortizing notes")
with the amount of principal thereof and interest thereon payable in
installments over their terms. Unless otherwise specified in the applicable
pricing supplement, interest on each series of amortizing notes will be computed
on the basis of a 360-day year of twelve 30-day months. Payments with respect to
a series of amortizing notes will be applied first to interest due and payable
thereon and then to the reduction of the unpaid principal amount thereof.
Further information concerning additional terms and provisions of a particular
series of amortizing notes will be specified in the applicable pricing
supplement, including a table setting forth repayment information for such
series of amortizing notes.
Form of Notes
Book-entry notes
When a trust issues notes in book-entry form, it will issue one or more
global securities representing the entire issue of notes. Unless otherwise
specified in the applicable pricing supplement, these certificates will name a
nominee of The Depository Trust Company, New York, New York ("DTC") as the owner
of the notes. DTC maintains a computerized system that will reflect your
ownership of the applicable notes through an account you will maintain with your
broker/dealer, bank, trust company or other representative. If specified in the
applicable pricing supplement, notes of a series may also be issued in
book-entry form and registered in the name of a nominee for Euroclear and
Clearstream Luxembourg. For
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additional information regarding such notes, you should review "Special
Provisions Relating to Foreign Currency Notes" below.
Unless otherwise specified in the applicable pricing supplement, DTC's
nominee will be considered the owner of your notes in the records of the issuing
trust and will be the entity entitled to cast a vote regarding your notes.
However, DTC and the broker/dealers, banks, trust companies and other
representatives that are part of DTC's computerized system are required to
contact you for voting instructions.
Definitive Notes
When a trust issues notes in definitive form, you will receive a note
certificate evidencing your notes. The certificate will name you as the owner of
such notes, unless you choose to have your broker/dealer, bank, trust company or
other representative hold these certificates for you. If your name appears on
the note certificate evidencing your notes, then you will be considered the
owner of your notes for all purposes under the relevant indenture. For example,
if the issuing trust needs to ask the holders of the applicable series of notes
to vote on a proposed amendment to such series of notes, you will be asked to
cast the vote regarding your notes. If you have chosen to have some other entity
hold the note certificates for you, that entity will be considered the owner of
your notes in the records of the issuing trust and will be entitled to cast the
vote regarding your notes. However, this entity is required to contact you for
voting instructions.
Exchanges
Definitive notes cannot be exchanged for book-entry notes. Book-entry notes
can be exchanged for definitive notes only if;
o the depositary notifies the issuing trust that it is unwilling or
unable to continue as depositary for the global securities or the
issuing trust becomes aware that the depositary has ceased to be a
clearing agency registered under the Exchange Act and, in any such
case, such trust fails to appoint a successor to the depositary within
60 calendar days;
o subject to the procedures of DTC, the issuing trust, in its sole
discretion, determines that the notes of the relevant series should no
longer be represented solely by one or more global securities; or
o an event of default has occurred and is continuing with respect to the
relevant series of notes under the applicable indenture and the
maturity of the notes of such series is accelerated in accordance with
the terms of the applicable indenture and the notes of such series.
In these limited circumstances, the issuing trust will issue to you
definitive notes in exchange for the book-entry notes. There will be no service
charge for this exchange, but if a tax or other governmental charge is imposed,
the issuing trust may require you to pay it.
Clearing Systems
Unless otherwise specified in the applicable pricing supplement, each note
will be deposited with, or on behalf of, DTC, as depositary, and registered in
the name of Cede & Co. (DTC's partnership nominee). Investors may elect to hold
interests in the notes through DTC (in the United States) or, if the notes are
eligible, through Clearstream Luxembourg or Euroclear, as operator (the
"Euroclear Operator") of the Euroclear System, if they are participants in such
systems or indirectly through organizations which are participants in such
systems. Clearstream Luxembourg and the Euroclear Operator will hold interests
on behalf of their participants through customers' securities accounts in
Clearstream Luxembourg's and the Euroclear Operator's names, respectively, on
the books of their respective depositaries, which in turn will hold such
interests in customers' securities accounts in the depositaries' names on the
books of DTC. It is anticipated that Citibank, N.A. will act as depositary for
Clearstream Luxembourg and that JPMorgan Chase will act as depositary for the
Euroclear Operator (in such capacities, the "U.S. Depositaries").
If so specified in the applicable pricing supplement, notes of a series may
be registered in the name of a nominee for, and deposited with, a common
depositary for Euroclear and Clearstream Luxembourg.
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Clearstream Luxembourg advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Luxembourg holds securities
for its participating organizations ("Clearstream Participants") and facilitates
the clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream
Participants, thereby eliminating the need for physical movement of
certificates. Clearstream Luxembourg provides to Clearstream Participants, among
other things, services for safekeeping, administration, clearance and settlement
of internationally traded securities and securities lending and borrowing.
Clearstream Luxembourg interfaces with domestic markets in several countries. As
a professional depositary, Clearstream Luxembourg is subject to regulation by
the Luxembourg Monetary Institute. Clearstream Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Agents named in this prospectus
supplement or any applicable pricing supplement. Indirect access to Clearstream
Luxembourg is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Clearstream Participant either directly or indirectly.
Distributions with respect to the notes held beneficially through
Clearstream Luxembourg will be credited to cash accounts of Clearstream
Participants in accordance with its rules and procedures, to the extent received
by the U.S. Depositary for Clearstream Luxembourg.
The Euroclear Operator advises that Euroclear was created in 1968 to hold
securities for participants of Euroclear ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Euroclear includes various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries. Euroclear is operated by the Euroclear Operator under
contract with Euroclear Clearance Systems S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for Euroclear on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the Agents named in this prospectus supplement or any applicable
pricing supplement. Indirect access to Euroclear is also available to other
firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator was granted a banking license by the Belgian Banking
and Finance Commission in 2000, authorizing it to carry out banking activities
on a global basis. It took over operation of Euroclear from the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York on December 31,
2000. Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
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GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
General
Initial settlement for the notes of a series will be made in immediately
available funds. Secondary market trading between DTC Participants will occur in
the ordinary way in accordance with DTC's rules and will be settled in
immediately available funds using DTC's Same-Day Funds Settlement System.
Secondary market trading between Clearstream Participants and/or Euroclear
Participants will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Clearstream Luxembourg and Euroclear and will
be settled using the procedures applicable to conventional eurobonds in
immediately available funds. Cross-market transfers between persons holding
directly or indirectly through DTC on the one hand, and directly or indirectly
through Clearstream Participants or Euroclear Participants, on the other, will
be effected in DTC in accordance with DTC's rules on behalf of the relevant
European international clearing system by its U.S. Depositary. However, such
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving notes in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Clearstream Participants and Euroclear Participants may not deliver
instructions directly to DTC. Because of time-zone differences, credits of notes
received in Clearstream Luxembourg or Euroclear as a result of a transaction
with a DTC Participant will be made during subsequent securities settlement
processing and will be credited the business day following the DTC settlement
date. Such credits or any transactions in such notes settled during such
processing will be reported to the relevant Euroclear Participants or
Clearstream Participants on such business day. Cash received in Clearstream
Luxembourg or Euroclear as a result of sales of notes by or through a
Clearstream Participant or a Euroclear Participant to a DTC Participant will be
received with value on the DTC settlement date but will be available in the
relevant Clearstream Luxembourg or Euroclear cash account only as of the
business day following settlement in DTC.
Certain alternative clearance and settlement procedures will apply if the
applicable pricing supplement specifies that notes of a series are denominated
in non-U.S. dollar currencies. Such alternative procedures are described below
under "Special Provisions Relating to Foreign Currency Notes."
Secondary Market Trading
Because the purchaser determines the place of delivery, it is important to
establish at the time of trading of any notes where both the purchaser's and
seller's accounts are located to ensure that settlement can be made on the
desired value date.
Trading between DTC Participants
Secondary market sales of notes held in DTC between DTC participants will
occur in the ordinary way in accordance with DTC rules and will be settled using
the procedures applicable to United States corporate debt obligations.
Trading between Euroclear and/or Clearstream Participants
Secondary market sales of beneficial interests in the notes held through
Euroclear or Clearstream Luxembourg to purchasers that will hold beneficial
interests through Euroclear or Clearstream Luxembourg will be conducted in
accordance with the normal rules and operating procedures of Euroclear and
Clearstream Luxembourg and will be settled using the procedures applicable to
conventional eurobonds.
Trading between DTC Seller and Euroclear/Clearstream Luxembourg Purchaser
When book-entry interests in notes are to be transferred from the account
of a DTC participant to the account of a Euroclear or Clearstream Luxembourg
accountholder, the purchaser must first send instructions to Euroclear or
Clearstream Luxembourg through a participant at least one business day prior to
the settlement date. Euroclear or Clearstream Luxembourg will then instruct its
depositary to receive the notes and make payment for them. On the settlement
date, the
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depositary will make payment to the DTC participant's account and the notes will
be credited to the depositary's account. After settlement has been completed,
DTC will credit the notes to the U.S. Depositary for Euroclear or Clearstream
Luxembourg, as the case may be. Euroclear or Clearstream Luxembourg will credit
the notes, in accordance with its usual procedures, to the participant's
account, and the participant will then credit the purchaser's account. These
securities credits will appear the next day (European time) after the settlement
date. The cash debit from the account of Euroclear or Clearstream Luxembourg
will be back-valued to the value date (which will be the preceding day if
settlement occurs in New York). If settlement is not completed on the intended
value date (i.e., the trade fails), the cash debit will instead be valued at the
actual settlement date. Since the settlement will occur during New York business
hours, a DTC participant selling an interest in the notes can use its usual
procedures for transferring notes to the U.S. Depositary for Euroclear or
Clearstream Luxembourg, as the case may be, for the benefit of Euroclear
Participants or Clearstream Participants. The DTC seller will receive the sale
proceeds on the settlement date. Thus, to the DTC seller, a cross-market sale
will settle no differently than a trade between two DTC Participants.
Trading between a Euroclear or Clearstream Luxembourg Seller and a DTC
Purchaser
Due to time zone differences in their favor, Euroclear participants and
Clearstream Luxembourg participants can use their usual procedures to transfer
notes through the applicable U.S. Depositary to a DTC participant. The seller
must first send instructions to Euroclear or Clearstream Luxembourg through a
participant at least one business day prior to the settlement date. Euroclear or
Clearstream Luxembourg will then instruct its U.S. Depositary to credit the
notes to the DTC participant's account and receive payment. The payment will be
credited in the account of the Euroclear or Clearstream Luxembourg participant
on the following day, but the receipt of the cash proceeds will be back-valued
to the value date (which will be the preceding day if settlement occurs in New
York). If settlement is not completed on the intended value date (i.e., the
trade fails), the receipt of the cash proceeds will instead be valued at the
actual settlement date.
Although the foregoing sets out the procedures of Euroclear, Clearstream
Luxembourg and DTC in order to facilitate the transfers of interests in the
notes among participants of DTC, Clearstream Luxembourg and Euroclear, none of
Euroclear, Clearstream Luxembourg or DTC is under any obligation to perform or
continue to perform such procedures, and such procedures may be discontinued at
any time. Neither the registrants and the trusts nor any Agent or any paying
agent or any affiliate of any of the above, or any person by whom any of the
above is controlled for the purposes of the Securities Act, will have any
responsibility for the performance by DTC, Euroclear and Clearstream Luxembourg
or their respective direct or indirect participants or accountholders of their
respective obligations under the rules and procedures governing their operations
or for the sufficiency for any purpose of the arrangements described above.
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SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
General
Unless otherwise specified in the applicable pricing supplement, foreign
currency notes will not be sold in, or to residents of, the country issuing the
specified currency. The information set forth in this prospectus supplement is
directed to prospective purchasers who are United States residents. The trusts
and the Agents disclaim any responsibility to advise prospective purchasers who
are residents of countries other than the United States with respect to any
matters that may affect the purchase, holding or receipt of payments of
principal of, and premium, if any, and interest, if any, on, their foreign
currency notes. These purchasers should consult their own financial and legal
advisors with regard to these risks. See "Risk Factors--Risk Factors Relating to
the Notes--Foreign currency notes are subject to exchange rate and exchange
control risks."
Payment of Principal and/or any Premium, if any, Interest and Additional Amounts
Unless otherwise specified in the applicable pricing supplement, each trust
is obligated to make, or cause to be made, payments of principal of, any premium
and interest on, and any additional amounts with respect to a foreign currency
note issued by it in the specified currency. Any amounts so payable by such
trust in the specified currency will be converted by the indenture trustee, or
another entity specified in the applicable indenture, as exchange rate agent
(including, in each case, any successors, the "exchange rate agent") into United
States dollars for payment to the registered holder or holders thereof unless
otherwise specified in the applicable pricing supplement or a registered holder
elects to receive these amounts in the specified currency as provided below.
Unless otherwise specified in the applicable pricing supplement, any United
States dollar amount to be received by the registered holder or holders of a
series of foreign currency notes will be based on the highest bid quotation in
The City of New York received by the exchange rate agent at approximately 11:00
A.M., New York City time, on the second business day preceding the applicable
payment date from three recognized foreign exchange dealers (one of whom may be
the exchange rate agent) selected by the exchange rate agent and approved by the
issuing trust for the purchase by the quoting dealer of the specified currency
for United States dollars for settlement on that payment date in the aggregate
amount of the specified currency payable to the registered holder or holders of
such series of foreign currency notes scheduled to receive United States dollar
payments and at which the applicable dealer commits to execute a contract. All
currency exchange costs will be borne by the relevant registered holder or
holders of such series of foreign currency notes by deductions from any
payments. If three bid quotations are not available, payments will be made in
the specified currency.
Registered holders of foreign currency notes may elect to receive all or a
specified portion of any payment of principal, and/or any interest, premium and
additional amounts in the specified currency by submitting a written request to
the indenture trustee at its corporate trust office in The City of New York on
or prior to the applicable regular interest record date or special interest
record date or at least fifteen calendar days prior to the maturity date, as the
case may be. Such written request may be mailed or hand delivered or sent by
cable, telex or other form of facsimile transmission. Such election will remain
in effect until revoked by written notice delivered to the indenture trustee on
or prior to a regular interest record date or special interest record date or at
least fifteen calendar days prior to the maturity date, as the case may be.
Registered holders of foreign currency notes to be held in the name of a broker
or nominee should contact their broker or nominee to determine whether and how
an election to receive payments in the specified currency may be made.
Unless otherwise specified in the applicable pricing supplement, if the
specified currency is other than United States dollars, an entitlement holder
with respect to a note represented by a global security which elects to receive
payments of principal, and/or any interest, premium and additional amounts in
the specified currency must notify the participant through which it owns its
interest on or prior to the applicable regular interest record date or special
interest record date or at least fifteen calendar days prior to the maturity
date, as the case may be, of its election. The applicable participant must
notify the depositary of such election on or prior to the third business day
after the applicable regular interest record date or at least twelve calendar
days prior to the maturity date, as the case may be, and the depositary will
notify the indenture trustee of that election on or prior to the fifth business
day after the applicable regular interest record date or at least ten calendar
days prior to the maturity date, as the case may be. If complete instructions
are received by the participant from the applicable entitlement holder and
forwarded by the participant to the depositary, and by the depositary to the
indenture trustee, on or prior to such dates, then the applicable entitlement
holder will receive payments in the specified currency.
Notwithstanding anything herein to the contrary, if the specified currency
for a series of foreign currency notes is not available for any required payment
of principal and/or any interest, premium and additional amounts due to the
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imposition of exchange controls or other circumstances beyond the issuing
trust's control, the issuing trust will be entitled to satisfy its obligations
with respect to such series of foreign currency notes by making, or causing to
be made, payments in United States dollars based on the market exchange rate
computed by the exchange rate agent on the second business day prior to the
particular payment date or, if the market exchange rate is not then available,
on the basis of the most recently available market exchange rate.
The "market exchange rate" for a specified currency other than United
States dollars means the noon dollar buying rate in The City of New York for
cable transfers for the specified currency as certified for customs purposes
(or, if not so certified, as otherwise determined) by the Federal Reserve Bank
of New York.
All determinations made by the exchange rate agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on the registered holder or holders of the foreign currency
notes and any applicable entitlement holders.
Judgment Currency
Each trust will indemnify the registered holder of any note issued by it
against any loss incurred as a result of any judgment or order being given or
made for any amount due under the particular note and that judgment or order
requiring payment in a currency (the "judgment currency") other than the
specified currency, and as a result of any variation between:
o the rate of exchange at which the specified currency amount is
converted into the judgment currency for the purpose of that judgment
or order; and
o the rate of exchange at which the registered holder, on the date of
payment of that judgment or order, is able to purchase the specified
currency with the amount of the judgment currency actually received.
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DESCRIPTION OF THE FUNDING AGREEMENTS
Each trust will use the net proceeds from the issuance of its series of
notes to the public to purchase from Global Funding one or more funding
agreements issued by Allstate Life. The funding agreement(s) will have a
principal amount equal to the principal amount of the related series of notes.
The funding agreement(s) will otherwise have payment and other terms
substantially similar to the related series of notes.
The funding agreement(s) may be interest bearing or non-interest bearing
and, if interest bearing, may bear interest at fixed or floating rates. The
calculation of the interest rate, the due dates for payments and other payment
terms of each funding agreement will be determined in the manner substantially
similar to that described above under "Description of the Notes." An amount
equal to the principal amount of the funding agreement plus accrued but unpaid
interest, if any, and accrued discount, if any (in the case of a discount
funding agreement) (other than an amortizing funding agreement) will be payable
on its maturity date. Allstate Life may issue an amortizing funding agreement
that pays an amount in respect of both interest and deposit amount over the life
of the funding agreement. For a more detailed discussion of the funding
agreements, see "Description of the Funding Agreements" in the accompanying
prospectus.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
General
This section provides a discussion of the material United States Federal
income tax consequences of the purchase, ownership and disposition of the notes.
This summary is based upon laws, regulations, rulings and decisions now in
effect, all of which are subject to change (including changes in effective
dates) or possible differing interpretations. This summary deals only with notes
held as capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, partnerships, insurance companies,
regulated investment companies, dealers in securities or currencies, persons
holding notes as a hedge against currency risks or as a position in a "straddle"
for tax purposes, or persons whose functional currency is not the United States
dollar. It also does not deal with holders other than initial purchasers of
notes (except where otherwise specifically noted). Persons considering the
purchase of the notes should consult their own tax advisors concerning the
application of United States Federal income tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of the notes arising under the laws of any other taxing
jurisdiction. This summary does not consider the United States Federal income
tax consequences of the purchase, ownership or disposition of a note by a
partnership. If a partnership holds a note, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. Partnerships holding a note, and partners in a partnership holding
a note, should consult their tax advisors.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for United States Federal income tax purposes:
o a citizen or resident of the United States;
o a corporation (including an entity treated as a corporation for United
States Federal income tax purposes) created or organized in or under
the laws of the United States, any state thereof or the District of
Columbia;
o an estate whose income is subject to United States Federal income tax
regardless of its source; or
o subject to applicable transition rules, a trust if a court within the
United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have
the authority to control all substantial decisions of the trust.
As used in this section, the term "non-U.S. Holder" means a beneficial
owner of a note that is an individual, a corporation, an estate or trust that is
not a U.S. Holder.
Classification of the Issuer and Notes
In the opinion of LeBoeuf, Lamb, Greene & MacRae LLP, special tax counsel
to Global Funding, under current law and based on certain facts and assumptions
contained in such opinion:
o Global Funding and each trust will be ignored for United States
Federal income tax purposes and will not be treated as an association
or a publicly traded partnership taxable as a corporation; and
o the notes will be classified as indebtedness of Allstate Life for
United States Federal income tax purposes.
Allstate Life, Global Funding and each trust agree, and each holder and
beneficial owner of notes by purchasing the notes agrees, for all United States
Federal, state and local income and franchise tax purposes (i) to treat the
notes as indebtedness of Allstate Life, (ii) Global Funding and each trust will
be ignored and will not be treated as an association or a publicly traded
partnership taxable as a corporation and (iii) to not take any action
inconsistent with the treatment described in (i) and (ii) unless otherwise
required by law. The remainder of this discussion assumes the notes are properly
treated as indebtedness of Allstate Life for all United States Federal income
tax purposes.
An opinion of tax counsel is not binding on the Internal Revenue Service
(the "IRS") or the courts, and no ruling on any of the consequences or issues
discussed below will be sought from the IRS. The IRS might assert that each
trust should be treated as a separate grantor trust for United States Federal
income tax purposes, in which case the holders of beneficial interests in the
notes related to such trust would be treated as owning a pro rata undivided
interest in the assets of such trust.
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In such a case, the tax consequences to beneficial owners of the notes would not
be materially different than those described herein. Persons considering the
purchase of notes should consult their own tax advisors about the United States
Federal income tax consequences of an investment in the notes and the
application of United States Federal income tax laws, as well as the laws of any
state, local or foreign taxing jurisdictions, to their particular situations.
U.S. Holders
Payments of Interest
Except as described below, payments of interest on a note generally
will be taxable to a U.S. Holder as ordinary interest income at the time such
payments are accrued or are received (in accordance with the U.S. Holder's
regular method of tax accounting).
Discount Notes
The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of notes issued with original issue discount ("discount notes").
For United States Federal income tax purposes, original issue discount
("OID") is the excess of the stated redemption price at maturity of a note over
its issue price, if such excess equals or exceeds a de minimis amount (generally
1/4 of 1% of the note's stated redemption price at maturity multiplied by the
number of complete years to its maturity from its issue date or, in the case of
a note providing for the payment of any amount other than qualified stated
interest (as defined below) prior to maturity, multiplied by the weighted
average maturity of such note). The issue price of each note in an issue of
notes equals the first price at which a substantial amount of such notes has
been sold (ignoring sales to bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers). The stated redemption price at maturity of a note is the sum of
all payments provided by the note other than "qualified stated interest"
payments. The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt instruments
of the issuer) at least annually at a single fixed rate. In addition, if a note
bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on such note or any "true" discount on such note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then some or all of the stated interest on the note would be
treated as OID rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a discount note must include OID in income as
ordinary interest for United States Federal income tax purposes as it accrues
under a constant yield method in advance of receipt of the cash payments
attributable to such income, regardless of such U.S. Holder's regular method of
tax accounting. In general, the amount of OID included in income by the initial
U.S. Holder of a discount note is the sum of the daily portions of OID with
respect to such discount note for each day during the taxable year (or portion
of the taxable year) on which such U.S. Holder held such discount note. The
"daily portion" of OID on any discount note is determined by allocating to each
day in any accrual period a ratable portion of the OID allocable to that accrual
period. An "accrual period" may be of any length and the accrual periods may
vary in length over the term of the discount note, provided that each accrual
period is no longer than one year and each scheduled payment of principal or
interest occurs either on the final day of an accrual period or on the first day
of an accrual period. The amount of OID allocable to each accrual period is
generally equal to the difference between:
o the product of the discount note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined
on the basis of compounding at the close of each accrual period and
appropriately adjusted to take into account the length of the
particular accrual period); and
o the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of a discount note at the
beginning of any accrual period is the sum of the issue price of the
discount note plus the amount of OID allocable to all prior accrual
periods minus the amount of any prior payments on the discount note
that were not qualified stated interest payments. Under these rules,
U.S. Holders generally will have to include in income increasingly
greater amounts of OID in successive accrual periods.
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A U.S. Holder who purchases a discount note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the discount note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the discount note at an "acquisition premium." Under the acquisition
premium rules, the amount of OID which such U.S. Holder must include in its
gross income with respect to such discount note for any taxable year (or portion
thereof in which the U.S. Holder holds the discount note) will be reduced (but
not below zero) by the portion of the acquisition premium properly allocable to
the period.
Floating Rate Notes
Notes that bear interest at floating rates ("variable notes") are subject
to special rules whereby a variable note will qualify as a "variable rate debt
instrument" if:
o its issue price does not exceed the total noncontingent principal
payments due under the variable note by more than a specified de
minimis amount;
o it provides for stated interest, paid or compounded at least annually,
at current values of, one or more qualified floating rates, a single
fixed rate and one or more qualified floating rates, a single
objective rate, or a single fixed rate and a single objective rate
that is a qualified inverse floating rate; and
o it does not provide for any principal payments which are contingent.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
variable note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, two or more qualified floating rates that can reasonably be expected
to have approximately the same values throughout the term of the variable note
(e.g., two or more qualified floating rates with values within 25 basis points
of each other as determined on the variable note's issue date) will be treated
as a single qualified floating rate. Notwithstanding the foregoing, a variable
rate that would otherwise constitute a qualified floating rate but which is
subject to one or more restrictions such as a maximum numerical limitation
(i.e., a cap) or a minimum numerical limitation (i.e., a floor) may, under
certain circumstances, fail to be treated as a qualified floating rate unless
such cap or floor is fixed throughout the term of the note. An "objective rate"
is a rate that is not itself a qualified floating rate but which is determined
using a single fixed formula and that is based on objective financial or
economic information. A rate will not qualify as an objective rate if it is
based on information that is within the control of Allstate Life (or a related
party) or that is unique to the circumstances of Allstate Life (or a related
party), such as dividends, profits, or the value of Allstate Life's stock
(although a rate does not fail to be an objective rate merely because it is
based on the credit quality of Allstate Life). A "qualified inverse floating
rate" is any objective rate where such rate is equal to a fixed rate minus a
qualified floating rate, as long as variations in the rate can reasonably be
expected to inversely reflect contemporaneous variations in the qualified
floating rate. In addition, if a variable note provides for stated interest at a
fixed rate for an initial period of one year or less followed by a variable rate
that is either a qualified floating rate or an objective rate and if the
variable rate on the variable note's issue date is intended to approximate the
fixed rate (e.g., the value of the variable rate on the issue date does not
differ from the value of the fixed rate by more than 25 basis points), then the
fixed rate and the variable rate together will constitute either a single
qualified floating rate or objective rate, as the case may be.
If a variable note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" and if the interest on such note
is unconditionally payable in cash or property (other than debt instruments of
the issuer) at least annually, then all stated interest on the note will
constitute qualified stated interest and will be taxed accordingly. Thus, a
variable note that provides for stated interest at either a single qualified
floating rate or a single objective rate throughout the term thereof and that
qualifies as a "variable rate debt instrument" will generally not be treated as
having been issued with OID unless the variable note is issued at a "true"
discount (i.e., at a price below the note's stated principal amount) in excess
of a specified de minimis amount. The amount of qualified stated interest and
the amount of OID, if any, that accrues during an accrual period on such a
variable note is determined under the rules applicable to fixed rate debt
instruments by assuming that the variable rate is a fixed rate equal to:
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o in the case of a qualified floating rate or qualified inverse floating
rate, the value, as of the issue date, of the qualified floating rate
or qualified inverse floating rate; or
o in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is
reasonably expected for the variable note. The qualified stated
interest allocable to an accrual period is the amount of interest
actually paid during such accrual period.
In general, any other variable note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of OID and qualified stated
interest on the variable note. A variable note is converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the variable
note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the variable note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the variable note is converted into a fixed rate
that reflects the yield that is reasonably expected for the variable note. In
the case of a variable note that qualifies as a "variable rate debt instrument"
and provides for stated interest at a single fixed rate in addition to either
one or more qualified floating rates or a qualified inverse floating rate, the
fixed rate is initially converted into a qualified floating rate (or a qualified
inverse floating rate, if the variable note provides for a qualified inverse
floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the variable note as of the variable note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the variable note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.
Once the variable note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of OID and qualified
stated interest, if any, are determined for the "equivalent" fixed rate debt
instrument by applying the general OID rules to the "equivalent" fixed rate debt
instrument. A U.S. Holder of the variable note will account for such OID and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed rate
debt instrument. Each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or OID assumed to have been accrued or paid
with respect to the "equivalent" fixed rate debt instrument in the event that
such amounts differ from the actual amount of interest accrued or paid on the
variable note during the accrual period.
If the variable note does not qualify as a "variable rate debt instrument"
then the variable note would be treated as a contingent payment debt instrument.
A U.S. Holder of a contingent payment debt instrument is generally required to
include future contingent and noncontingent interest payments in income under
the constant yield method as such interest accrues based on Allstate Life's
determination of the "comparable yield" and the establishment of a "projected
payment schedule" that must produce the comparable yield. The comparable yield
is the yield at which Allstate Life would issue a fixed rated debt instrument
with similar terms and conditions. The projected payment schedule consists of
all stated principal payments and a projected amount and time for each
contingent interest payment. If the actual amount of any contingent payment,
once determined, differs from the projected amounts, appropriate adjustments are
to be made to the amounts required to be included in gross income by the U.S.
Holder. The yield, timing and amounts set forth in the projected payment
schedule are for purposes of computing the OID only and are not assurances by
the trusts with respect to any aspect of the notes. Because U.S. Holders will
generally be bound by Allstate Life's determination of the comparable yield and
by the projected payment schedule for United States Federal income tax purposes,
a U.S. Holder's income inclusions may be accelerated relative to the time
payments under the notes are in fact made. The IRS has authority to disregard a
projected payment schedule it determines to be unreasonable. Any gain recognized
by a U.S. Holder on the sale, exchange, or retirement of a contingent payment
debt instrument will be treated as interest income and all or a portion of any
loss realized could be treated as ordinary loss as opposed to capital loss
(depending upon the circumstances). The United States Federal income tax
treatment of variable notes that are treated as contingent payment debt
instruments will be more fully described in the applicable pricing supplement.
Purchasers of contingent payment debt instruments should carefully examine the
applicable pricing supplement and should consult their own tax advisor with
respect to such notes.
Certain of the notes:
o may be redeemable at the option of the issuing trust prior to their
stated maturity (a "call option"); and/or
o may be repayable at the option of the holder prior to their stated
maturity (a "put option"). Notes containing such features may be
subject to rules that differ from the general rules discussed above.
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Investors intending to purchase notes with such features should consult
their own tax advisors, since the OID consequences will depend, in part, on the
particular terms and features of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, OID, de minimis OID, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium) that accrues on a debt
instrument by using the constant yield method applicable to OID, subject to
certain limitations and exceptions.
Short-Term Notes
Notes that have a fixed maturity of one year or less ("short-term notes")
will be treated as having been issued with OID. In general, an individual or
other cash method U.S. Holder is not required to accrue such OID unless the U.S.
Holder elects to do so. If such an election is not made, any gain recognized by
the U.S. Holder on the sale, exchange or maturity of the short-term note will be
ordinary income to the extent of the OID accrued on a straight-line basis, or
upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
short-term note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue OID on a short-term note on a
straight-line basis unless an election is made to accrue the OID under a
constant yield method (based on daily compounding).
Market Discount
If a U.S. Holder purchases a note, other than a discount note, for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or, in the case of a
discount note, for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased such
note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a discount note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a note as ordinary
income to the extent of the lesser of:
o the amount of such payment or realized gain; and
o the market discount which has not previously been included in income
and is treated as having accrued on such note at the time of such
payment or disposition.
Market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the note or
certain earlier dispositions, because a current deduction of such holder's "net
direct interest expense" is only allowed to the extent the interest expense
exceeds an allocable portion of market discount. Net direct interest expense is
the excess of interest paid or accrued to purchase or carry the market discount
note over the interest (including OID) includible in the purchaser's gross
income. A U.S. Holder may elect to include market discount in income currently
as it accrues (on either a ratable or semiannual compounding basis), in which
case the rules described above regarding the treatment as ordinary income of
gain upon the disposition of the note, the receipt of certain cash payments and
the deferral of interest deductions will not apply. Generally, such currently
included market discount is treated as ordinary interest for United States
Federal income tax purposes. Such an election will apply to all debt instruments
acquired by the U.S. Holder on or after the first day of the first taxable year
to which such election applies and may be revoked only with the consent of the
IRS.
Premium
If a U.S. Holder purchases a note for an amount that is greater than the
sum of all amounts payable on the note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium
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using a constant yield method over the remaining term of the note and may offset
interest otherwise required to be included in gross income in respect of the
note during any taxable year by the amortized amount of such excess for the
taxable year. However, if the note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the note. Any
election to amortize bond premium applies to all taxable debt instruments held
or acquired by the U.S. Holder on or after the first day of the first taxable
year to which such election applies and may be revoked only with the consent of
the IRS.
Disposition of a Note
Except as discussed above, upon the sale, exchange, redemption (including a
redemption in connection with a tax event), retirement or other disposition of a
note, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange, retirement (other
than amounts representing accrued and unpaid interest) or other disposition and
such U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note generally will equal such U.S. Holder's initial investment in
the note increased by any OID included in income (and accrued market discount,
if any, if the U.S. Holder has included such market discount in income) and
decreased by the amount of any payments, other than qualified stated interest
payments, received and amortizable bond premium taken into account with respect
to such note. Such gain or loss generally will be long-term capital gain or loss
if the note were held for more than one year. Non-corporate taxpayers are
subject to reduced maximum rates on long-term capital gains and are generally
subject to tax at ordinary income rates on short-term capital gains. The
deductibility of capital losses is subject to certain limitations. Prospective
investors should consult their own tax advisors concerning these tax law
provisions.
Notes Denominated or on which Interest is Payable in a Foreign Currency
The following discussion generally describes special rules that apply, in
addition to the rules described above, to notes that are denominated in, or
provide for payments determined by reference to, a currency other than the
United States dollar (referred to as "foreign currency notes"). This discussion
does not, however, describe the tax considerations relating to the purchase,
ownership or disposition of a foreign currency note that is a contingent payment
debt instrument. A general summary of certain federal income tax considerations
relating thereto will be included in the relevant pricing supplement.
Payments of Interest on a Foreign Currency Note
Cash Method
A U.S. Holder who uses the cash method of accounting for United States
Federal income tax purposes and who receives a payment of interest on a foreign
currency note (other than OID or market discount) will be required to include in
income the U.S. dollar value of the foreign currency payment (determined on the
date such payment is received) regardless of whether the payment is in fact
converted to U.S. dollars at that time, and such U.S. dollar value will be the
U.S. Holder's tax basis in such foreign currency.
Accrual Method
A U.S. Holder who uses the accrual method of accounting for United States
Federal income tax purposes, or who otherwise is required to accrue interest
prior to receipt, will be required to include in income the U.S. dollar value of
the amount of interest income (including OID or market discount and reduced by
amortizable bond premium to the extent applicable) that has accrued and is
otherwise required to be taken into account with respect to a foreign currency
note during an accrual period. The U.S. dollar value of such accrued income will
be determined by translating such income at the average rate of exchange for the
accrual period or, with respect to an accrual period that spans two taxable
years, at the average rate for the partial period within the taxable year. A
U.S. Holder may elect, however, to translate such accrued interest income using
the rate of exchange on the last day of the accrual period or, with respect to
an accrual period that spans two taxable years, using the rate of exchange on
the last day of the taxable year. If the last day of an accrual period is within
five business days of the date of receipt of the accrued interest, a U.S. Holder
may translate such interest using the rate of exchange on the date of receipt.
The above election will apply to other debt obligations held by the U.S. Holder
and may not be changed without the consent of the IRS. A U.S. Holder should
consult a tax advisor before making the above election. A U.S. Holder will
recognize exchange gain or loss (which will be treated as ordinary income or
loss) with respect to accrued interest income on the date such income is
received. The amount of ordinary income or loss recognized will equal the
difference, if any, between the U.S. dollar value of the foreign currency
payment received (determined on the date such payment is
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received) in respect of such accrual period and the U.S. dollar value of
interest income that has accrued during such accrual period (as determined
above).
Purchase, Sale and Retirement of Foreign Currency Notes
A U.S. Holder who purchases a foreign currency note with previously owned
foreign currency will recognize ordinary income or loss in an amount equal to
the difference, if any, between such U.S. Holder's tax basis in the foreign
currency and the U.S. dollar fair market value of the foreign currency used to
purchase the foreign currency note, determined on the date of purchase.
Except as discussed above with respect to short-term notes, upon the sale,
exchange, redemption (including a redemption in connection with a tax event) or
retirement of a foreign currency note, a U.S. Holder will recognize taxable gain
or loss equal to the difference between the amount realized on the sale,
exchange or retirement and such U.S. Holder's adjusted tax basis in the foreign
currency note. Such gain or loss generally will be capital gain or loss (except
to the extent of any accrued market discount not previously included in the U.S.
Holder's income) and will be long-term capital gain or loss if at the time of
sale, exchange or retirement the foreign currency note has been held by such
U.S. Holder for more than one year. To the extent the gain realized represents
accrued but unpaid interest, however, such amounts must be taken into account as
interest income, with exchange gain or loss computed as described in "Payments
of Interest in a Foreign Currency" above. If a U.S. Holder receives foreign
currency on such a sale, exchange or retirement the amount realized will be
based on the U.S. dollar value of the foreign currency on the date the payment
is received or the foreign currency note is disposed of (or deemed disposed of
as a result of a material change in the terms of the foreign currency note). In
the case of a foreign currency note that is denominated in foreign currency and
is traded on an established securities market, a cash basis U.S. Holder (or,
upon election, an accrual basis U.S. Holder) will determine the U.S. dollar
value of the amount realized by translating the foreign currency payment at the
spot rate of exchange on the settlement date of the sale. A U.S. Holder's
adjusted tax basis in a foreign currency note will equal the cost of the foreign
currency note to such U.S. Holder, increased by the amounts of any market
discount or OID previously included in income by the U.S. Holder with respect to
such foreign currency note and reduced by any amortized acquisition or other
premium and any principal payments received by the U.S. Holder. A U.S. Holder's
tax basis in a foreign currency note, and the amount of any subsequent
adjustments to such U.S. Holder's tax basis, will be the U.S. dollar value of
the foreign currency amount paid for such foreign currency note, or of the
foreign currency amount of the adjustment, determined on the date of such
purchase or adjustment.
Gain or loss realized upon the sale, exchange or retirement of a foreign
currency note that is attributable to fluctuations in currency exchange rates
will be ordinary income or loss which will not be treated as interest income or
expense. Gain or loss attributable to fluctuations in exchange rates will equal
the difference between the U.S. dollar value of the foreign currency principal
amount of the foreign currency note, determined on the date such payment is
received or the foreign currency note is disposed of, and the U.S. dollar value
of the foreign currency principal amount of the foreign currency note,
determined on the date the U.S. Holder acquired the foreign currency note. Such
foreign currency gain or loss will be recognized only to the extent of the total
gain or loss realized by the U.S. Holder on the sale, exchange or retirement of
the foreign currency note.
Original Issue Discount
In the case of a discount note or short-term note:
o OID is determined in units of the foreign currency;
o accrued OID is translated into U.S. dollars as described in "Payments
of Interest in a Foreign Currency--Accrual Method" above; and
o the amount of foreign currency gain or loss on the accrued OID is
determined by comparing the amount of income received attributable to
the discount (either upon payment, maturity or an earlier
disposition), as translated into U.S. dollars at the rate of exchange
on the date of such receipt, with the amount of OID accrued, as
translated above.
Premium and Market Discount
In the case of a foreign currency note with market discount:
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o market discount is determined in units of the foreign currency;
o accrued market discount taken into account upon the receipt of any
partial principal payment or upon the sale, exchange, retirement or
other disposition of the foreign currency note (other than accrued
market discount required to be taken into account currently) is
translated into U.S. dollars at the exchange rate on such disposition
date (and no part of such accrued market discount is treated as
exchange gain or loss); and
o accrued market discount currently includible in income by a U.S.
Holder for any accrual period is translated into U.S. dollars on the
basis of the average exchange rate in effect during such accrual
period, and the exchange gain or loss is determined upon the receipt
of any partial principal payment or upon the sale, exchange,
retirement or other disposition of the foreign currency note in the
manner described in "Payments of Interest in a Foreign
Currency--Accrual Method" above with respect to computation of
exchange gain or loss on accrued interest.
With respect to a foreign currency note acquired with amortizable bond
premium, such premium is determined in the relevant foreign currency and reduces
interest income in units of the foreign currency. Although not entirely clear, a
U.S. Holder should recognize exchange gain or loss equal to the difference
between the U.S. dollar value of the bond premium amortized with respect to a
period, determined on the date the interest attributable to such period is
received, and the U.S. dollar value of the bond premium determined on the date
of the acquisition of the foreign currency note.
Exchange of Foreign Currencies
A U.S. Holder will have a tax basis in any foreign currency received as
interest or on the sale, exchange or retirement of a foreign currency note equal
to the U.S. dollar value of such foreign currency, determined at the time the
interest is received or at the time of the sale, exchange or retirement. Any
gain or loss realized by a U.S. Holder on a sale or other disposition of foreign
currency (including its exchange for U.S. dollars or its use to purchase foreign
currency notes) will be ordinary income or loss.
Non-U.S. Holders
Payments of interest (including OID, if any) on a note received by a
non-U.S. Holder that does not hold its notes in connection with the conduct of a
trade or business in the United States, will generally not be subject to United
States Federal withholding tax pursuant to the "Portfolio Interest Exemption"
unless:
o the non-U.S. Holder is a direct or indirect 10% or greater shareholder
of Allstate Life;
o the non-U.S. Holder is a controlled foreign corporation related to
Allstate Life;
o the non-U.S. Holder is a bank receiving interest described in section
881(c)(3)(A) of the Code; or
o interest on the note is contingent interest described in section
871(h)(4) of the Code.
To qualify for the Portfolio Interest Exemption from United States Federal
withholding tax, the last United States payor in the chain of payment prior to
payment to a non-U.S. Holder (the "withholding agent") must have received in the
year in which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that:
o is signed by the beneficial owner of the note under penalties of
perjury;
o certifies that such owner is not a U.S. Holder; and
o provides the name and address of the beneficial owner.
The statement may be made on an IRS Form W-8BEN or a substantially similar
form, and the beneficial owner must inform the withholding agent of any change
in the information on the statement within 30 days of such change. If a note is
held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the withholding agent. However, in such a case, the signed statement generally
must be
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accompanied by a copy of the IRS Form W-8BEN or the substitute form provided by
the beneficial owner to the organization or institution.
If a non-U.S. Holder cannot satisfy the requirements for eligibility for
the Portfolio Interest Exemption, interest earned by such non-U.S. Holder will
be subject to United States Federal withholding tax at a 30% rate unless the
non-U.S. Holder provides the withholding agent with a properly executed:
o IRS Form W-8BEN claiming an exemption from or reduction in withholding
under the benefit of a United States income tax treaty; or
o IRS Form W-8ECI stating that interest paid on the note is not subject
to withholding tax because it is effectively connected with the
non-U.S. Holder's conduct of a trade or business in the United States.
Notwithstanding the provision of IRS Form W-8ECI, a non-U.S. Holder that
holds its notes in connection with its conduct of a trade or business in the
United States will be taxed on its notes in the same manner as a U.S. Holder,
and, if such non-U.S. Holder is a foreign corporation, it may also be subject to
a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon the sale,
exchange, redemption (including a redemption in connection with a tax event),
retirement or other disposition of a note, provided:
o the gain is not effectively connected with the conduct of a trade or
business in the United States by the non-U.S. Holder; and
o the non-U.S. Holder is not an individual who is present in the United
States for 183 days or more during the taxable year.
Certain other exceptions may be applicable, and a non-U.S. Holder should
consult its tax advisor in this regard.
The notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of Allstate
Life or, at the time of such individual's death, payments in respect of the
notes would have been effectively connected with the conduct by such individual
of a trade or business in the United States. If any portion of the interest
payable on the notes at the time of the individual's death was contingent
interest, then an appropriate portion of the value of the notes would be
includible in the estate of a non-U.S. Holder.
Backup Withholding and Information Reporting
Backup withholding of United States Federal income tax at the applicable
backup withholding rate may apply to payments made in respect of the notes to
registered owners who are not "exempt recipients" and who fail to provide
certain identifying information (such as the registered owner's taxpayer
identification number) in the required manner. Generally, individuals are not
exempt recipients, whereas corporations and certain other entities generally are
exempt recipients. Payments made in respect of the notes to a U.S. Holder must
be reported to the IRS, unless the U.S. Holder is an exempt recipient or
establishes an exemption. Compliance with the identification procedures
described in the preceding section would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold at the applicable backup withholding rate, unless either the
broker determines that the seller is a corporation or other exempt recipient or
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either the broker determines that the seller is
an exempt recipient or the seller certifies its non-U.S. status (and certain
other conditions are met). Certification of the registered owner's non-U.S.
status would be made normally on an IRS Form W-8BEN under penalties of perjury,
although in certain cases it may be possible to submit other documentary
evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
S-58
Opinion Regarding Tax Matters
Prior to the issuance of any notes, Allstate Life will file as an exhibit
to a Current Report on Form 8-K an opinion of legal counsel as described above
regarding the tax treatment of such notes.
S-59
PLAN OF DISTRIBUTION
The notes of a series will be offered to or through one or more of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, A.G. Edwards & Sons, Inc., Banc of
America Securities LLC, Barclays Capital Inc., Bear, Stearns & Co. Inc.,
Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank
Securities Inc., Goldman, Sachs & Co., Greenwich Capital Markets, Inc., J.P.
Morgan Securities Inc., Lehman Brothers Inc., Morgan Stanley & Co. Incorporated,
UBS Securities LLC and Wachovia Capital Markets, LLC (including any other party
that becomes an agent pursuant to the terms of the distribution agreement,
collectively, the "Agents") pursuant to a terms agreement among Global Funding,
the issuing trust and each Agent named therein (each, a "terms agreement") and
the distribution agreement among Global Funding and the Agents named therein,
dated as of -, 2007 (the "distribution agreement"). Each terms agreement will
incorporate by reference the terms of the distribution agreement. The Agents,
individually or in a syndicate, may purchase notes, as principal, from a trust
for resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the applicable
Agent or, if so specified in the applicable pricing supplement, for resale at a
fixed offering price. However, a trust may agree with an Agent for that Agent to
utilize its reasonable efforts on an agency basis on its behalf to solicit
offers to purchase notes at 100% of the principal amount thereof, unless
otherwise specified in the applicable pricing supplement. Unless otherwise
specified in the applicable pricing supplement, each trust will pay a commission
to an Agent, ranging from .150% to .875% of the principal amount of each note,
depending upon its stated maturity, sold through that Agent as its agent. The
notes may be sold to United States and foreign institutional and other
investors.
Subject to the terms of the applicable terms agreement and the distribution
agreement, concurrently with any offering of a series of notes by a trust as
described in this prospectus supplement, other trusts may issue other notes
under this program or the Allstate Life(R) CoreNotes(R) program.
Each trust will use the net proceeds received from the issuance of the
related series of notes to purchase a funding note from Global Funding. Global
Funding will use the net proceeds received from the sale of such funding note to
purchase one or more funding agreements issued by Allstate Life. Global Funding
will immediately assign absolutely to, and deposit into, the issuing trust each
such funding agreement and the related funding note will be cancelled
immediately upon the assignment and deposit by Global Funding of such funding
agreement(s) to and into the issuing trust.
Unless otherwise specified in the applicable pricing supplement, any note
sold to an Agent as principal will be purchased by that Agent at a price equal
to 100% of the principal amount thereof less a percentage of the principal
amount equal to the commission applicable to an agency sale of a note of
identical maturity. An Agent may sell notes it has purchased from a trust as
principal to certain dealers less a concession equal to all or any portion of
the discount received in connection with that purchase. An Agent may allow, and
dealers may reallow, a discount to certain other dealers. After the initial
offering of notes, the offering price, the concession and the reallowance may be
changed.
The offer made hereby may be modified without notice, and each trust may
reject offers in whole or in part (whether placed directly by the issuing trust
or through an Agent). Each Agent will have the right, in its discretion
reasonably exercised, to reject in whole or in part any offer to purchase notes
received by it on an agency basis.
Unless otherwise specified in the applicable pricing supplement, you will
be required to pay the purchase price of your notes in immediately available
funds in the specified currency in The City of New York on the date of
settlement.
Upon issuance, the notes of a series will not have an established trading
market. There can be no assurance that a trading market for your notes will ever
develop or be maintained if developed. Unless otherwise specified in the
applicable pricing supplement, the notes will not be listed on any securities
exchange. The Agents may from time to time purchase and sell notes in the
secondary market, but the Agents are not obligated to do so, and there can be no
assurance that a secondary market for the notes will develop or that there will
be liquidity in the secondary market if one develops. From time to time, the
Agents may make a market in the notes, but the Agents are not obligated to do so
and may discontinue any market-making activity at any time.
In connection with an offering of notes purchased by one or more Agents as
principal on a fixed offering price basis, the applicable Agents will be
permitted to engage in certain transactions that stabilize the price of notes.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of notes. If those Agents create a short
position in notes (i.e., if they sell notes in an amount exceeding the amount
specified in the applicable pricing supplement), they may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of notes to be higher than it might be in the absence of these type of
purchases.
S-60
Neither Global Funding and the trusts nor any Agent make any representation
or prediction as to the direction or magnitude of any effect that the
transactions described in the immediately preceding paragraph may have on the
price of notes. In addition, neither Global Funding and the trusts nor any Agent
make any representation that the Agents will engage in any such transactions or
that such transactions, once commenced, will not be discontinued without notice.
The Agents participating in the distribution of notes will be
"underwriters," with respect to the notes being distributed by them and the
funding agreements being purchased by the issuing trust, and any discounts or
commissions received by them on the sale or resale of notes may be deemed to be
underwriting discounts and commissions under the Securities Act. The Agents may
be entitled under agreements entered into with a trust, Global Funding and
Allstate Life to indemnification against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that the Agents may be required to make in respect of such liabilities.
Global Funding is a statutory issuer of the notes and the funding notes
under the Securities Act, and Allstate Life is the issuer of the funding
agreements under the Securities Act. In addition, under the Securities Act, each
trust is a statutory underwriter of each funding agreement and each funding note
purchased with the proceeds from the issuance of such trust's notes.
With respect to any series of notes as to which one or more affiliates of
The Bank of New York Trust Company, N.A. will serve as an Agent, the relevant
trust will appoint an eligible entity other than The Bank of New York Trust
Company, N.A. and unaffiliated with any other Agent participating in the
offering of such series of Notes to serve as indenture trustee and as funding
note indenture trustee.
In the ordinary course of its business, the Agents and their affiliates
have engaged, and may in the future engage, in investment and commercial banking
transactions with Allstate Life and certain of its affiliates.
S-61
ANNEX A
FORM OF PRICING SUPPLEMENT
Filed pursuant to Rule 424(b)[ ]
Registration Statement No. 333-143541
Pricing Supplement No. [ ] Dated [ ]
(To Prospectus dated [ ], and
Prospectus Supplement dated [ ])
CUSIP: [ ]
Allstate Life Global Funding
Secured Medium Term Notes
Issued Through
Allstate Life Global Funding Trust [ ]
The description in this pricing supplement of the particular terms of the
Secured Medium Term Notes offered hereby (the "Notes"), the Funding Agreement(s)
(specified below) issued by Allstate Life Insurance Company ("Allstate Life")
and deposited into Allstate Life Global Funding Trust [ ] (the "Trust") by
Allstate Life Global Funding ("Global Funding") and the Funding Note (specified
below) issued by Global Funding to the Trust supplements the description of the
general terms and provisions of the notes, the funding agreements and the
funding notes set forth in the accompanying prospectus and prospectus
supplement, to which reference is hereby made.
The Notes will represent the obligations of the issuing entity only and
will not represent the obligations of, or interest in, any other person or
entity, including Global Funding, Allstate Life or any of their respective
affiliates. The Notes will constitute asset-backed securities within the meaning
of Regulation AB under the Securities Act of 1933, as amended.
THE NOTES
Principal Amount: [ ] Agent(s) Discount: [ ]
Issue Price: [ ] Original Issue Date: [ ]
Net Proceeds to the Trust: [ ] Stated Maturity Date: [ ]
Specified Currency: [ ] Depositary: [The Depository Trust Company]
Interest Payment Dates: [ ] Interest Reset Dates: [ ]
Initial Interest Payment Date: [ ] Initial Interest Reset Date: [ ]
Regular Record Date: [15 calendar days prior to the Interest Payment Date]
[Modified] Following Business Day Convention: [ ]
Business Day: [ ]
Fiscal Year of Trust (not applicable unless different than as specified in the
prospectus and prospectus supplement): [ ]
Type of Interest Rate: [[ ] Fixed Rate] [[ ] Floating Rate]
Fixed Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Interest Rate: [ ]
Floating Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Regular Floating Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Inverse Floating Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Fixed Interest Rate: [ ]
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Floating Rate/Fixed Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Fixed Interest Rate: [ ]
Fixed Rate Commencement Date: [ ]
Initial Interest Rate, if any: [ ]
Interest Rate Basis(es). Check all that apply:
[ ] CD Rate [ ] Federal Funds Rate
[ ] CMT Rate [ ] LIBOR
[ ] Commercial Paper Rate [ ] Prime Rate
[ ] Constant Maturity Swap Rate [ ] Treasury Rate
[ ] Eleventh District Cost of Funds Rate
[ ] EURIBOR
[If LIBOR:]
LIBOR Reuters Page: [ ]
LIBOR Currency: [ ]
[If CMT Rate:]
Designated CMT Reuters Page: [ ]
[If CMT Reuters Page FEDCMT:] [[ ] Weekly Average]
[[ ] Monthly Average]
Designated CMT Maturity Index: [ ]
Index Maturity: [ ]
Spread (+/-): [ ]
Spread Multiplier: [ ]
Interest Reset Date(s): [ ]
Interest Determination Date(s): [ ]
Maximum Interest Rate, if any: [ ]
A-2
Minimum Interest Rate, if any: [ ]
Calculation Agent, if any: [The Bank of New York Trust Company, N.A.]
Exchange Rate Agent, if any: [ ]
Computation of Interest (not applicable unless different than as specified in
the prospectus and prospectus supplement): [ ]
Day Count Convention (not applicable unless different than as specified in the
prospectus and prospectus supplement): [ ]
Amortizing Notes: [[ ] Yes] [[ ] No]. If, Yes,
Amortizing Schedule: [ ]
Additional/Other Terms: [ ]
Discount Notes: [[ ] Yes] [[ ] No]. If, Yes,
Total Amount of Discount: [ ]
Initial Accrual Period of Discount: [ ]
Additional/Other Terms: [ ]
Redemption Provisions: [[ ] Yes] [[ ] No]. If, Yes,
Initial Redemption Date: [ ]
Initial Redemption Percentage: [ ]
Annual Redemption Percentage Reduction (if any):
[ ]
Redemption: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms: [ ]
Repayment: [[ ] Yes] [[ ] No]. If, Yes,
Repayment Date(s): [ ]
Repayment Price: [ ]
Repayment: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms: [ ]
Sinking Fund (not applicable unless specified): [ ]
Additional Amounts to be Paid for Withholding Tax (not applicable unless
specified):
Securities Exchange Listing: [[ ] Yes] [[ ] No]. If Yes, Name of Exchange:
Authorized Denominations: [$1,000]
Ratings:
The Notes issued under the Program are rated "[ ]" by Standard & Poor's, a division of The McGraw Hill Companies, Inc.
("S&P"). It is anticipated that Moody's Investors Service, Inc. ("Moody's") will rate the Notes "[ ]" on the Original
Issue Date.
Agent(s) Purchasing Notes as Principal: [[ ] Yes] [[ ] No]. If Yes,
Agent(s) Principal Amount
[ ] [ ]
Total: [ ]
A-3
Agent(s) Acting as Agent: [[ ] Yes] [[ ] No]. If Yes,
Agent(s) Principal Amount
[ ] [ ]
Total: [ ]
Additional/Other Terms: [ ]
Special Tax Considerations: [ ]
THE FUNDING AGREEMENT(S)
Funding Agreement Issuer: Allstate Life Insurance Company
Funding Agreement No.: [ ]
Deposit Amount: [ ]
Issue Price: [ ]
Net Deposit Amount: [ ]
Effective Date: [ ]
Specified Currency: [ ]
Interest Payment Dates: [ ]
Initial Interest Payment Date: [ ]
Interest Reset Date: [ ]
Initial Interest Reset Date: [ ]
Funding Agreement [Modified] Following Business Day Convention: [ ]
Funding Agreement Business Day: [ ]
Type of Interest Rate: [[ ] Fixed Rate] [[ ] Floating Rate]
Fixed Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Interest Rate: [ ]
Floating Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Floating Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Inverse Floating Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Fixed Interest Rate: [ ]
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Floating Rate/Fixed Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Fixed Interest Rate: [ ]
Fixed Rate Commencement Date: [ ]
Initial Interest Rate, if any: [ ]
A-4
Initial Interest Reset Date: [ ]
Interest Rate Basis(es). Check all that apply:
[ ] CD Rate [ ] Federal Funds Rate
[ ] CMT Rate [ ] LIBOR
[ ] Commercial Paper Rate [ ] Prime Rate
[ ] Constant Maturity Swap Rate [ ] Treasury Rate
[ ] Eleventh District Cost of Funds Rate
[ ] EURIBOR
[If LIBOR:]
LIBOR Reuters Page: [ ]
LIBOR Currency: [ ]
[If CMT Rate:]
Designated CMT Reuters Page: [ ]
[If CMT Reuters Page FEDCMT:] [[ ] Weekly Average]
[[ ] Monthly Average]
Designated CMT Maturity Index: [ ]
Index Maturity: [ ]
Spread (+/-): [ ]
Spread Multiplier: [ ]
Interest Reset Date(s): [ ]
Interest Determination Date(s): [ ]
Maximum Interest Rate, if any: [ ]
Minimum Interest Rate, if any: [ ]
Calculation of Interest: [ ]
Day Count Convention: [ ]
Amortizing Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Amortizing Schedule: [ ]
Additional/Other Terms: [ ]
A-5
Discount Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Total Amount of Discount: [ ]
Initial Accrual Period of Discount: [ ]
Additional/Other Terms: [ ]
Redemption Provisions: [[ ] Yes] [[ ] No]. If Yes,
Initial Redemption Date: [ ]
Initial Redemption Percentage: [ ]
Annual Redemption Percentage Reduction
(if any): [ ]
Redemption: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms: [ ]
Repayment: [[ ] Yes] [[ ] No]. If Yes,
Repayment Date(s): [ ]
Repayment Price: [ ]
Repayment: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms: [ ]
Sinking Fund (not applicable unless specified): [ ]
Additional Amounts to be Paid For Withholding Tax (not applicable
unless specified): [ ]
Ratings:
The Funding Agreements issued under the Program are rated AA by S&P. It is
anticipated that the Funding Agreement(s) will be rated Aa2 by Moody's on the
Original Issue Date.
Additional/Other Terms, if any: [ ]
Special Tax Considerations: [ ]
THE FUNDING NOTE
Funding Note Issuer: Allstate Life Global Funding
Funding Note No.: [ ]
Principal Amount: [ ]
The Funding Note will otherwise have payment and other terms substantially
similar to the Funding Agreement(s) and the Notes, except that the terms of the
Funding Note will provide that it will be cancelled immediately upon the sale
of, and deposit into, the Trust by Global Funding of the Funding Agreement(s).
A-6
===============================================================================
$8,400,000,000
Allstate Life Global Funding
Depositor
Secured Medium Term Notes
Due Between Nine Months and 30 Years From the Date of Issue
Issued Through
Allstate Life Global Funding Trusts
Secured by
Funding Agreements Issued by
Allstate Life Insurance Company
Sponsor
------------------
PROSPECTUS SUPPLEMENT
------------------
Merrill Lynch & Co.
A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital
Bear, Stearns & Co. Inc.
Citigroup
Credit Suisse
Deutsche Bank Securities
Goldman, Sachs & Co.
JPMorgan
Lehman Brothers
Morgan Stanley
RBS Greenwich Capital
UBS Investment Bank
Wachovia Securities
-, 2007
===============================================================================
Subject to Completion
Preliminary Prospectus Supplement dated June 26, 2007
PROSPECTUS SUPPLEMENT
(To prospectus dated -, 2007)
$8,400,000,000
Allstate Life Global Funding
Depositor
Allstate Life(R) CoreNotes(R)
Due Between Nine Months and 30 Years From the Date of Issue
Issued Through Allstate Life Global Funding Trusts
Secured by
Funding Agreements Issued by
Allstate Life Insurance Company
Sponsor
------------------
Allstate Life Global Funding (the "depositor" or "Global Funding") is a
statutory trust formed under the laws of the State of Delaware. Its primary
purpose is to facilitate the programs for the issuance of one or more series of
secured medium term notes, including the Allstate Life(R) CoreNotes(R) (the
"notes"). Each series of notes will be issued by a newly created separate and
distinct Delaware statutory trust (each, a "trust"). The notes of each series
will be secured by one or more funding agreements (each, a "funding agreement")
issued by Allstate Life Insurance Company ("Allstate Life") and assigned
absolutely to, and deposited into, the issuing trust by Global Funding. Global
Funding will be the sole beneficial owner of each trust that is formed and the
depositor of the funding agreements into the issuing trusts. In connection with
each offering of notes, Allstate Life Global Funding will issue the applicable
funding note (each, a "funding note") as more fully described herein. Allstate
Life is the sponsor of the programs.
The notes of each series will represent the obligations of the issuing
entity only and will not represent the obligations of, or interest in, any other
person or entity, including Global Funding, Allstate Life or any of their
respective affiliates. The notes of each series will constitute "asset-backed
securities" within the meaning of Regulation AB under the Securities Act of
1933, as amended.
The specific terms of each series of notes, and the related funding note
and funding agreement(s), will be set forth in a separate prospectus supplement
to this prospectus supplement and the accompanying prospectus (a "pricing
supplement"), which will be prepared in connection with the issuance of such
series of notes, including the information related to the interest rate or
specified rate of return thereof, the distribution frequency and the first
expected distribution date. The form of pricing supplement, which includes
bracketed alternatives that may form part of the structure of an offering of
notes pursuant to the program described in this prospectus supplement and the
accompanying prospectus, is included in this prospectus supplement as Annex B.
You should read this prospectus supplement, the accompanying prospectus and the
applicable pricing supplement carefully before you invest.
The notes of each series:
o will be issued in only one class;
o will have a stated maturity of nine months to 30 years from the date
of issue;
o will have redemption and/or repayment provisions, if applicable,
whether mandatory or at the option of the issuing trust or the holders
of such notes;
o will provide for payments in U.S. dollars;
o will, unless otherwise specified in the applicable pricing supplement,
have a minimum denomination of $1,000 and integral multiples of $1,000
in excess thereof;
o will be in book-entry form;
o will bear interest at fixed or floating rates; unless otherwise
specified in the applicable pricing supplement, each trust will pay
interest on the relevant series of notes on a monthly, quarterly,
semiannual or annual basis;
o will be secured by the right, title and interest of the issuing trust
in and to (1) the funding agreement(s) held by that trust, (2) all
proceeds of such funding agreement(s) and (3) all books and records
pertaining to such funding agreement(s); and
o may be sold in the United States to retail and other investors.
The funding note and funding agreement(s) issued in connection with the
offering of a series of notes will represent the respective obligations of
Global Funding and Allstate Life only and will not represent the obligations of
or the interest in any person other than the respective issuing entity.
Each class of securities offered may have an aggregate principal amount of
up to $8,400,000,000.
Investing in these securities involves risks that are described in the
"Risk Factors" section beginning on page S-13.
------------------
Neither the Securities and Exchange Commission, any state securities
commission nor any state insurance commission has approved or disapproved of
these securities or determined if this prospectus supplement, the accompanying
prospectus or any pricing supplement is truthful or complete. Any representation
to the contrary is a criminal offense.
------------------
Merrill Lynch & Co.
------------------
The date of this prospectus supplement is -, 2007.
"Allstate Life(R)" is a registered service mark of Allstate Insurance Company.
"CoreNotes(R)" is a registered service mark of Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
Prospectus Supplement
Forward-Looking Statements..............................................................................................S-1
About this Prospectus Supplement and the Pricing Supplements............................................................S-2
Summary.................................................................................................................S-3
Risk Factors...........................................................................................................S-13
Allstate Life Global Funding Trusts....................................................................................S-19
Allstate Life Global Funding...........................................................................................S-19
Allstate Life Insurance Company........................................................................................S-20
Description of the Notes...............................................................................................S-21
Description of the Funding Agreements..................................................................................S-42
United States Federal Income Tax Considerations........................................................................S-43
Plan of Distribution...................................................................................................S-50
Annex A: Repayment Election Form......................................................................................A-1
Annex B: Form of Pricing Supplement...................................................................................B-1
Prospectus
Forward-Looking Statements................................................................................................1
About this Prospectus.....................................................................................................2
Available Information.....................................................................................................3
Incorporation of Documents by Reference...................................................................................3
Description of Allstate Life Global Funding and the Trusts................................................................5
Description of Allstate Life Insurance Company...........................................................................16
Computation of Ratio of Earnings to Fixed Charges........................................................................17
Use of Proceeds..........................................................................................................17
Description of the Notes.................................................................................................18
Description of the Indentures............................................................................................19
Description of the Funding Notes.........................................................................................30
Description of the Funding Agreements....................................................................................31
Description of the Support and Expenses Agreements.......................................................................37
Description of the Administrative Services Agreements....................................................................41
ERISA Considerations.....................................................................................................42
Plan of Distribution.....................................................................................................45
Legal Opinions...........................................................................................................46
Experts..................................................................................................................46
------------------
Each trust may sell its notes to the Purchasing Agent referred to below as
principal for resale at a fixed offering price specified in the applicable
pricing supplement or at varying prices. Each trust may also explicitly agree
with the Purchasing Agent that it will use its reasonable efforts as agent on
behalf of the issuing trust to solicit offers to purchase notes of the
applicable series from that trust at 100% of the principal amount thereof,
unless otherwise specified in the applicable pricing supplement. Unless
otherwise specified in the applicable pricing supplement, any note sold to the
Purchasing Agent as principal will be purchased by the Purchasing Agent at a
price equal to 100% of the principal amount thereof less a percentage of the
principal amount equal to the commission applicable to an agency sale of a note
of identical maturity. Unless otherwise specified in the applicable pricing
supplement, each trust will pay a commission to the Purchasing Agent, ranging
from .125% to 2.50% of the principal amount of each applicable note, depending
upon its stated maturity, for each note purchased from the issuing trust by the
Purchasing Agent as its agent.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Neither of the registrants nor the Purchasing Agent has
authorized anyone to provide you with different or additional information. If
anyone provides you with different or additional information, you should not
rely on it. Neither of the registrants nor the Purchasing Agent is making an
offer to sell notes in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information contained in this
prospectus supplement, the accompanying prospectus or the applicable pricing
supplement is accurate as of any date other than the date of such document.
Updated information will be provided in the future as explained under
"Incorporation of Documents by Reference" in the accompanying prospectus.
FORWARD-LOOKING STATEMENTS
Allstate Life
This prospectus supplement, the accompanying prospectus and each applicable
pricing supplement may include forward-looking statements of Allstate Life.
These forward-looking statements are not statements of historical fact but
rather reflect Allstate Life's current expectations, estimates and predictions
about future results and events. These statements may use words such as
"should," "likely," "target," "anticipate," "believe," "estimate," "expect,"
"intend," "predict," "project" and similar expressions as they relate to
Allstate Life or its management. When Allstate Life makes forward-looking
statements, Allstate Life is basing them on its management's beliefs and
assumptions, using information currently available to Allstate Life. These
forward-looking statements are subject to risks, uncertainties and assumptions,
including but not limited to, risks, uncertainties and assumptions discussed in
this prospectus supplement, the accompanying prospectus and in each applicable
pricing supplement. Factors that can cause or contribute to these differences
include those described under the heading "Risk Factors" in this prospectus
supplement. Allstate Life undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if
Allstate Life's underlying assumptions prove to be incorrect, actual results may
vary materially from what Allstate Life projected. Any forward-looking
statements of Allstate Life you read in this prospectus supplement, the
accompanying prospectus or any pricing supplement reflect Allstate Life's
current views with respect to future events and are subject to these and other
risks, uncertainties and assumptions relating to Allstate Life's operations,
results of operations, growth strategy and liquidity. All subsequent written and
oral forward-looking statements attributable to Allstate Life or individuals
acting on Allstate Life's behalf are expressly qualified in their entirety by
this section. You should specifically consider the factors identified in this
prospectus supplement, the accompanying prospectus and each applicable pricing
supplement which could cause actual results to differ before making an
investment decision.
Global Funding and the Trusts
This prospectus supplement, the accompanying prospectus and each applicable
pricing supplement may include forward-looking statements of Global Funding and
the trusts. These forward-looking statements are subject to risks, uncertainties
and assumptions, including but not limited to, risks, uncertainties and
assumptions discussed in this prospectus supplement, the accompanying prospectus
and in each applicable pricing supplement. Global Funding does not, and the
trusts will not, undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
You should specifically consider the factors identified in this prospectus
supplement, the accompanying prospectus and each applicable pricing supplement
before making an investment decision. The trusts are not entitled to the safe
harbors contained in Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to forward-looking statements of the
trusts in this prospectus supplement, the accompanying prospectus and each
applicable pricing supplement.
S-1
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
This document is a prospectus supplement and supplements a prospectus which
is part of a registration statement filed with the Securities and Exchange
Commission (the "SEC") by Allstate Life Global Funding and Allstate Life
Insurance Company (the "registrants"). This prospectus supplement provides you
with a general description of the notes. The trusts may sell notes in various
offerings up to an aggregate initial offering price of $8,400,000,000, less any
amount of notes previously issued by the trusts under this program or pursuant
to a separate prospectus supplement to the accompanying prospectus that relates
to the Allstate Life Global Funding secured medium term note program. References
in this prospectus supplement to "notes" are to the Allstate Life(R)
CoreNotes(R) offered by this prospectus supplement.
This prospectus supplement and the information incorporated by reference in
it may update, supplement or clarify the information in the accompanying
prospectus. The pricing supplement will contain the specific description of the
notes offered at the time and the terms on which the notes are offered. That
pricing supplement also may add, update, supplement or clarify information in
this prospectus supplement and the accompanying prospectus. You should carefully
review such additional, updated, supplemental or clarifying information
contained in the pricing supplement.
It is important for you to read and consider all of the information
contained in this prospectus supplement and the accompanying prospectus, as well
as in the applicable pricing supplement relating to the particular offering of
notes, in making your decision to invest in notes. You should also read and
consider the information in the documents referred to in "Incorporation of
Documents by Reference" in the accompanying prospectus.
In this prospectus supplement, references to the "depositor" and "Global
Funding" are to Allstate Life Global Funding. References to the "trusts" are to
Allstate Life Global Funding Trusts. References to an "issuing trust" are to a
trust with respect to the series of notes issued and sold to the public by that
trust. These references are not to Allstate Life Insurance Company. Unless
otherwise specified herein or the context otherwise requires, in this prospectus
supplement, references to "Allstate Life" are to Allstate Life Insurance
Company. References to "Purchasing Agent" are to Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
In this prospectus supplement, references to "United States dollars," "U.S.
dollars" or "$" are to lawful currency of the United States of America.
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SUMMARY
This section summarizes certain of the legal and financial terms of the
notes, funding notes and funding agreements that are described in more detail in
"Description of the Notes" and "Description of the Funding Agreements" beginning
on pages S-21 and S-42 of this prospectus supplement, "Description of the
Funding Notes" beginning on page 32 of the accompanying prospectus, and other
information described elsewhere in this prospectus supplement or in the
accompanying prospectus. You should read the more detailed information appearing
elsewhere in the accompanying prospectus, this prospectus supplement and the
applicable pricing supplement relating to the particular offering of notes.
The Trusts...................... Each series of notes will be issued by a newly created separate and distinct Delaware
statutory trust (each, a "trust") formed by Allstate Life Global Funding, as trust
beneficial owner, AMACAR Pacific Corp., as administrator (including any successor, the
"administrator"), and Wilmington Trust Company, as Delaware trustee (including any
successor, the "Delaware trustee"), pursuant to the filing of a certificate of trust and
the execution of a trust agreement. Each trust agreement pursuant to which various trusts
may be formed from time to time to issue notes is referred to in this prospectus
supplement as a "trust agreement." Allstate Life Global Funding will be the sole
beneficial owner of each trust that is formed.
Depositor; Issuer of Funding
Notes......................... Allstate Life Global Funding is a registrant as the depositor of the funding agreements
into the issuing trusts and the issuer of the funding notes.
Sponsor; Issuer of Funding
Agreements................... Allstate Life Insurance Company is the sponsor of the programs and a registrant as the
issuer of the funding agreements.
Allstate Life is not affiliated with any trust. None of Allstate Life or any of its
officers, directors, subsidiaries or affiliates owns any beneficial interest in any trust
nor has any of these persons or entities entered into any agreement with any trust other
than in furtherance of the issuance of notes from time to time as contemplated by this
prospectus supplement and the accompanying prospectus.
None of Allstate Life or any of its officers, directors, subsidiaries or affiliates is
affiliated with Global Funding, the Delaware trustee, the administrator, the indenture
trustee or the funding note indenture trustee.
Purposes of Global Funding and
Trusts....................... The primary purpose of Global Funding is to facilitate the programs for the issuance of
notes, including, in connection with each offering of notes, to issue the applicable
funding note. The primary purpose of each trust is to issue the related series of notes
to the public, which notes will be issued only on the original issue date of such notes
and will be secured by one or more funding agreements issued by Allstate Life, and
assigned absolutely to, and deposited into, the issuing trust by Global Funding. Each
trust will use the net proceeds received from issuing its series of notes to acquire one
or more funding agreements. Each trust will hold the collateral described below
pertaining to its series of notes to fund its obligations under that series of notes.
Each trust will pledge and collaterally assign the funding agreement(s) held in that
trust to the indenture trustee for the benefit of the holders of that trust's series of
notes and any other person for whose benefit the indenture trustee is or will be holding
the applicable collateral.
The notes of each series will represent the obligations of the issuing entity only and
will not represent the obligations of, or interest in, any other person or entity, including
Global Funding, Allstate Life, or any of their respective affiliates. Holders of notes of a
series may only look to the funding agreement(s) and any other collateral held in, or pledged
and collaterally assigned to the indenture trustee by, the issuing trust for payment on
their notes and not to the assets of Allstate Life or Global Funding, or the assets held in
any other trust.
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Delaware Trustee................ Unless otherwise specified in the applicable pricing supplement, Wilmington Trust
Company, a Delaware banking corporation, will be the sole trustee of Global Funding and
each trust. In this prospectus supplement and the accompanying prospectus, references to
"Delaware trustee" (i) with respect to any trust are to Wilmington Trust Company (or
another entity specified in the applicable trust agreement), as Delaware trustee of such
trust (including, in each case, any successor); and (ii) with respect to Global Funding
are to Wilmington Trust Company as Delaware trustee of Global Funding (including any
successor). The Delaware trustee will not be obligated in any way to make payments under
or in respect of any notes, any funding notes or any funding agreements. The Delaware
trustee is not affiliated with Allstate Life or the indenture trustee.
Administrator................... Unless otherwise specified in the applicable pricing supplement, AMACAR Pacific Corp.
will be the administrator of Global Funding and each trust. In this prospectus supplement
and the accompanying prospectus, references to the "administrator" (i) with respect to
any trust are to AMACAR Pacific Corp. (or another entity specified in the applicable
trust agreement), as administrator of such trust (including, in each case, any
successor); and (ii) with respect to Global Funding are to AMACAR Pacific Corp. as
administrator of Global Funding (including any successor). The administrator will not be
obligated in any way to make any payments under or in respect of the notes, any funding
notes or any funding agreements. The administrator is not affiliated with Allstate Life
or the indenture trustee.
Indenture Trustee............... Each series of notes will be issued by the issuing trust pursuant to a separate indenture
(each, an "indenture") to be entered into among the issuing trust and The Bank of New York
Trust Company, N.A., (or another entity specified as indenture trustee in the
applicable indenture) in its capacity as indenture trustee (including any successor, the
"indenture trustee"). The indenture trustee will not be affiliated with the trusts, the
Delaware trustee, the administrator, Global Funding or Allstate Life.
Funding Note Indenture
Trustee....................... Each funding note will be issued by Global Funding pursuant to a separate funding note
indenture (each, a "funding note indenture") to be entered into among Global Funding and
the other parties specified therein, including The Bank of New York Trust Company, N.A.,
(or another entity specified as funding note indenture trustee in the
applicable funding note indenture) in its capacity as funding note indenture trustee
(including any successor, the "funding note indenture trustee"). The funding note
indenture trustee is not affiliated with the trusts, the Delaware trustee, the
administrator, Global Funding or Allstate Life.
Servicer........................ Unless otherwise provided in the pricing supplement for a series of notes, pursuant to
each indenture, The Bank of New York Trust Company, N.A. will perform the functions of
the servicer in respect of the programs.
Diagram of Parties.............. Below is a diagram showing the parties involved in the issuance of notes by each trust.
Funding Agreement(s)
Deposit of Funding Agreement(s)
--- into issuing trust. Funding note --- Security Interest in
| is simultaneously cancelled. | Funding Agreement(s)
| |
Funding | |
Agreement(s) | Funding Note |
- ------------------- ----------------- ---------------- --------------
|Allstate Life |---------------> |Allstate Life |------------------>| | ---------------- | Indenture |
|Insurance Company|<-------------- |Global Funding |<----------------- | Issuing Trust| | Trustee |
- ------------------- Note Proceeds ----------------- Note Proceeds ---------------- --------------
^ |
| |
Note
Proceeds Notes
| |
| v
----------------
| |
| Noteholders |
----------------
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Allstate Life Can Issue Its Own
Medium Term Notes and Funding
Agreements Directly to
Investors.................... Allstate Life is able to issue its own medium term notes directly to investors and does
issue funding agreements directly to qualified investors. However, by securing each
trust's notes with one or more of Allstate Life's funding agreements, such trust's notes
are secured by an asset that would have a higher priority in insolvency than unsecured
medium term notes of Allstate Life and, accordingly, may be entitled to receive a higher
investment rating than unsecured medium term notes of Allstate Life. In addition, funding
agreements are very difficult to transfer and have no active secondary market. By
securing each trust's notes with one or more of Allstate Life's funding agreements,
investors may be able to avail themselves of many of the benefits of Allstate Life's
funding agreements while benefiting from the liquidity afforded by each trust's medium
term notes.
Title Allstate Life(R) CoreNotes(R)
Purchasing Agent Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Allstate Life(R) CoreNotes(R)
Program...................... This prospectus supplement relates to one or more series of notes that one or Delaware
special purpose statutory trusts that may be formed from time to time may issue and sell
primarily to retail investors under this Allstate Life(R) CoreNotes(R) program.
Allstate Life(R) CoreNotes(R) will be offered from time to time to the public, with payment
of principal of, any premium and interest on,and any other amounts due and owing with
respect to, the Allstate Life(R) CoreNotes(R) to be secured by one or more applicable
funding agreements issued by Allstate Life and sold to, and deposited into, the issuing
trust by Global Funding.
Secured Medium Term Notes
Program...................... Included in the registration statement, of which this prospectus supplement is a part,
is another prospectus supplement (the "related prospectus supplement") relating to
series of notes that may be issued and sold primarily to institutional investors by one
or more newly established Delaware statutory trusts under the related secured medium term
notes program. The terms of the secured medium term notes are identical in all material
respects to the terms of the notes to be sold under this program, as described in this
prospectus supplement, except that the secured medium term notes:
o may be issued as amortizing notes;
o may be denominated in one or more foreign currencies;
o will not contain a survivor's option, permitting optional repayment of notes of
a series, subject to certain limitations, prior to maturity, if requested, following
the death of the beneficial owner of notes of that series; and
o may contain a provision providing for the redemption of the notes if Allstate Life is
required to pay additional amounts on the related funding agreements pursuant to the
applicable pricing supplement and Allstate Life exercises its right to redeem the
funding agreements.
Amount of the Notes............. Up to $8,400,000,000 of notes less any amount of notes previously issued under this
program, the related secured medium term note program pursuant to the related prospectus
supplement or otherwise under the accompanying prospectus.
Flow of Funds................... All funds deposited with the indenture trustee pursuant to an indenture in respect of
notes of a series, except when an event of default has occurred and is continuing under
the indenture, shall be held in trust in the applicable collection account and applied by
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the indenture trustee, in accordance with the provisions of the notes of such series and
the applicable indenture, to the payment through any paying agent, to the persons
entitled thereto, of the principal, premium, if any, interest and additional amounts, if
any, for whose payment such money has been deposited with or received by the indenture
trustee. If no event of default with respect to the notes of a series has occurred and
is continuing, the following priority of payments shall apply:
o First: to the payment of principal, any premium and interest, any additional
amounts, and any other amounts then due and owing on the notes
of such series, ratably, without preference or priority
of any kind, according to the aggregate amounts due and payable on such notes;
o Second: to the payment of any other obligations then due and owing with respect
to such series of notes, ratably, without preference or priority of any kind; and
o Third: to the payment of any remaining balance to the issuing trust for
distribution by the Delaware trustee in accordance with the provisions of
the applicable trust agreement.
Any funds collected by the indenture trustee following an event of default, and during the
continuance thereof, under the applicable indenture in respect of the notes of a series
shall be held in trust in the applicable collection account and be applied in the
following order at the date or dates fixed by the indenture trustee and, in case of the
distribution of such funds on account of principal, any premium and interest and any
other amounts due and owing, upon presentation of the global security or
certificates representing the notes of such series and the notation thereon of the
payment if only partially paid or upon the surrender thereof if fully paid:
o First: to the payment of costs and expenses, including reasonable compensation
to the indenture trustee and each predecessor indenture trustee and their respective
agents and attorneys and of all expenses and liabilities incurred, and all advances
made, by the indenture trustee and each predecessor indenture trustee except as those
adjudicated in a court of competent jurisdiction to be the result of any such
indenture trustee's negligence or bad faith, in an aggregate amount of no more than
$250,000 for all series of notes outstanding;
o Second: to the payment of principal, any premium and interest, any additional
amounts and any other amounts then due and owing on the notes of such series, ratably,
without preference or priority of any kind, according to the aggregate amounts due and
payable on such notes;
o Third: to the payment of any other obligations then due and owing with respect to such
series of notes, ratably, without preference or priority
of any kind; and
o Fourth: to the payment of any remaining balance to the issuing trust for distribution
by the Delaware trustee in accordance with the provisions of the applicable trust
agreement.
All funds and other property received by the Delaware trustee on behalf of the issuing
trust in respect of the applicable collateral will be deposited into the payment account of
such trust and will be distributed by such trust as follows:
o First: to the indenture trustee for the payment of all amounts then due and
unpaid upon the applicable series of notes and any other amounts due and
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payable, in accordance with the applicable indenture; and
o Second: upon the final redemption of the applicable series of notes and payment of
any amounts payable in respect thereof, any remaining funds and other property
deposited into the payment account shall be distributed to the Delaware trustee for
distribution as provided below.
In connection with the termination of any trust that is formed and the distribution of
all amounts from the applicable payment account in accordance with the priority
described above, the Delaware trustee will distribute any amounts received in accordance
with the second clause of the immediately preceding paragraph and any other remaining
assets of the trust in the following order of priority:
o First: to pay all expenses and other liabilities owed by the applicable trust;
and
o Second: any remaining funds and other property shall be paid to the trust
beneficial owner.
Terms of the Notes:
Status....................... o The notes of a series will represent the unconditional, direct, non-recourse and
unsubordinated obligations of the issuing entity and will rank equally among
themselves.
o Each series of notes may be accelerated in the payment of principal and outstanding
interest if an event of default under the notes of such series occurs. Upon the
occurrence of an event of default, the indenture trustee on behalf of
the holders of notes of such series may only proceed against the collateral held in the
issuing trust.
o The notes of each series are not intended to be insurance contracts, insurance policies
or funding agreements.
o The notes of each series will represent the obligations of the issuing entity only
and will not represent the obligations of, or interest in, any other person or entity,
including Global Funding, Allstate Life or any of their respective affiliates.
o The notes are not guaranteed by any person or entity.
o The notes will not benefit from any insurance guaranty fund coverage or any similar
protection.
Payment of Principal and Interest......
o Principal and interest payments, if any, on any series of notes will be made solely
from the proceeds of one or more funding agreements, and any other collateral,
securing such series of notes. Each series of notes may be interest
bearing or non-interest bearing.
o Each series of notes that bears interest may bear interest at either a fixed rate or
a floating rate, or a combination of fixed and floating rates, as specified in the
applicable pricing supplement.
o The principal amount of each note will be payable on its stated maturity date,
repayment date or redemption date, as specified in the applicable pricing supplement,
at the corporate trust office of the paying agent or any other place designated by the
issuing trust.
o Interest, if any, will be payable on the dates set forth in the applicable pricing
supplement.
Interest Rate................ o Each series of fixed rate notes will bear interest from its date of issue at the
rate stated in the applicable pricing supplement until the principal is
paid. Each series of floating rate notes will bear interest from the date
of issue until the principal is paid at a rate determined by reference to
an interest rate or interest rate formula, which may be adjusted by a
spread and/or spread multiplier (each as more fully described under
"Description of the Notes"). The pricing supplement for a series of
floating rate notes will designate one or more of the following base rates,
along with the index maturity for that base rate:
o the CD Rate,
o the CMT Rate,
S-7
o the Commercial Paper Rate,
o the Constant Maturity Swap Rate
o the Federal Funds Rate,
o LIBOR,
o the Prime Rate, or
o the Treasury Rate.
o Interest on each note will be payable either monthly, quarterly, semiannually or
annually on each interest payment date and at maturity or, if applicable, earlier
redemption or repayment, and will be computed on the basis of a 360-day year of twelve
30-day months, unless otherwise specified in the pricing supplement.
Principal.................... o The principal amount of each note will be payable on its stated maturity date
specified in the applicable pricing supplement, unless earlier redeemed or
repaid in accordance with its terms.
Redemption................... Unless otherwise specified in the applicable pricing supplement:
o the notes will not be redeemable prior to maturity; and
o the notes will not be subject to any sinking fund.
Maturities................... o Each series of notes will mature between nine months and 30 years from its date
of original issuance. Each series of notes will have the same maturity date
as the related funding agreement(s).
Survivor's Option............ A series of notes may contain a provision (which is referred to as the "survivor's
option") permitting optional repayment of notes of that series prior to maturity, if
requested, following the death of the beneficial owner of notes of that series, so long
as the notes were held by the beneficial owner or the estate of the beneficial owner for
a period beginning at least six months immediately prior to such death. Your notes may
not be repaid in this manner unless the pricing supplement for your series of notes
provides for the survivor's option. If the pricing supplement for your series of notes
provides for the survivor's option, the funding agreement securing your series of notes
will contain a provision which will allow the issuing trust to tender the funding
agreement in whole or in part to Allstate Life. An issuing trust's ability to tender
funding agreements related to its series of notes that contains a survivor's option,
however, will be subject to certain limitations set by Allstate Life. As a result, your
right to exercise the survivor's option is subject to limits set by Allstate Life with
respect to the relevant funding agreement. Allstate Life has the discretionary right to
limit the aggregate principal amount of:
o all funding agreements securing all outstanding series of notes issued under the
Allstate Life(R) CoreNotes(R) program as to which exercises of any put option
by any issuing trust shall be accepted by Allstate Life in any calendar
year to an amount equal to the greater of $2,000,000 or 2% of the aggregate
principal amount of all funding agreements securing all outstanding series
of notes issued under the Allstate Life(R) CoreNotes(R) program as of the end
of the most recent calendar year or such other greater amount as determined
in accordance with the applicable funding agreement and set forth in the
S-8
applicable pricing supplement;
o the funding agreements securing the notes of a series as to which exercises of any put
option by the applicable trust attributable to notes as to which the survivor's
option has been exercised by the authorized representative of any individual deceased
beneficial owner to $250,000 in any calendar year or such other greater amount as
determined in accordance with the applicable funding agreement and set forth
in the applicable pricing supplement; and
o the funding agreements securing a series of notes as to which exercises of any put
option by the applicable trust attributable to notes as to which the survivor's option
has been exercised shall be accepted in any calendar year to an amount as set forth in
the applicable funding agreement and the applicable pricing supplement.
Additional details on the survivor's option are described in the section titled
"Description of the Notes--Survivor's Option" on page S-36.
Currency and Denominations...... Notes will be denominated in U.S. dollars. Unless otherwise specified in the applicable
pricing supplement, notes will be issued and sold in denominations of $1,000 and integral
multiples of $1,000 in excess thereof.
Listing of Notes................ Unless otherwise specified in the applicable pricing supplement, a series of notes will
not be listed on any securities exchange.
Forms of Notes.................. Book-entry through the facilities of The Depository Trust Company ("DTC"), except as
otherwise described under "Description of the Notes--Book-Entry Notes."
Collateral...................... The notes of a series will be secured by the right, title and interest of the issuing
trust in and to (1) the funding agreement(s) held by that trust, (2) all proceeds of such
funding agreement(s) and (3) all books and records pertaining to such funding
agreement(s). In this prospectus supplement, references to "other collateral" are to
items (2) and (3) above.
Funding Agreements.............. The funding agreements are unsecured obligations of Allstate Life, an Illinois stock life
insurance company. In the event of insolvency of an Illinois insurance company, claims
against the insurer's estate are prioritized pursuant to Section 5/205 of the Illinois
Insurance Code. Under Section 5/205(1)(d) of the Illinois Insurance Code, claims by
"policyholders, beneficiaries, and insureds, under insurance policies, annuity contracts,
and funding agreements" receive payment prior to any distribution to general creditors
not falling within any other priority class under the Illinois Insurance Code.
The registrants believe that in a properly prepared and presented case in a delinquency
proceeding under Article XIII of the Illinois Insurance Code, 215 ILCS Section 5/187 et
seq. (the "Illinois Liquidation Act"), the timely and properly filed claims of an owner
under the funding agreement (with the possible exception of claims for Additional
Amounts, as discussed below) would be entitled to distribution pari passu with claims
made by other policyholders, beneficiaries, and insureds under other insurance policies,
insurance contracts, annuities and funding agreements issued by Allstate Life, and the
claims of the Illinois Life and Health Insurance Guaranty Association, and any similar
organization in another state, in accordance with Section 5/205(1)(d) of the Illinois
Liquidation Act, and an owner's claims under the funding agreement should not be
recharacterized as other than the claims of a policyholder, beneficiary, or insured under
an insurance policy, insurance contract, annuity or funding agreement.
The obligations of Allstate Life under any funding agreement will not be guaranteed by
any person or entity.
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If a funding agreement so provides, Allstate Life may be required to pay Additional
Amounts (as such term is defined therein) to the indenture trustee as collateral assignee
of the funding agreement. For a discussion regarding payment of Additional Amounts, see
"Description of the Notes--Withholding Tax; No Payment of Additional Amounts." Although
such payments could be viewed as a claim under the funding agreements within the
meaning of Section 5/205(1)(d), they may also be argued to be a separate payment
obligation. Therefore, while in a proceeding before a court of competent jurisdiction the
court might find that a claim for an Additional Amount constitutes a claim under a
funding agreement, it also might find that such a claim is not a claim entitled to the
priority afforded by Section 5/205(1)(d). If a claim for an Additional Amount does not
constitute a claim entitled to the priority afforded by Section 5/205(1)(d), then in a
properly prepared and presented case any claim for an Additional Amount would be
entitled to the same priority as claims of general creditors of Allstate Life under
Section 5/205(1)(g).
With respect to the issuance of any series of the notes, the aggregate amount of Allstate Life's
liabilities that would rank pari passu with each funding agreement securing such series
of notes is disclosed in the financial statements of Allstate Life contained in
Allstate Life's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q
filed with the SEC, in each case as of the date of such financial statements. This
amount appears in the Consolidated Statements of Financial Position as a liability under
the line item entitled "Contractholder funds."
Terms of the Funding Notes...... Each trust will use the net proceeds received from the issuance of the related series of
notes to purchase a funding note in definitive form (each, a "funding note") from Global
Funding. Each funding note will have a principal amount equal to the principal amount of
the related series of notes. Each funding note will otherwise have payment and other
terms substantially similar to the related series of notes, except that each funding note
will contain a provision that makes it immediately cancelable upon the assignment and
deposit by Global Funding of the related funding agreement(s) to the related issuing
trust. Such cancellation shall operate as a redemption and satisfaction of such funding
note.
Terms of the Funding
Agreements.................... Global Funding will use the net proceeds received from the sale of the related funding
note to purchase one or more funding agreements issued by Allstate Life. Global
Funding will immediately pledge and collaterally assign each such funding
agreement to the funding note indenture trustee and immediately thereafter assign
absolutely to, and deposit into, the issuing trust each such funding agreement. The
funding agreement(s) will have a principal amount equal to the principal amount of the
related series of notes. The funding agreement(s) will otherwise have payment and
other terms substantially similar to the related series of notes.
Withholding Tax................. All amounts due in respect of the notes of a series will be made without any applicable
withholding or deduction for or on account of any present or future taxes, duties,
levies, assessments or other governmental charges of whatever nature imposed or levied by
or on behalf of any governmental authority, unless such withholding or deduction is
required by law. Unless otherwise specified in the applicable pricing supplement, neither
the notes of the applicable series nor the related funding note or funding agreement(s)
will provide for the payment of additional amounts relating to any required withholding
or deduction imposed or levied on payments in respect of a series of notes or the related
funding note or funding agreement(s). As a result, unless otherwise specified in the
applicable pricing supplement, the risk of any such withholding or deduction, whether or
not as a result of a change in law or otherwise, will be borne by the holders of such
series of notes.
Ratings......................... Unless otherwise indicated in the applicable pricing supplement, it is expected that each
series of notes, and the related funding note and the funding agreement(s) securing such
series of notes will have an issue credit rating of "AA" from Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's"). It is
expected that the program will be rated "Aa2" by Moody's Investors Service, Inc.
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("Moody's") and "AA" by Standard & Poor's.
If Moody's or Standard & Poor's changes the program rating, the new program rating will be
specified in the applicable pricing supplement. Notes of a series will be issued under the
program only in the event that, at the time of issuance of such series of notes, at least one
nationally recognized rating agency would assign an investment grade rating to such series of
notes, the related funding note and the funding agreement(s) securing such series of notes.
Fees and Expenses............... Allstate Life and Global Funding entered into an amended and restated support and
expenses agreement dated as of March 15, 2006 (the "depositor support agreement").
Pursuant to the depositor support agreement, Allstate Life agreed, among other things, to
pay certain costs and expenses relating to the offering, sale and issuance of each
funding note and certain costs, expenses and taxes of Global Funding. Pursuant to the
depositor trust agreement, Allstate Life also agreed to indemnify each service provider
of Global Funding, as well as Global Funding, with respect to certain matters.
In connection with the issuance of a series of notes, Allstate Life and the issuing trust
will enter into a support and expenses agreement (each, a "support agreement"). Under
each support agreement, Allstate Life will agree to pay certain costs and expenses
relating to the offering, sale and issuance of the applicable series of notes and certain
costs, expenses and taxes of the issuing trust. Pursuant to each support agreement,
Allstate Life will also agree to indemnify each service provider of the issuing trust, as
well as the issuing trust, with respect to certain matters.
It is anticipated that the indenture trustee fees for this program and the Secured Medium Term
Notes Program will be approximately $60,000 annually.
Governing Law................... The notes, each indenture, each funding note and each funding note indenture will be
governed by, and construed in accordance with, the laws of the State of New York. The
depositor trust agreement is, and each trust agreement will be, governed by, and
construed in accordance with, the laws of the State of Delaware. The funding agreements
will be governed by the laws of the State of Illinois.
United States Federal Income
Tax Considerations............ Special tax counsel to Global Funding will render its opinion that under current law and
based on certain facts and assumptions contained in such opinion, for United States
Federal income tax purposes, Global Funding and each trust will be ignored and that the
notes will be classified as indebtedness of Allstate Life. Each holder and beneficial
owner of the notes, by purchase of the notes, agrees to such treatment. Accordingly,
holders of the notes generally will have the same United States federal income tax
consequences from the purchase of the notes as they would had they purchased a debt
obligation issued directly by Allstate Life. Prospective purchasers of the notes must
carefully consider the tax consequences of the ownership and disposition of the notes set
forth under "United States Federal Income Tax Considerations."
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RISK FACTORS
Your investment in the notes includes risks. In consultation with your own
financial and legal advisers, you should carefully consider, among other
matters, the following discussion of risks before deciding whether an investment
in the notes is suitable for you. The notes are not an appropriate investment
for you if you do not understand their significant components and/or financial
matters. You should also consult the discussion of risk factors set forth in
Allstate Life's most recent Annual Report on Form 10-K, which is incorporated
into this prospectus supplement and the accompanying prospectus by reference.
Risk Factors Relating to the Depositor and the Trusts
Each trust will have limited resources and therefore its ability to make timely
payments with respect to its series of notes will depend upon Allstate Life
making payments under the relevant funding agreement
The ability of a trust to make timely payments with respect to the related
series of notes is principally dependent upon Allstate Life making the related
payments under each relevant funding agreement. Each trust is a special purpose
statutory trust formed for the purpose of the issuance of the related series of
notes. The obligations under a series of notes will be secured by and payable
solely from the collateral held in the issuing trust. No holder of a series of
notes will have any right to receive payments from the collateral related to any
other series of notes.
The notes of a series will represent the obligations of the issuing entity
only and will not represent the obligations of, or interest in, any other person
or entity, including Global Funding, Allstate Life or any of their respective
affiliates
The notes of a series will represent the obligations of the issuing entity
only and will not represent the obligations of, or interest in, any other person
or entity, including Global Funding, Allstate Life or any of their respective
affiliates. The notes will not be guaranteed by any person or entity. Except
pursuant to the terms of the funding agreement(s) included in the collateral for
each series of notes, none of these entities nor any agent, trustee or
beneficial owner of Global Funding or the trusts, in respect of any trust, is
under any obligation to provide funds or capital to Global Funding or the trusts
or with respect to any series of notes issued by the trusts. The net worth of
Global Funding on the date hereof is approximately $1,000 and is not expected to
increase materially. The net worth of each trust is expected to be minimal.
Global Funding is and the trusts will be special purpose entities and, as of the
date of issue of any series of notes, the issuing trust will have, no prior
operating history
Global Funding is and the trusts will be special purpose statutory trusts
organized under the laws of the State of Delaware. Global Funding exists for the
primary purpose of facilitating the programs for the issuance of notes. Each
trust will exist for the exclusive purposes of: issuing and selling one series
of notes to investors; using the net proceeds from the sale of series of notes
to acquire the related collateral, including one or more funding agreements; and
engaging in other activities necessary or incidental thereto. As of the date of
issue of any series of notes, the issuing trust will have, no prior operating
history.
Risk Factors Relating to the Notes
The notes of a series represent non-recourse obligations of the issuing entity
The obligations under the notes of a series represent non-recourse
obligations payable solely from the applicable collateral constituting the
assets of the issuing trust. If any event of default shall occur under any
series of the notes, the rights of the holders of the notes of such series and
the indenture trustee, on behalf of such holders, will be limited to a
proceeding against the applicable collateral. None of such holders or the
indenture trustee will have the right to proceed against the collateral related
to any other series of notes, Global Funding, any other trust or any of Allstate
Life, its officers, directors, affiliates, employees or agents or any of the
trustees, beneficial owners or agents, or any of their respective officers,
directors, affiliates, employees or agents in the case of any judgment in which
there is deficiency remaining after foreclosure of any property included in such
collateral. If an event of default shall have occurred under a series of notes,
the indenture trustee will be entitled to have its fees and expenses paid solely
from the collateral of such series of notes before holders of the notes of such
series receive payment of the amounts then due and owing with respect to their
notes; provided, that such priority of the indenture trustee over the holders of
the notes of a series will be limited to an aggregate amount of no more than
$250,000 for all series of notes. All claims of the holders of a series of notes
in excess of amounts received from the related collateral will be extinguished.
In the absence of an event of default under a funding agreement, the occurrence
of an event of default under the related series of notes will not give rise to
any right to accelerate such applicable funding agreement. In that event, it is
possible that the obligations under the applicable series of notes may be
accelerated while the obligations of Allstate Life
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under the applicable funding agreement(s) would not be similarly accelerated. If
this occurs, the indenture trustee may have no or limited ability to proceed
against the applicable funding agreement(s) and the related collateral and
holders of the notes may not be paid in full, or in a timely manner upon such
acceleration. See "Description of the Indentures--Events of Default" in the
accompanying prospectus.
Allstate Life will be the sole obligor under the funding agreements
Since Allstate Life will be the sole obligor under the funding agreements,
the ability of a trust to meet its obligations, and your ability to receive
payments from such trust, with respect to a particular series of notes, will be
principally dependent upon Allstate Life's ability to perform its obligations
under each applicable funding agreement held by the issuing trust. Despite this,
you will have no direct contractual rights against Allstate Life under any such
funding agreement. Pursuant to the terms of each funding agreement, recourse
rights to Allstate Life will belong to the issuing trust, its successors and
permitted assignees. In connection with the offering and sale of a series of
notes, the issuing trust will pledge, collaterally assign and grant a security
interest in the collateral for such series of notes to the indenture trustee on
behalf of the holders of the applicable series of notes and the other persons
identified in the relevant indenture. Recourse to Allstate Life under each such
funding agreement will be enforceable only by the indenture trustee as a secured
party for the benefit of holders of such series of notes and any other person
for whose benefit the indenture trustee is or will be holding the collateral.
Accordingly, if Allstate Life fails to perform its obligations under the
applicable funding agreement(s), your ability to receive payments from the
issuing trust would be materially and adversely affected.
Nonetheless, since Allstate Life is a registrant, purchasers of notes may
be able to proceed directly against Allstate Life to enforce their rights under
the Federal securities laws and their rights under the Federal securities laws
will be no different than if they purchased the underlying funding agreements
directly from Allstate Life.
The notes could be deemed to be participations in the funding agreements or
could otherwise be deemed to be contracts of insurance and holders of the notes
could be found to be acting as insurance agents or brokers
The laws and regulations of each state of the United States and the
District of Columbia (the "covered jurisdictions") contain broad definitions of
the activities that may constitute the conduct of the business of insurance in
such jurisdictions. Because the primary asset of each trust will be one or more
funding agreements issued by Allstate Life, which will be sold to, and deposited
into, the issuing trust by Global Funding, it is possible that a trust's
issuance of notes, Global Funding's issuance of the related funding note or the
performance of the issuing trust's obligations under the notes, including the
payment or prepayment of amounts due under the notes, or the purchase, resale or
assignment of the notes by any investor or any person who acquires the notes
directly or indirectly from such investor;
o could be characterized by one or more covered jurisdictions as the
conduct of the business of insurance by Global Funding, the issuing
trust, any such investor or any such other person or
o could otherwise subject Global Funding, the issuing trust, any such
investor or any such other person to regulation under the insurance
laws of one or more covered jurisdictions.
This could, among other effects, require such persons to be subject to
regulatory licensure or other qualifications and levels of compliance that
cannot practically be achieved. Failure to comply with such requirements could
subject any such person to regulatory penalties. In the event Global Funding or
any trust is subject to any such penalties or any other liabilities resulting
from such regulation, the ability of holders to receive payment under the notes
could be materially and adversely affected. In addition, any such failure to
comply or the threat of any such regulation could reduce liquidity with respect
to the notes, prevent an investor from transferring notes and reduce the
marketability and market value of the notes. Therefore, any such regulation or
threat of regulation by any one or more covered jurisdictions could result in an
investor either being unable to liquidate its investment in the notes or, upon
any such liquidation, receiving a value significantly less than the initial
investment in the notes.
The Illinois Department of Insurance has confirmed that it does not
consider the sale of publicly offered funding agreement backed medium term notes
to violate the Illinois Insurance Code. In addition, the Illinois Department of
Insurance has approved the form of funding agreement to be used in connection
with each offering of notes.
Based primarily upon communications with the staff of the insurance
regulatory bodies in most states and the legal advice of LeBoeuf, Lamb, Greene &
MacRae LLP, Allstate Life and Global Funding believe that:
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o the notes should not be subject to regulation as participations in the
funding agreements themselves or otherwise constitute insurance
contracts under the insurance laws of the covered jurisdictions; and
o Global Funding, the trusts and persons selling or purchasing the notes
should not be subject to regulation as doing an insurance business
under the insurance laws of the covered jurisdictions by virtue of
their respective activities in connection with the offer, sale and/or
purchase of the notes.
There are, however, wide variations in the insurance laws of the covered
jurisdictions, subtle nuances in their application, and a general absence of any
consistent pattern of interpretation or enforcement. Insurance regulatory
authorities have broad discretionary powers in administering the insurance laws,
including the authority to modify or withdraw a regulatory interpretation,
impose new rules, and take a position contrary to Allstate Life's. In addition,
state courts are not bound by any regulatory interpretations and could take a
position contrary to Allstate Life's. Consequently, the purchase, resale or
assignment of the notes or the funding notes could subject the parties to such
transaction to regulation or enforcement proceedings under the insurance laws of
one or more covered jurisdictions.
Payments under funding agreements may be insufficient to pay principal and
interest, if any, under the notes
Payments of the principal of and any interest on a series of notes will be
made solely from the payments the issuing trust receives under the applicable
funding agreement(s). Unless otherwise specified in this prospectus supplement
or the applicable pricing supplement, Allstate Life will not pay any Additional
Amounts (as defined in the applicable funding agreement) in respect of a funding
agreement to compensate for any withholding or deduction for or on account of
any present or future taxes, duties, levies, assessments or governmental charges
of whatever nature imposed or levied on payments in respect of a funding
agreement, by or on behalf of any governmental authority and each holder of a
note of the related series of notes will be deemed for all purposes to have
received cash in an amount equal to the portion of such withholding or deduction
that is attributable to such holder's interest in the notes, as equitably
determined by the issuing trust. Under this circumstance, the issuing trust will
not actually pay, or cause to be paid, to such holder all of the amounts which
would have been receivable by such holder in the absence of such taxes, duties,
levies, assessments or other governmental charges.
Redemption may adversely affect your return on the notes
If your notes are redeemable at the option of the issuing trust, it may
choose to redeem your notes at times when prevailing interest rates are
relatively low. In addition, if your notes are subject to mandatory redemption,
the issuing trust may be required to redeem your notes also at times when
prevailing interest rates are relatively low. As a result, you may not be able
to reinvest the redemption proceeds in a comparable security at an interest rate
equal to the interest rate on your notes being redeemed.
There may not be any trading market for your notes; many factors affect the
trading and market value of your notes
Upon issuance, the notes of a series will not have an established trading
market. No assurance can be given that a trading market for your notes will ever
develop or be maintained if developed. In addition to the creditworthiness of
Allstate Life and the issuing trust, many factors affect the trading market for,
and trading value of, your notes. These factors include:
o the time remaining to the maturity of your notes;
o the outstanding amount of the applicable series of notes;
o any redemption features of your notes; and
o the level, direction and volatility of market interest rates
generally.
There may be a limited number of buyers if you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all. In addition, notes that are designed for specific investment
objectives or strategies often experience a more limited trading market and more
price volatility than those not so designed. You should not purchase notes
unless you understand and know you can bear all of the investment risks
involving your notes.
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Ratings of this Allstate Life(R) CoreNotes(R) program described in this
prospectus supplement and the accompanying prospectus, the related medium term
note program and each series of notes may not reflect all risks of an investment
in the notes
Each series of notes will be rated by at least one nationally recognized
statistical rating organization. The ratings of such notes will primarily
reflect the financial strength of Allstate Life and will change in accordance
with the rating of Allstate Life's financial strength and with any change in the
priority status under Illinois law of funding agreements. Any rating is not a
recommendation to purchase, sell or hold any particular security, including the
notes. Such ratings do not comment as to market price or suitability for a
particular investor. In addition, there can be no assurance that a rating will
be maintained for any given period of time or that a rating will not be lowered
or withdrawn in its entirety. The ratings of this Allstate Life(R) CoreNotes(R)
program described in this prospectus supplement and the accompanying prospectus,
the related medium term note program and each series of notes may not reflect
the potential impact of all risks related to structure and other factors on any
trading market for, or trading value of, your notes.
Any survivor's option may be subject to certain limitations
Under the Allstate Life(R) CoreNotes(R) program, Allstate Life has the
discretionary right to limit the aggregate principal amount of:
o all funding agreements securing all outstanding series of notes as to
which exercises of any put option by any issuing trust shall be
accepted by Allstate Life in any calendar year to an amount equal to
the greater of $2,000,000 or 2% of the aggregate principal amount of
all funding agreements securing all outstanding series of notes issued
under the Allstate Life(R) CoreNotes(R) program as of the end of the
most recent calendar year or such other greater amount as determined
in accordance with the applicable funding agreement(s) and set forth
in the applicable pricing supplement;
o the funding agreement(s) securing the notes of a series as to which
exercises of any put option by the applicable trust attributable to
notes as to which the survivor's option has been exercised by the
authorized representative of any individual deceased beneficial owner
to $250,000 in any calendar year or such other greater amount as
determined in accordance with the applicable funding agreement(s) and
set forth in the applicable pricing supplement; and
o the funding agreement(s) securing a series of notes as to which
exercises of any put option by the applicable trust shall be accepted
in any calendar year to an amount as set forth in the applicable
funding agreement(s) and the applicable pricing supplement.
In any such event, each trust shall similarly be required to limit the
aggregate principal amount of notes as to which exercises of the survivor's
option shall be accepted by it. Accordingly, no assurance can be given that the
exercise of the survivor's option for a desired amount will be accepted as to
any series of notes or in any single calendar year.
An increase in market interest rates could result in a decrease in the value of
any notes bearing interest at a fixed rate
If market interest rates increase above the interest rate of notes bearing
interest at a fixed rate, such notes bearing interest at a fixed rate generally
decline in value because debt instruments of the same face value priced at
market interest rates will yield higher income. Consequently, if you purchase
fixed rate notes and market interest rates increase above the fixed interest
rate on the notes you have purchased, the market value of your notes may
decline. No assurance can be given regarding the future level of market interest
rates.
If you purchase discount notes, the amount payable to you upon early redemption,
repayment or acceleration of these notes may be less than the principal amount
(i.e., par) of the notes plus accrued but unpaid interest and premium, if any
If you purchase discount notes, the amount payable to you upon early
redemption, repayment or acceleration of these notes may be less than the
principal amount thereof plus accrued and unpaid interest. The amount payable
will be determined by the formula set forth in this prospectus supplement or the
applicable pricing supplement.
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Risk Factors Relating to the Collateral
The funding agreements are unsecured obligations of Allstate Life. If the
funding agreements were not determined to be insurance contracts, they would be
accorded the same priority in an insolvency of Allstate Life as its other
general unsecured obligations
The primary assets of each trust will be one or more funding agreements,
and payments on the notes of a series will principally depend on payments under
each related funding agreement(s). In addition, each trust will grant a security
interest in, pledge and assign as collateral each funding agreement it acquires
with the proceeds from the offering of a series of notes together with the
related collateral to the indenture trustee, for the benefit of the holders of
the notes of such series and any other person for whose benefit the indenture
trustee is or will be holding the collateral, to secure the obligations under
that series of notes.
In the event of insolvency of an Illinois insurance company, claims against
the insurer's estate are prioritized pursuant to Section 5/205 of the Illinois
Insurance Code. Under Section 5/205(1)(d) of the Illinois Insurance Code, claims
by "policyholders, beneficiaries, and insureds, under insurance policies,
annuity contracts, and funding agreements" receive payment prior to any
distribution to general creditors not falling within any other priority class
under the Illinois Insurance Code. The funding agreements are unsecured
obligations of Allstate Life.
In a properly prepared and presented case in a delinquency proceeding under
Article XIII of the Illinois Insurance Code, 215 ILCS Section 5/187 et seq. (the
"Illinois Liquidation Act"), the timely and properly filed claims of an owner
under the funding agreement (with the possible exception of claims for
Additional Amounts, as discussed below) would be entitled to distribution pari
passu with claims made by other policyholders, beneficiaries, and insureds under
other insurance policies, insurance contracts, annuities and funding agreements
issued by Allstate Life, and the claims of the Illinois Life and Health
Insurance Guaranty Association, and any similar organization in another state,
in accordance with Section 5 /205(1)(d) of the Illinois Liquidation Act, and an
owner's claims under the funding agreement should not be recharacterized as
other than the claims of a policyholder, beneficiary, or insured under an
insurance policy, insurance contract, annuity or funding agreement.
In the absence of controlling judicial precedents, the opinion of Lord,
Bissell & Brook LLP is based on a reasoned analysis of Illinois statutes, as
well as application of other states' judicial decisions involving similar or
analogous circumstances, and is subject to the limitations, qualifications and
assumptions set forth in its opinion letter. Investors should note that in the
event of the insolvency of an insurance company, however, the judicial
application of statutes governing the distribution of the insurer's general
assets has typically proceeded on a case-by-case basis.
Additional Amounts may be considered a separate payment obligation and may not
be subject to the same priority as other amounts claimed under the funding
agreements
If a funding agreement so provides, Allstate Life may be required to pay
Additional Amounts (as such term is defined therein) to the indenture trustee as
collateral assignee of the funding agreement. Although such payments could be
viewed as a claim under the funding agreements within the meaning of Section
5/205(1)(d), they may also be argued to be a separate payment obligation.
Therefore, while in a proceeding before a court of competent jurisdiction, the
court might find that a claim for an Additional Amount constitutes a claim under
a funding agreement, it also might find that such a claim is not a claim
entitled to the priority afforded by Section 5 /205(1)(d). Lord, Bissell & Brook
LLP has opined that if a claim for an Additional Amount does not constitute a
claim entitled to the priority afforded by Section 5/205(1)(d), then in a
properly prepared and presented case any claim for an Additional Amount would be
entitled to the same priority as claims of general creditors of Allstate Life
under Section 5/205(1)(g). Accordingly, in the event of the insolvency of
Allstate Life, your claim for any payments of Additional Amounts may be
subordinated to claims for other amounts under the applicable funding agreement.
Changes in Federal tax legislation could adversely affect Allstate Life's business
Under the Internal Revenue Code of 1986, as amended (the "Code"), United
States Federal income tax payable by policyholders on investment earnings is
deferred during the accumulation period of certain life insurance and annuity
products. Thus, taxes, if any, are payable on income attributable to a
distribution under the contract for the year in which the distribution is made.
This favorable tax treatment may give certain of Allstate Life's products a
competitive advantage over other noninsurance products. On May 28, 2003,
President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003,
which reduces the federal income tax rates applicable to certain dividends and
capital gains realized by individuals. This legislation may lessen the
competitive advantage of certain of Allstate Life's products vis-a-vis other
investments that generate dividend and/or capital gain income. As a result,
demand for certain of Allstate Life's products that offer income tax
S-16
deferral may be negatively impacted. Additionally, Congress has from time to
time considered other legislation that would reduce or eliminate the benefits to
policyowners of the deferral of taxation on the accretion of value within
certain insurance products or otherwise affect the taxation of insurance
products and insurance companies. To the extent that the Code is revised to
reduce the tax deferred status of insurance products, or to reduce the taxation
of competing products, all life insurance companies, including Allstate Life,
could be adversely affected.
S-17
ALLSTATE LIFE GLOBAL FUNDING TRUSTS
Each series of notes will be issued by a newly created separate and
distinct trust formed by Global Funding, the administrator and the Delaware
trustee pursuant to the filing of a certificate of trust and the execution of
the applicable trust agreement. Global Funding will be the sole beneficial owner
of each trust that is formed.
After formation, each trust will not engage in any activity other than:
o issuing and selling a single series of notes;
o immediately acquiring a funding note and immediately surrendering such
funding note for cancellation pursuant to its terms in exchange for
one or more funding agreement(s);
o acquiring, holding and maintaining the applicable funding
agreement(s);
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the indenture trustee;
o making payments on the applicable series of notes; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
Unless otherwise provided in the applicable pricing supplement, the
principal executive offices of the trusts will be located at Allstate Life
Global Funding Trusts, c/o: AMACAR Pacific Corp., 6525 Morrison Boulevard, Suite
318, Charlotte, North Carolina 28211 and the telephone number will be (704)
365-0569. For more information about the trusts, see "Description of Allstate
Life Global Funding and the Trusts" in the accompanying prospectus.
ALLSTATE LIFE GLOBAL FUNDING
Global Funding is a special purpose statutory trust existing under the laws
of the State of Delaware. The primary purpose of Global Funding is to serve as
depositor for the programs.
Global Funding will not engage in any activity other than:
o beneficially owning the trusts;
o issuing one or more funding notes;
o acquiring one or more funding agreements from Allstate Life;
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the funding note indenture
trustee;
o assigning absolutely the funding agreement(s) to, and depositing such
funding agreement(s) into, the trusts; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
Unless otherwise provided in the applicable pricing supplement, the
principal executive offices of Global Funding are located at Allstate Life
Global Funding, c/o: AMACAR Pacific Corp., 6525 Morrison Boulevard, Suite 318,
Charlotte, North Carolina 28211 and the telephone number is (704) 365-0569. For
more information about Global Funding, see "Description of Allstate Life Global
Funding and the Trusts" in the accompanying prospectus.
S-18
ALLSTATE LIFE INSURANCE COMPANY
Allstate Life was organized in 1957 as a stock life insurance company under
the laws of the State of Illinois. It conducts substantially all of its life
insurance operations directly or through wholly owned United States
subsidiaries. It is a wholly owned subsidiary of Allstate Insurance Company
("AIC"), a stock property-liability insurance company organized under the laws
of the State of Illinois. All of the outstanding stock of AIC is owned by The
Allstate Corporation, a publicly owned holding company incorporated under the
laws of the State of Delaware.
The Allstate Corporation, together with its subsidiaries, is the second
largest personal property and casualty insurer in the United States on the basis
of 2005 statutory premiums earned. Widely known through the "You're In Good
Hands With Allstate(R)" slogan, The Allstate Corporation, through its
subsidiaries, provides insurance products to approximately 17 million households
and has approximately 14,800 exclusive agencies and financial specialists in the
United States and Canada. For more information about Allstate Life, see
"Description of Allstate Life Insurance Company" in the accompanying prospectus.
Allstate Life's principal executive offices are located at 3100 Sanders
Road, Northbrook, Illinois 60062 and its telephone number is (847) 402-5000.
S-19
DESCRIPTION OF THE NOTES
This section provides a summary description of the material provisions of
the notes. Each series of notes will be issued pursuant to a separate indenture
(each, an "indenture") to be entered into among the issuing trust and the other
parties specified therein, including The Bank of New York Trust Company, N.A.,
or another entity specified therein as the indenture trustee in the indenture
(including, in each case, any successor, the "indenture trustee"). The
provisions of the notes are not restated in their entirety and you should read
the actual provisions set forth in the standard indenture terms filed with the
SEC because those provisions, and not this description, will define your rights
as an owner of an interest in the notes of a series. The terms and conditions of
the notes described in this section will apply to each series of notes, except
that the specific terms of a series of notes will be added in the applicable
pricing supplement and each book-entry note (each, a "note certificate")
representing the notes of such series. It is important for you to consider the
information contained in this prospectus supplement, the accompanying
prospectus, the applicable indenture, the applicable pricing supplement and the
note certificates in making your investment decision.
This section describes some technical concepts and occasionally contains
defined terms. You should refer to the standard indenture terms and the forms of
note certificates filed as exhibits to the registration statement to which this
prospectus supplement and the accompanying prospectus relate for the full
description of those concepts and complete definitions of those terms.
General
Indentures
Each trust will issue its series of notes subject to and entitled to the
benefits of a separate indenture. Each indenture will be subject to, qualified
under and governed by, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The aggregate principal amount of notes that may be
authenticated and delivered under each indenture will be unlimited. For a
description of the indentures, see "Description of the Indentures" beginning on
page 21 of the accompanying prospectus.
Collateral
Pursuant to each indenture, the issuing trust will pledge and collaterally
assign each funding agreement held by it to the indenture trustee for the
benefit of the holders of the notes issued by such trust and any other person
for whose benefit the indenture trustee is or will be holding the collateral (as
defined below) for such series of notes. Each series of notes will be secured by
a first priority perfected security interest in the "collateral" for such series
of notes in favor of the indenture trustee, for the benefit of the holders of
the notes of such series and any other person for whose benefit the indenture
trustee is or will be holding the collateral, which will consist of the right,
title and interest of the issuing trust in and to:
o the funding agreement(s) held by the issuing trust;
o all proceeds of the relevant funding agreement(s); and
o all books and records pertaining to the relevant funding agreement(s).
Ranking
The notes of a series will represent the unconditional, direct,
non-recourse and unsubordinated obligations of the issuing entity and will rank
equally among themselves. The notes of a series will represent the obligations
of the issuing entity only and will not represent the obligations of, or
interest in, any other person or entity, including Global Funding, Allstate Life
or any of their respective affiliates.
Pricing Supplement
The pricing supplement relating to the offering of a series of notes will
describe, among other things, the following terms of the notes, including:
o the principal amount of the notes;
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o whether the notes are:
o fixed rate notes;
o floating rate notes, and/or discount notes that do not bear any
interest currently or bear interest at a rate that is below
market rates at the time of issuance;
o the price at which the notes will be issued, which will be expressed
as a percentage of the aggregate principal amount or face amount;
o the original issue date on which the notes will be issued;
o the stated maturity date;
o if the notes are fixed rate notes, the rate per annum at which the
notes will bear any interest and the interest payment date frequency;
o if the notes are floating rate notes, relevant terms such as: the
interest rate basis or interest rate bases, the initial interest rate,
the interest reset period or the interest reset dates, the interest
payment dates, the index maturity, any maximum interest rate, the
minimum interest rate, the spread and/or spread multiplier, and any
other terms relating to the particular method of calculating the
interest rate for the notes and whether and how the spread and/or
spread multiplier may be changed prior to the stated maturity date;
o whether the authorized representative of the beneficial owner of a
beneficial interest in the notes will have the right to seek repayment
upon the death of the beneficial owner as described under
"--Survivor's Option" on page S-36;
o whether the notes may be redeemed by the issuing trust, or repaid at
the option of the holders, prior to the stated maturity date and the
terms of their redemption or repayment, provided that any such
redemption or repayment will be accompanied by the simultaneous
redemption or repayment of the relevant funding agreement(s);
o any special United States federal income tax considerations relating
to the purchase, ownership and disposition of the notes; and
o any other terms of the notes provided in the accompanying prospectus
to be set forth in a pricing supplement or that are otherwise
consistent with the provisions of the indenture under which the notes
will be issued.
The pricing supplement also may add, update, supplement or clarify
information in this prospectus supplement and the accompanying prospectus. The
form of pricing supplement is included in this prospectus supplement as Annex B.
Pricing Options
Notes that bear interest will be fixed rate notes or floating rate notes,
or a combination of fixed rate and floating rate, as specified in the applicable
pricing supplement. The trusts may also issue discount notes, as specified in
the applicable pricing supplement.
Maturities
Each series of notes will mature on a day between nine months and 30 years
from its date of original issuance. Each series of notes will have the same
maturity date as the related funding agreement(s). The principal or any
installment of principal may mature prior to the stated maturity date if, for
example, there is a declaration of acceleration of maturity, a notice of
redemption at the option of the issuing trust or an election to exercise the
survivor's option.
Currency
The notes of each series will be denominated in, and payments of principal,
premium, if any, and/or interest, if any, and any other amounts in respect of
the notes will be made in, U.S. dollars.
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Form of Notes; Denominations
The issuing trust will issue each note of a series as a book-entry note
represented by one or more fully registered global securities, except as
contemplated under "--Book-Entry Notes." Unless otherwise specified in the
applicable pricing supplement, the minimum denominations of each note will be
$1,000 and integral multiples of $1,000 in excess thereof.
Listing of Notes
Unless otherwise specified in the applicable pricing supplement, a series
of notes will not be listed on any securities exchange.
Transfers and Exchanges
Book-entry notes may be transferred or exchanged only through DTC. See
"--Book-Entry Notes." No service charge will be imposed for any such
registration of transfer or exchange of notes, but the issuing trusts may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith (other than certain exchanges
not involving any transfer).
Payments of Principal and Interest
The issuing trust will make payments of principal of, and premium, if any,
interest on, if any, and other amounts due and owing with respect to, book-entry
notes through the indenture trustee to DTC or its nominee. See "--Book-Entry
Notes." Payments of principal of, and premium on, if any, interest on, if any,
and other amounts due and owing with respect to, definitive notes will be made
at maturity in immediately available funds upon presentation and surrender of
the definitive note (and, in the case of the exercise of the survivor's option,
upon submission of a properly completed election form if required) at the office
or agency maintained by the issuing trust for this purpose in the Borough of
Manhattan, The City of New York. The issuing trust will make payments of
interest, if any, on and any other amounts due and owing with respect to, a
definitive note at maturity to the person to whom the issuing trust pays the
principal. The issuing trust will make any payments of interest on a definitive
note on an interest payment date other than the date of maturity by check mailed
to the address of the record date registered holder as it appears in the
security register. Notwithstanding the foregoing, the issuing trust will make
any payments of interest on an interest payment date other than the date of
maturity to each record date registered holder of $10,000,000 or more in
principal amount of definitive notes with the same interest payment date
(whether those notes otherwise have identical or different terms and provisions)
by wire transfer of immediately available funds if the registered holder has
delivered appropriate wire transfer instructions in writing to the indenture
trustee not less than 15 days prior to the relevant interest payment date. Any
wire transfer instructions received by the indenture trustee shall remain in
effect until revoked by the registered holder.
If any interest payment date or the maturity date of a note falls on a day
that is not a business day, the issuing trust will make the required payment on
the next business day and no additional interest will accrue for that period.
"Business day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in The City of New York; provided,
however, that, with respect to notes as to which LIBOR is an applicable interest
rate basis, the day must also be a London banking day (as defined below).
Payments of Principal and Interest
Notes of a series may bear interest at a fixed interest rate ("fixed rate
notes") or at a floating interest rate ("floating rate notes").
Fixed Rate Notes
Each series of fixed rate notes will bear interest at a fixed rate from and
including its date of issue or from and including the most recent interest
payment date as to which interest has been paid or made available for payment
until the principal is paid or made available for payment. The applicable
pricing supplement will specify the fixed interest rate per annum applicable to
each note and the frequency with which interest is payable. Interest, including
interest for any partial period, will be computed on the basis of a 360-day year
of twelve 30-day months. Each payment of interest, including interest to be paid
at maturity, will include interest to, but excluding, the date that the interest
payment is due.
Interest on notes that bear interest at fixed rates will be payable in
arrears on each interest payment date to the registered holder at the close of
business on the record date except that interest, if any, due at maturity will
be paid to the
S-22
person to whom the principal of the note is paid. Unless otherwise specified in
the applicable pricing supplement, the record date will be the day that is
fifteen calendar days preceding the applicable interest payment date, whether or
not a business day. Unless otherwise specified in the applicable pricing
supplement, the interest payment dates for fixed rate notes will be as follows:
Interest Payment Frequency Interest Payment Dates
-------------------------------------- -----------------------------------------------------
Monthly Fifteenth day of each calendar month, beginning in
the first calendar month following the date such
series of notes was issued.
Quarterly Fifteenth day of every third month, beginning in the
third calendar month following the date such
series of notes was issued.
Semiannual Fifteenth day of every sixth month, beginning in the
sixth calendar month following the date such
series of notes was issued.
Annual Fifteenth day of every twelfth month, beginning in
the twelfth calendar month following the date such
series of notes was issued.
Unless otherwise provided in the applicable pricing supplement, any
interest payment date or the maturity date of a series fixed rate notes falls on
a day that is not a business day, the issuing trust will make the required
payment of principal, premium, if any, and/or interest or other amounts on the
next succeeding business day, and no additional interest will accrue in respect
of the payment made on that next succeeding business day.
Interest rates that the issuing trust offers on the fixed rate notes may
differ depending upon, among other factors, the aggregate principal amount of
notes purchased in any single transaction. Notes with different variable terms,
other than interest rates, may also be offered concurrently by other trusts to
different investors. Other trusts may change interest rates or formulas and
other terms of notes from time to time, but no change of terms will affect any
note any other trust has previously issued or as to which any other trust has
accepted an offer to purchase.
Floating Rate Notes
Interest on each series of floating rate notes will be determined by
reference to the applicable interest rate basis or interest rate bases, which
may, as described below, include:
o the CD Rate,
o the CMT Rate,
o the Commercial Paper Rate,
o the Constant Maturity Swap Rate,
o the Federal Funds Rate,
o LIBOR,
o the Prime Rate, or
o the Treasury Rate.
S-23
The rate derived from the applicable interest rate basis will be determined
in accordance with the related provisions below. The interest rate in effect on
each day will be based on:
o if that day is an interest reset date, the rate determined as of the
interest determination date (as defined below) immediately preceding
that interest reset date; or
o if that day is not an interest reset date, the rate determined as of
the interest determination date immediately preceding the most recent
interest reset date.
The "spread" is the number of basis points (one one-hundredth of a
percentage point) specified in the applicable pricing supplement to be added to
or subtracted from the related interest rate basis or interest rate bases
applicable to a series of notes that bears interest at floating rates. The
"spread multiplier" is the percentage specified in the applicable pricing
supplement of the related interest rate basis or interest rate bases applicable
to a series of notes that bears interest at floating rates by which the interest
rate basis or interest rate bases will be multiplied to determine the applicable
interest rate. The "index maturity" is the period to maturity of the instrument
or obligation with respect to which the related interest rate basis or interest
rate bases will be calculated.
Regular Floating Rate Notes
Unless a series of floating rate notes is designated as a series of
Floating Rate/Fixed Rate, or as having an addendum attached or having
other/additional provisions apply, in each case relating to a different interest
rate formula, such series of notes that bears interest at floating rates will be
a series of Regular Floating Rate notes and will bear interest at the rate
determined by reference to the applicable interest rate basis or interest rate
bases:
o multiplied by the applicable spread multiplier, if any; and/or
o plus or minus the applicable spread, if any.
Commencing on the first interest reset date, as specified in the relevant
pricing supplement, the rate at which interest on a series of regular floating
rate notes is payable will be reset as of each interest reset date; provided,
however, that the interest rate in effect for the period, if any, from the date
of issue to the first interest reset date will be the initial interest rate.
Floating Rate/Fixed Rate Notes
If a series of notes that bears interest at floating rates is designated as
a series of Floating Rate/Fixed Rate notes, such series of notes that bears
interest at floating rates will bear interest at the rate determined by
reference to the applicable interest rate basis or interest rate bases:
o multiplied by the applicable spread multiplier, if any; and/or
o plus or minus the applicable spread, if any.
Commencing on the first interest reset date, the rate at which interest on
a series of Floating Rate/Fixed Rate notes is payable will be reset as of each
interest reset date; provided, however, that:
o the interest rate in effect for the period, if any, from the date of
issue to the first interest reset date will be the initial interest
rate, as specified in the relevant pricing supplement; and
o the interest rate in effect commencing on the fixed rate commencement
date will be the fixed interest rate, if specified in the applicable
pricing supplement, or, if not so specified, the interest rate in
effect on the day immediately preceding the fixed rate commencement
date.
Interest Reset Dates
The applicable pricing supplement will specify the dates on which the rate
of interest on a series of notes that bears interest at floating rates will be
reset (each, an "interest reset date"), and the period between interest reset
dates will be the "interest reset period." Unless otherwise specified in the
applicable pricing supplement, the interest reset dates will be, in the case of
a series of floating rate notes which reset:
S-24
o daily--each business day;
o weekly--the Wednesday of each week, with the exception of weekly reset
series of notes that bears interest at floating rates as to which the
Treasury Rate is an applicable interest rate basis, which will reset
the Tuesday of each week;
o monthly--the third Wednesday of each month;
o quarterly--the third Wednesday of every third calendar month,
beginning in the third calendar month following the month in which the
note was issued;
o semiannually--the third Wednesday of the two months specified in the
applicable pricing supplement; and
o annually--the third Wednesday of the month specified in the applicable
pricing supplement; provided, however, that, with respect to any
series of Floating Rate/Fixed Rate notes, the rate of interest thereon
will not reset after the particular fixed rate commencement date.
Unless otherwise provided in the applicable pricing supplement, if any
interest reset date for any series of notes that bears interest at floating
rates would otherwise be a day that is not a business day, the particular
interest reset date will be postponed to the next succeeding business day,
except that in the case of a series of notes that bears interest at floating
rates as to which LIBOR is an applicable interest rate basis and that business
day falls in the next succeeding calendar month, the particular interest reset
date will be the immediately preceding business day.
Interest Determination Dates
The interest rate applicable to a series of notes that bears interest at
floating rates for an interest reset period commencing on the related interest
reset date will be determined by reference to the applicable interest rate basis
as of the particular "interest determination date," which will be:
o with respect to the Federal Funds Rate and the Prime Rate--the
business day immediately preceding the related interest reset date;
o with respect to the CD Rate, the Commercial Paper Rate, and the CMT
Rate--the second business day preceding the related interest reset
date;
o with respect to the Constant Maturity Swap Rate--the second U.S.
Government Securities business day (as defined below) preceding the
related interest reset date; provided, however, that if, after
attempting to determine the Constant Maturity Swap Rate (as described
below), such rate is not determinable for a particular interest
determination date (the "original interest determination date"), then
such interest determination date shall be the first U.S. Government
Securities business day preceding the original interest determination
date for which the Constant Maturity Swap Rate can be determined as
described below;
o with respect to LIBOR--the second London banking day preceding the
related interest reset date; and
o with respect to the Treasury Rate--the day of the week in which the
related interest reset date falls on which day Treasury Bills (as
defined below) are normally auctioned (i.e., Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the
following Tuesday, except that the auction may be held on the
preceding Friday); provided, however, that if an auction is held on
the Friday of the week preceding the related interest reset date, the
interest determination date will be the preceding Friday.
Unless otherwise provided in the applicable pricing supplement, the
interest determination date pertaining to a series of floating rate notes that
bears interest at floating rates the interest rate of which is determined with
reference to two or more interest rate bases will be the latest business day
which is at least two business days before the related interest reset date for
the applicable note that bears interest at floating rates on which each interest
reset basis is determinable.
S-25
Calculation Dates
The indenture trustee will be the "calculation agent" for a series of notes
unless otherwise specified in the applicable pricing supplement. The interest
rate applicable to each interest reset period will be determined by the
calculation agent on or prior to the calculation date (as defined below), except
with respect to LIBOR, which will be determined on the particular interest
determination date. Upon request of the registered holder of a series of
floating rate notes, the calculation agent will disclose the interest rate then
in effect and, if determined, the interest rate that will become effective as a
result of a determination made for the next succeeding interest reset date with
respect to the particular series of floating rate notes. The "calculation date,"
if applicable, pertaining to any interest determination date will be the earlier
of:
o the tenth calendar day after the particular interest determination
date or, if such day is not a business day, the next succeeding
business day; or
o the business day immediately preceding the applicable interest payment
date or the maturity date, as the case may be.
Maximum and Minimum Interest Rates
A series of notes that bears interest at floating rates may also have
either or both of the following if specified in the applicable pricing
supplement:
o a maximum numerical limitation, or ceiling, that may accrue during any
interest reset period (a "maximum interest rate"); and
o a minimum numerical limitation, or floor, that may accrue during any
interest reset period (a "minimum interest rate").
In addition to any maximum interest rate that may apply to a series of
floating rate notes, the interest rate on a series of floating rate notes will
in no event be higher than the maximum rate permitted by New York law, as the
same may be modified by United States law of general application.
Interest Payments
Unless otherwise specified in the applicable pricing supplement, interest
on each series of notes that bears interest at floating rates will be payable on
the date(s) as set forth below (each, an "interest payment date" with respect to
such series of notes that bears interest at floating rates). Unless otherwise
specified in the applicable pricing supplement, the record date will be the day
that is 15 calendar days preceding the applicable interest payment date, whether
or not a business day. Unless otherwise specified in the applicable pricing
supplement, the interest payment dates will be, in the case of a series of
floating rate notes which reset:
o daily, weekly or monthly--the third Wednesday of each month or on the
third Wednesday of every third calendar month, beginning in the third
calendar month following the date the applicable series of notes was
issued;
o quarterly--the third Wednesday of every third calendar month,
beginning in the third calendar month following the date the
applicable series of notes was issued;
o semiannually--the third Wednesday of the two months of each year
specified in the applicable pricing supplement; and
o annually--the third Wednesday of the month of each year specified in
the applicable pricing supplement.
In addition, the maturity date will also be an interest payment date.
Unless otherwise provided in the applicable pricing supplement, if any
interest payment date other than the maturity date for any series of floating
rate notes would otherwise be a day that is not a business day, such interest
payment date will be postponed to the next succeeding business day, except that
in the case of a series of floating rate notes as to which LIBOR is an
applicable interest rate basis and that business day falls in the next
succeeding calendar month, the particular interest
S-26
payment date will be the immediately preceding business day. If the maturity
date of a series of floating rate notes falls on a day that is not a business
day, the issuing trust will make the required payment of principal, premium, if
any, and interest or other amounts on the next succeeding business day, and no
additional interest will accrue in respect of the payment made on that next
succeeding business day.
All percentages resulting from any calculation on floating rates will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards. For example, 9.876545% (or
..09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used
in or resulting from any calculation on floating rates will be rounded to the
nearest cent.
With respect to each series of floating rate notes, accrued interest is
calculated by multiplying the principal amount of such series of floating rate
notes by an accrued interest factor. The accrued interest factor is computed by
adding the interest factor calculated for each day in the particular interest
period. The interest factor for each day will be computed by dividing the
interest rate applicable to such day by 360, in the case of a series of floating
rate notes as to which the CD Rate, the Commercial Paper Rate, the Federal Funds
Rate, LIBOR or the Prime Rate is an applicable interest rate basis, or by the
actual number of days in the year, in the case of a series of floating rate
notes as to which the CMT Rate or the Treasury Rate is an applicable interest
rate basis. In the case of a series of notes that bears interest at floating
rates as to which the Constant Maturity Swap Rate is the interest rate basis,
the interest factor will be computed by dividing the number of days in the
interest period by 360 (the number of days to be calculated on the basis of a
year of 360 days with 12 30-day months (unless (i) the last day of the interest
period is the 31st day of a month but the first day of the interest period is a
day other than the 30th or 31st day of a month, in which case the month that
includes that last day shall not be considered to be shortened to a 30-day
month, or (ii) the last day of the interest period is the last day of the month
of February, in which case the month of February shall not be considered to be
lengthened to a 30-day month)). The interest factor for a series of floating
rate notes as to which the interest rate is calculated with reference to two or
more interest rate bases will be calculated in each period in the same manner as
if only the applicable interest rate basis specified in the applicable pricing
supplement applied.
The calculation agent shall determine the rate derived from each interest
rate basis in accordance with the following provisions.
CD Rate
"CD Rate" means:
(1) the rate on the particular interest determination date for negotiable
United States dollar certificates of deposit having the index maturity
specified in the applicable pricing supplement as published in
H.15(519) (as defined below) under the caption "CDs (secondary
market);" or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date for negotiable United
States dollar certificates of deposit of the particular index maturity
as published in H.15 Daily Update (as defined below), or other
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "CDs (secondary market);" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on that interest
determination date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York
(which may include the Purchasing Agent or its affiliates) selected by
the calculation agent (after consultation with Allstate Life) for
negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States
certificates of deposit with a remaining maturity closest to the
particular index maturity in an amount that is representative for a
single transaction in that market at that time; or
(4) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (3), the CD Rate in effect on the particular
interest determination date; provided that if no CD Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
S-27
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/H15/update, or any successor site or
publication.
CMT Rate
"CMT Rate" means:
(1) if Reuters Page FRBCMT is specified in the applicable pricing
supplement:
(a) the percentage equal to the yield for United States Treasury
securities at "constant maturity" having the index maturity
specified in the applicable pricing supplement as published in
H.15(519) under the caption "Treasury constant maturities," as
the yield is displayed on the Reuters Service ("Reuters") (or any
successor service) on page FRBCMT (or any other page as may
replace the specified page on that service) ("Reuters Page
FRBCMT"), for the particular interest determination date; or
(b) if the rate referred to in clause (a) does not so appear on
Reuters Page FRBCMT or is not so published by 3:00 P.M., New York
City time, on that interest determination date, the percentage
equal to the yield for United States Treasury securities at
"constant maturity" having the particular index maturity and for
the particular interest determination date as published in
H.15(519) under the caption "Treasury constant maturities;" or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519) or is not so published by 3:00 P.M., New York City
time, on that interest determination date, the rate on the
particular interest determination date for the period of the
particular index maturity as may then be published by either the
Federal Reserve System Board of Governors or the United States
Department of the Treasury that the calculation agent determines
to be comparable to the rate formerly displayed on Reuters and
published in H.15(519); or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular interest determination date calculated by
the calculation agent as a yield to maturity based on the
arithmetic mean of the secondary market offered rates at
approximately 3:30 P.M., New York City time, on that interest
determination date reported, based on their written records, by
three leading primary United States government securities dealers
in The City of New York (which may include the Agents or their
affiliates) (each, a "reference dealer"), selected by the
calculation agent (after consultation with Allstate Life)from
five reference dealers so selected by the calculation agent and
eliminating the highest quotation, or, in the event of equality,
one of the highest and the lowest quotation or, in the event of
equality, one of the lowest, for the most recently issued United
States Treasury securities with an original maturity of
approximately the particular index maturity, a remaining term to
maturity no more than one year shorter than that index maturity
and in a principal amount that is representative for a single
transaction in the securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be
eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular interest determination
date calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 P.M., New York City time, on that
interest determination date of three reference dealers selected
by the calculation agent (after consultation with Allstate Life)
from five reference dealers so selected by the calculation agent
and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for the most recently
issued United States Treasury securities with an original
maturity greater than the particular index maturity, a remaining
term to maturity closest to that index maturity and in a
principal amount that is representative for a single transaction
in the securities in that market at that time; or
S-28
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations will be
eliminated; or
(h) if fewer than three prices referred to in clause (f) are provided
as requested, the CMT Rate in effect on the particular interest
determination date; provided that if no CMT Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
(2) if Reuters Page FEDCMT is specified in the applicable pricing
supplement:
(a) the percentage equal to the one-week or one-month, as specified
in the applicable pricing supplement, average yield for United
States Treasury securities at "constant maturity" having the
index maturity specified in the applicable pricing supplement as
published in H.15(519) opposite the caption "Treasury constant
maturities," as the yield is displayed on Reuters (or any
successor service) (on page FEDCMT or any other page as may
replace the specified page on that service) ("Reuters Page
FEDCMT"), for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the
particular interest determination date falls; or
(b) if the rate referred to in clause (a) does not so appear on
Reuters Page FEDCMT or if not so published by 3:00 P.M., New York
City time, on that interest determination date, the percentage
equal to the one-week or one-month, as specified in the
applicable pricing supplement, average yield for United States
Treasury securities at "constant maturity" having the particular
index maturity and for the week or month, as applicable,
preceding the particular interest determination date as published
in H.15(519) opposite the caption "Treasury constant maturities;"
or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519) or if not so published by 3:00 P.M., New York City
time, on that interest determination date, the one-week or
one-month, as specified in the applicable pricing supplement,
average yield for United States Treasury securities at "constant
maturity" having the particular index maturity as otherwise
announced by the Federal Reserve Bank of New York for the week or
month, as applicable, ended immediately preceding the week or
month, as applicable, in which the particular interest
determination date falls; or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular interest determination date calculated by
the calculation agent as a yield to maturity based on the
arithmetic mean of the secondary market offered rates at
approximately 3:30 P.M., New York City time, on that interest
determination date reported based on their written records, by
three reference dealers selected by the calculation agent (after
consultation with Allstate Life) from five reference dealers so
selected by the calculation agent and eliminating the highest
quotation, or, in the event of equality, one of the highest and
the lowest quotation or, in the event of equality, one of the
lowest, for the most recently issued United States Treasury
securities with an original maturity of approximately the
particular index maturity, a remaining term to maturity no more
than one year shorter than that index maturity and in a principal
amount that is representative for a single transaction in the
securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be
eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular interest determination
date calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices
as of approximately 3:30 P.M., New York City time, on that
interest determination date of three reference dealers selected
by the calculation agent (after consultation with Allstate Life)
from five reference dealers so selected by the calculation agent
and eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in the
event of equality, one of the lowest, for the most recently
issued United States Treasury securities with an original
maturity greater than the particular index maturity, a remaining
term to maturity closest to that index
S-29
maturity and in a principal amount that is representative for a
single transaction in the securities in that market at the time;
or
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the particular
interest determination date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations will be
eliminated; or
(h) if fewer than three prices referred to in clause (f) are provided
as requested, the CMT Rate in effect on that interest
determination date; provided that if no CMT Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
If two United States Treasury securities with an original maturity greater
than the index maturity specified in the applicable pricing supplement have
remaining terms to maturity equally close to the particular index maturity, the
quotes for the United States Treasury security with the shorter original
remaining term to maturity will be used.
Commercial Paper Rate
"Commercial Paper Rate" means:
(1) the Money Market Yield (as defined below) on the particular interest
determination date of the rate for commercial paper having the index
maturity specified in the applicable pricing supplement as published
in H.15(519) under the caption "Commercial Paper--Nonfinancial;" or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Money
Market Yield of the rate on the particular interest determination date
for commercial paper having the particular index maturity as published
in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption
"Commercial Paper--Nonfinancial;" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on
that interest determination date of three leading dealers of United
States dollar commercial paper in The City of New York (which may
include the Purchasing Agent or its affiliates) selected by the
calculation agent (after consultation with Allstate Life) for
commercial paper having the particular index maturity placed for
industrial issuers whose bond rating is "Aa" by Moody's or the
equivalent from another nationally recognized statistical rating
organization; or
(4) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (3), the Commercial Paper Rate in effect on the
particular interest determination date; provided that if no Commercial
Paper Rate is then in effect, the interest rate that will be effective
as of the next interest reset date will be the initial interest rate.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------------------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable interest reset period.
Constant Maturity Swap Rate
"Constant Maturity Swap Rate" means:
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(1) the rate for U.S. Dollar swaps with the designated maturity specified
in the applicable pricing supplement, expressed as a percentage, which
appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City
time, on the particular interest determination date; or
(2) if the rate referred to in clause (1) does not appear on the Reuters
Screen TGM42276 by 2:00 P.M., New York City time, on such interest
determination date, a percentage determined on the basis of the
mid-market semi-annual swap rate quotations provided by the reference
banks (as defined below) as of approximately 11:00 A.M., New York City
time, on such interest determination date, and, for this purpose, the
semi-annual swap rate means the mean of the bid and offered rates for
the semi-annual fixed leg, calculated on a 30/360 day count basis, of
a fixed-for-floating U.S. Dollar interest rate swap transaction with a
term equal to the designated maturity specified in the applicable
pricing supplement commencing on the interest reset date and in a
representative amount (as defined below) with an acknowledged dealer
of good credit in the swap market, where the floating leg, calculated
on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with
a designated maturity specified in the applicable pricing supplement.
The calculation agent will request the principal New York City office
of each of the reference banks to provide a quotation of its rate. If
at least three quotations are provided, the rate for that interest
determination date will be the arithmetic mean of the quotations,
eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest); or
(3) if such Constant Maturity Swap Rate is not determinable for a
particular interest determination date under clauses (1) and (2)
above, then such interest determination date shall be the first U.S.
Government Securities business day preceding the original interest
determination date for which the Constant Maturity Swap Rate can be
determined under clauses (1) and (2) above.
"U.S. Government Securities business day" means any day except for
Saturday, Sunday, or a day on which The Bond Market Association recommends that
the fixed income departments of its members be closed for the entire day for
purposes of trading in U.S. government securities.
"Representative amount" means an amount that is representative for a single
transaction in the relevant market at the relevant time.
"Reference banks" mean five leading swap dealers in the New York City
interbank market, selected by the calculation agent, after consultation with
Allstate Life.
Federal Funds Rate
"Federal Funds Rate" means:
(1) the rate as of the particular interest determination date for United
States dollar federal funds as published in H.15(519) under the
caption "EFFECT" and displayed on Reuters (or any successor service)
on page FEDFUNDS1 (or any other page as may replace the specified page
on that service) ("Reuters Page FEDFUNDS1"); or
(2) if the rate referred to in clause (1) does not so appear on Reuters
Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City
time, on the related calculation date, the rate as of the particular
interest determination date for United States dollar federal funds as
published in H.15 Daily Update, or such other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "Federal Funds (Effective);" or
(3) if such rate does not appear on Reuters Page FEDFUNDS1 or is not so
published by 5:00 P.M., New York City time, on the related calculation
date, the rate will be the rate for the first preceding day for which
such rate is set forth in H.15(519) under the caption "Federal Funds
(Effective)," as such rate is displayed on the Reuters Page FEDFUNDS1.
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LIBOR
"LIBOR" means:
(1) the rate for deposits in the LIBOR currency having the index maturity
specified in the applicable pricing supplement, commencing on the
related interest reset date, that appears on the LIBOR page as of
11:00 A.M., London time, on the particular interest determination
date; or
(2) if no rate appears on the particular interest determination date on
the LIBOR page as specified in clause (1), the rate calculated by the
calculation agent as the arithmetic mean of at least two offered
quotations obtained by the calculation agent after requesting the
principal London offices of each of four major reference banks (which
may include affiliates of the Agents), in the London interbank market
to provide the calculation agent with its offered quotation for
deposits in the LIBOR currency for the period of the particular index
maturity, commencing on the related interest reset date, to prime
banks in the London interbank market at approximately 11:00 A.M.,
London time, on that interest determination date and in a principal
amount that is representative for a single transaction in the LIBOR
currency in that market at that time; or
(3) if fewer than two offered quotations referred to in clause (2) are
provided as requested, the rate calculated by the calculation agent as
the arithmetic mean of the rates quoted at approximately 11:00 A.M.,
in the applicable principal financial center, on the particular
interest determination date by three major banks (which may include
affiliates of the Agents), in that principal financial center selected
by the calculation agent (after consultation with Allstate Life) for
loans in the LIBOR currency to leading European banks, having the
particular index maturity and in a principal amount that is
representative for a single transaction in the LIBOR currency in that
market at that time; or
(4) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (3), LIBOR in effect on the particular interest
determination date; provided that if no LIBOR is then in effect, the
interest rate that will be effective as of the next interest reset
date will be the initial interest rate.
"LIBOR currency" means the currency specified in the applicable pricing
supplement as to which LIBOR shall be calculated or, if no currency is
specified in the applicable pricing supplement, United States dollars.
"LIBOR page" means the display on Reuters (or any successor service) on the
page specified in the applicable pricing supplement (or any other page as
may replace that page on that service) for the purpose of displaying the
London interbank rates of major banks for the LIBOR currency.
"London banking day" means a day on which commercial banks are open for
business (including dealings in the LIBOR currency) in London.
Prime Rate
"Prime Rate" means:
(1) the rate on the particular interest determination date as published in
H.15(519) under the caption "Bank Prime Loan;" or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date as published in H.15 Daily
Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Bank
Prime Loan;" or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen US
PRIME 1 Page (as defined below) as the applicable bank's prime rate or
base lending rate as of 11:00 A.M., New York City time, on that
interest determination date; or
(4) if fewer than four rates referred to in clause (3) are so published by
3:00 P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the particular interest
determination date calculated by the calculation agent as the
arithmetic mean of the prime rates or base lending rates quoted on the
basis of the actual number of days in the year divided by a 360-day
year as of the close of business on that interest determination date
by three major banks (which may include affiliates of the Purchasing
Agent) in The City of New York selected by the calculation agent
(after consultation with Allstate Life); or
(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the particular
interest determination date; provided that if no Prime Rate is then in
effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
"Reuters Screen US PRIME 1 Page" means the display on Reuters (or any
successor service) on the "US PRIME 1" page (or any other page as may replace
that page on that service) for the purpose of displaying prime rates or base
lending rates of major United States banks.
Treasury Rate
"Treasury Rate" means:
(1) the rate from the auction held on the Treasury Rate interest
determination date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the index maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on
the display on Reuters (or any successor service) on page USAUCTION 10
(or any other page as may replace that page on that service) ("Reuters
USAUCTION 10") or page USAUCTION 11 (or any other page as may replace
that page on that service) ("Reuters USAUCTION 11"); or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Bond
Equivalent Yield (as defined below) of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High;" or
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(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills
as announced by the United States Department of the Treasury; or
(4) if the rate referred to in clause (3) is not so announced by the
United States Department of the Treasury, or if the Auction is not
held, the Bond Equivalent Yield of the rate on the particular interest
determination date of the applicable Treasury Bills as published in
H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(5) if the rate referred to in clause (4) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date of the applicable Treasury
Bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(6) if the rate referred to in clause (5) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the particular interest determination date calculated by the
calculation agent as the Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New
York City time, on that interest determination date, of three primary
United States government securities dealers (which may include the
Purchasing Agent or its affiliates) selected by the calculation agent
(after consultation with Allstate Life), for the issue of Treasury
Bills with a remaining maturity closest to the index maturity
specified in the applicable pricing supplement; or
(7) if the dealers so selected by the calculation agent are not quoting as
mentioned in clause (6), the Treasury Rate in effect on the particular
interest determination date; provided that if no Treasury Rate is then
in effect, the interest rate that will be effective as of the next
interest reset date will be the initial interest rate.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D x N x 100
-------------------------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
interest reset period.
Discount Notes
The trusts may from time to time issue series of notes ("discount notes")
that have an issue price (as specified in the applicable pricing supplement)
that is less than 100% of the principal amount thereof (i.e. par) by more than a
percentage equal to the product of 0.25% and the number of full years to the
stated maturity date. A series of discount notes may not bear any interest
currently or may bear interest at a rate that is below market rates at the time
of issuance. The difference between the issue price of a series of discount
notes and par is referred to as the "discount." In the event of redemption,
repayment or acceleration of maturity of a series of discount notes, the amount
payable to the holders of such series of discount notes will be equal to the sum
of:
o the issue price (increased by any accruals of discount) and, in the
event of any redemption of such series of discount notes, if
applicable, multiplied by the initial redemption percentage (as
adjusted by the annual redemption percentage reduction, if
applicable); and
o any unpaid interest accrued on such series of discount notes to the
date of the redemption, repayment or acceleration of maturity, as the
case may be.
For purposes of determining the amount of discount that has accrued as of
any date on which a redemption, repayment or acceleration of maturity occurs for
a series of discount notes, a discount will be accrued using a constant yield
method. The constant yield will be calculated using a 30-day month, 360-day year
convention, a compounding period that, except for the initial period (as defined
below), corresponds to the shortest period between interest payment dates for
the applicable series of discount notes (with ratable accruals within a
compounding period), a coupon rate equal to the initial
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coupon rate applicable to the applicable series of discount notes and an
assumption that the maturity of such series of discount notes will not be
accelerated. If the period from the date of issue to the first interest payment
date for a series of discount notes (the "initial period") is shorter than the
compounding period for such series of discount notes, a proportionate amount of
the yield for an entire compounding period will be accrued. If the initial
period is longer than the compounding period, then the period will be divided
into a regular compounding period and a short period with the short period being
treated as provided in the preceding sentence. The accrual of the applicable
discount may differ from the accrual of original issue discount for purposes of
the Code, certain series of discount notes may not be treated as having original
issue discount within the meaning of the Code, and certain series of notes other
than discount notes may be treated as issued with original issue discount for
federal income tax purposes. See "United States Federal Income Tax
Considerations."
Withholding Tax; No Payment of Additional Amounts
All amounts due in respect of the notes of a series will be made without
withholding or deduction for or on account of any present or future taxes,
duties, levies, assessments or other governmental charges of whatever nature
imposed or levied by or on behalf of any governmental authority in the United
States having the power to tax on payments on the notes unless the withholding
or deduction is required by law. An issuing trust will not pay any additional
amounts to holders of any series of notes in the event that any withholding or
deduction is so required by law, regulation or official interpretation thereof,
and the imposition of a requirement to make any such withholding or deduction
will not give rise to any independent right or obligation to redeem the notes of
such series.
Security; Non-Recourse Obligations
The notes of a series will represent the obligations of the issuing entity
only and will not represent the obligations of, or interest in, any other person
or entity, Global Funding, Allstate Life or any of their respective affiliates.
The obligations under each series of notes will be secured by all of the rights
and title of the issuing trust in one or more funding agreements issued by
Allstate Life and other rights and assets included in the applicable collateral
held in the issuing trust.
The issuing trust will, from time to time and upon advice of counsel, at
the trust's expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement or other paper and take any other
action, (including, without limitation, any filings of financing or continuation
statements) that from time to time may be necessary or desirable, or that the
indenture trustee may reasonably request, in order to create, preserve, perfect,
confirm or validate a security interest or to enable the holder of its series of
notes to obtain the full benefits of the applicable indenture, or to enable the
indenture trustee to exercise and enforce any of its rights, powers and remedies
under the indenture with respect to the applicable collateral. To the extent
permitted by applicable law, the issuing trust will authorize the indenture
trustee to execute and file financing statements or continuation statements
without the trust's signature appearing thereon and will agree that a carbon,
photographic, photostatic or other reproduction of the applicable indenture or
of a financing statement is sufficient as a financing statement. The issuing
trust shall pay the costs of, or incidental to, any recording or filing of any
financing or continuation statements concerning any of the applicable
collateral.
Since Allstate Life will be the sole obligor under the funding agreements,
the ability of a trust to meet its obligations, and your ability to receive
payments from such trust, with respect to a particular series of notes, will be
principally dependent upon Allstate Life's ability to perform its obligations
under each applicable funding agreement held by the issuing trust. Despite this,
you will have no direct contractual rights against Allstate Life under any such
funding agreement. Pursuant to the terms of each funding agreement, recourse
rights to Allstate Life will belong to the issuing trust, its successors and
permitted assignees. In connection with the offering and sale of a series of
notes, the issuing trust will pledge, collaterally assign and grant a security
interest in the collateral for such series of notes to the indenture trustee for
the benefit of the holders of the applicable series of notes and any other
person for whose benefit the indenture trustee is or will be holding the
collateral. Accordingly, recourse to Allstate Life under each such funding
agreement will be enforceable only by the indenture trustee as a secured party
for the benefit of holders of such series of notes and any other person for
whose benefit the indenture trustee is or will be holding the collateral.
Nonetheless, since Allstate Life is a registrant, purchasers of notes may
be able to proceed directly against Allstate Life to enforce their rights under
the Federal securities laws and their rights under the Federal securities laws
will be no different than if they purchased the underlying funding agreements
directly from Allstate Life.
Survivor's Option
The "survivor's option" is a provision in a note pursuant to which the
issuing trust agrees to repay that note in whole or in part prior to maturity,
if requested, following the death of the beneficial owner of the note, so long
as the note was held
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by the beneficial owner for a period of at least six months prior to the death
of the beneficial owner. Unless otherwise specified in the applicable pricing
supplement, the estate of the deceased beneficial owner of a note will be
eligible to exercise the survivor's option.
Subject to the limitations described below, upon the valid exercise of the
survivor's option, the proper tender of that note for repayment and the tender
and acceptance of that portion of the funding agreement(s) related to such note,
the issuing trust will repay any of its notes pursuant to the survivor's option
by or on behalf of a person that has the legal authority to act on behalf of the
note's deceased owner. Unless otherwise specified in the applicable pricing
supplement, the repurchase price will be 100% of the unpaid principal amount
plus accrued interest to, but excluding, the date of repayment.
Unless otherwise set forth in the applicable pricing supplement for your
series of notes, the funding agreement(s) securing your series of notes will
contain a provision which will allow the issuing trust to tender the funding
agreement(s) in whole or in part to Allstate Life. An issuing trust's ability to
tender the funding agreement(s) related to a series of notes that contain a
survivor's option will be subject to certain limitations set by Allstate Life.
As a result, your right to exercise the survivor's option is subject to limits
set by Allstate Life with respect to the relevant funding agreement(s). Allstate
Life has the discretionary right to limit the aggregate principal amount of:
o all funding agreements securing all outstanding series of notes issued
under the Allstate Life(R) CoreNotes(R) program as to which exercises
of any put option by any issuing trust shall be accepted by Allstate
Life in any calendar year to an amount equal to the greater of
$2,000,000 or 2% of the aggregate principal amount of all funding
agreements securing all outstanding series of notes issued under the
Allstate Life(R) CoreNotes(R) program as of the end of the most recent
calendar year or such other greater amount as determined in accordance
with the applicable funding agreement(s) and set forth in the
applicable pricing supplement;
o the funding agreement(s) securing the notes as to which exercises of
any put option by the applicable trust attributable to notes as to
which the survivor's option has been exercised by the authorized
representative of any individual deceased beneficial owner to $250,000
in any calendar year or such other greater amount as determined in
accordance with the applicable funding agreement(s) and set forth in
the applicable pricing supplement; and
o the funding agreement(s) securing a series of notes as to which
exercises of any put option by the applicable trust shall be accepted
in any calendar year to an amount as set forth in the applicable
funding agreement(s) and the applicable pricing supplement.
In any such event, each trust shall similarly be required to limit the
aggregate principal amount of notes as to which exercises of the survivor's
option shall be accepted by it.
In addition, the exercise of the survivor's option will not be permitted
for a principal amount less than $1,000 or if such exercise will result in a
note with a principal amount of less than $1,000 to remain outstanding. All
other questions, other than with respect to the right to limit the aggregate
principal amount of notes subject to the survivor's option that will be accepted
as to any series of notes or in any calendar year, regarding the eligibility or
validity of any exercise of the survivor's option will be determined by the
administrator of the issuing trust, in its sole discretion, which determination
will be final and binding on all parties. The indenture trustee, upon written
request by the authorized representative of the deceased beneficial owner of
notes, will request the administrator to provide the status of the remaining
program and series limitations for such calendar year on the exercise of any
survivor's option.
The issuing trust will accept elections to exercise the survivor's option
in the order received by the administrator of the issuing trust. Notes that are
not repaid in any calendar year due to the application of the limits described
above will be treated as though they had been tendered on the first day of the
following calendar year in the order in which they were originally tendered.
Subject to the limitations described above, notes accepted for repayment will be
repaid on the first interest payment date that occurs 20 or more calendar days
after the date of acceptance.
If repayment of a note submitted for repayment pursuant to a valid exercise
of the survivor's option is not accepted or is to be delayed, the administrator
of the issuing trust will deliver a written notice by first-class mail to the
depositary that states the reason that repayment of that particular note has not
been accepted or will be delayed.
A valid exercise of the survivor's option may not be withdrawn.
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To exercise the survivor's option with respect to a book-entry note, the
deceased owner's authorized person must provide the following items to the DTC
"participant" through which the relevant beneficial interest is owned (for a
discussion of DTC and its participants, see "--About the Depositary"):
o a written instruction to the participant to notify DTC of the
authorized person's desire to obtain a payment pursuant to the
exercise of the survivor's option;
o appropriate evidence (a) that the person has authority to act on
behalf of the deceased owner, (b) of the death of the beneficial
owner, (c) that the deceased was the beneficial owner of the notes at
the time of death and (d) that the beneficial owner acquired the
interest in the note at least six months prior to the date of death of
such beneficial owner;
o if the beneficial interest in the relevant note is held by a nominee
of the deceased owner, a certificate from the nominee attesting to the
deceased owner's ownership of a beneficial interest in that note;
o a written request for repayment signed by the authorized person for
the deceased owner with signature guaranteed by a member firm of a
registered national securities exchange or of the National Association
of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States;
o if applicable, a properly executed assignment or endorsement;
o tax waivers and any other instruments or documents reasonably required
to establish the validity of the ownership of the beneficial interest
in the related note and the claimant's entitlement to payment; and
o any additional information reasonably required to document the
ownership or authority to exercise the survivor's option and to cause
the repayment of the related note.
In turn, on the basis of this information, the participant will be required
to deliver to the indenture trustee a properly completed repayment election form
to exercise the survivor's option, together with evidence satisfactory to the
indenture trustee from the participant stating that it represents the deceased
owner of the beneficial interest in the relevant note. The indenture trustee
will then deliver these items to the administrator of the issuing trust and will
provide the administrator of the issuing trust with any additional information
(after receipt from the participant) the administrator may request in connection
with such exercise.
Apart from Allstate Life's discretionary right to limit the principal
amount of funding agreements securing notes as to which exercises of any put
option by the issuing trusts attributable to notes to which the survivor's
option may be exercised in any calendar year as described above, the
administrator will determine all other questions regarding the eligibility or
validity of any exercise of the survivor's option. The administrator's
determination will be final and binding on all parties.
The death of a person owning a note in joint tenancy or tenancy by the
entirety with another or others will be treated as the death of the owner of
that note, and the entire principal amount so owned will be eligible for
repayment.
The death of a person owning a note by tenancy in common will be treated as
the death of the owner of that note only with respect to the deceased owner's
interest in the note held by tenancy in common. However, if a note is held by
husband and wife as tenants in common, the death of either spouse will be
treated as the death of the owner of the note and the entire principal amount so
owned will be eligible for repayment.
The death of a person who was a lifetime beneficiary of a trust that owns a
note will be treated as the death of the owner of the note to the extent of that
person's interest in the trust. The death of a person who was a tenant by the
entirety or joint tenant in a tenancy which is the beneficiary of a trust that
owns a note will be treated as the death of the owner of the note. The death of
an individual who was a tenant in common in a tenancy which is the beneficiary
of a trust that owns a note will be treated as the death of the owner of the
note only with respect to the deceased person's beneficial interest in the note,
unless a husband and wife are the tenants in common, in which case the death of
either will be treated as the death of the owner of the note.
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The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial interests of ownership of a note will be
treated as the death of the owner of the note if the beneficial interest can be
established to the administrator's satisfaction. This will be done in typical
cases of nominee ownership, such as ownership under the Uniform Transfers of
Gifts to Minors Act, community property or other joint ownership arrangements
between a husband and wife and lifetime custodial and trust arrangements.
The applicable participant will be responsible for disbursing payments
received from the indenture trustee to the authorized person for the deceased
owner.
Annex A to this prospectus supplement is the repayment election form for
use by DTC participants in exercising the survivor's option. Copies of this form
may be obtained from the administrator at AMACAR Pacific Corp., 6525 Morrison
Blvd., Suite 318, Charlotte, NC 28211 (telephone (704) 365-0569, facsimile (704)
365-1632).
Redemption, Repayment and Repurchase of Notes
Unless otherwise specified in the applicable pricing supplement, the notes
of a series will not be redeemable, except at the applicable maturity date, when
all notes of such series will be redeemed.
Optional Redemption by the Issuer; No Sinking Fund
If an initial redemption date is specified in the applicable pricing
supplement and provided for in the applicable funding agreement(s), the issuing
trust may redeem the particular series of notes prior to its stated maturity
date at its option on any date on or after that initial redemption date in whole
or from time to time in part in increments of $1,000 or any other integral
multiple of an authorized denomination specified in the applicable pricing
supplement (provided that any remaining principal amount thereof shall be at
least $1,000 or other minimum authorized denomination applicable thereto), at
the applicable redemption price (as defined below), together with unpaid
interest accrued thereon to the date of redemption. "Redemption price," with
respect to a series of notes, means an amount equal to the initial redemption
percentage specified in the applicable pricing supplement (as adjusted by the
annual redemption percentage reduction, if applicable) multiplied by the unpaid
principal amount thereof to be redeemed. The initial redemption percentage, if
any, applicable to a series of notes shall decline at each anniversary of the
initial redemption date by an amount equal to the applicable annual redemption
percentage reduction, if any, until the redemption price is equal to 100% of the
unpaid amount thereof to be redeemed. For a discussion of the redemption of
discount notes, see "--Discount Notes."
No series of notes will be subject to, or entitled to the benefit of, any
sinking fund unless otherwise indicated in the applicable pricing supplement.
The applicable pricing supplement may provide that the notes of a series
may be redeemed by the issuing trust and the terms of such redemption. If so
specified, the issuing trust will give a notice of redemption to each holder of
the notes to be redeemed not less than 30 days nor more than 60 days prior to
the date fixed for redemption.
Each trust may issue a series of notes which may be redeemed by the issuing
trust when 25% or more of the original principal balance of such notes is
outstanding, which are referred to herein as "callable" notes. If a trust issues
a series of callable notes, such trust will include the word "callable" in the
title of such series of notes in the applicable pricing supplement. Unless
otherwise specified in the applicable pricing supplement, such series of notes
will otherwise be subject to the redemption provisions described above.
Repayment at Option of Holder
Except for the survivor's option, the notes of a series will not provide
any holder with the option to have the issuing trust repay the note on a date or
dates specified prior to its maturity date. If the applicable pricing supplement
specifies that a particular series of notes will have a survivor's option, the
relevant funding agreement will provide for such pre-payment of amounts due
under the notes.
None of the trusts will issue notes that may be repaid at the option of the
holders prior to the stated maturity date if such issuance would cause the
relevant trust to fail to satisfy the applicable requirements for exemption
under Rule 3a-7 under the Investment Company Act of 1940, as amended, and all
applicable rules, regulations and interpretations thereunder.
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Repurchase of Notes
Each trust may purchase some or all notes of a series issued by such trust
in the open market or otherwise at any time, and from time to time, with the
prior written consent of Allstate Life as to both the making of such purchase
and the purchase price to be paid for such notes. If Allstate Life, in its sole
discretion, consents to such purchase of notes by the issuing trust, then such
trust, the indenture trustee and Allstate Life will be obligated to take such
actions as may be necessary or desirable to effect the prepayment of such
portion, or the entirety, of the current Principal Amount (as defined in the
applicable funding agreement) under each applicable funding agreement as may be
necessary to provide for the payment of the purchase price for such notes. Upon
such payment, the Principal Amount under each funding agreement shall be reduced
by an amount equal to the aggregate principal amount of the notes as purchased
(or the portion thereof applicable to such funding agreement).
Other/Additional Provisions; Addendum
Any provisions with respect to the notes of a series, including the
specification and determination of one or more interest rate bases, the
calculation of the interest rate applicable to a series of notes that bears
interest at floating rates, the interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other term relating to the
applicable series of notes, may be modified and/or supplemented as specified
under "Other/Additional Provisions" on the face thereof or in an addendum
relating thereto, if so specified on the face thereof and, in each case,
described in the applicable pricing supplement.
Book-Entry Notes
Each trust will establish a depositary arrangement with DTC with respect to
the book-entry notes, the terms of which are summarized below.
All book-entry notes having the same terms will be represented by one or
more global securities. Each global security will be deposited with, or on
behalf of, DTC and will be registered in the name of DTC or its nominee. No
global security may be transferred or exchanged except by DTC or a nominee of
DTC to DTC or to another nominee of DTC, or by DTC or another nominee of DTC to
a successor of DTC or a nominee of a successor to DTC. So long as DTC or its
nominee is the registered holder of a global security, DTC or its nominee will
be the sole owner of the related book-entry notes for all purposes under the
indenture. Except as otherwise provided below, the beneficial owners of the
book-entry notes will not be entitled to receive definitive notes and will not
be considered the registered holders of the book-entry notes for any purpose
under the indenture and no global security representing book-entry notes will be
exchangeable or transferable. As a result, to exercise any rights of a
registered holder under the indenture a beneficial owner must rely on the
procedures of DTC and, if the beneficial owner is not a participant, on the
procedures of the participant or participants through which the beneficial owner
owns its interest. The laws of some jurisdictions require that some purchasers
of securities take physical delivery of securities in definitive form. These
laws may limit the ability to transfer beneficial interests in book-entry notes.
Each global security representing book-entry notes will be exchangeable for
definitive notes only if:
o subject to the procedures of DTC, the issuing trust notifies the
indenture trustee that the issuing trust wishes in its sole discretion
to exchange the global security for definitive notes;
o an event of default on the notes of that series has occurred and not
been cured; or
o DTC notifies the issuing trust that it is unwilling or unable to
continue as a clearing system for the global securities, or it ceases
to be a clearing agency registered under the Exchange Act and, in
either case, a successor clearing system is not appointed by the
issuing trust within 60 days after receiving the notice from DTC or
becoming aware that DTC is no longer registered.
If any of these events occurs, the issuing trust will print and deliver
definitive notes. Definitive notes issued under these circumstances will be
registered in the names of the beneficial owners of the related global
securities as provided to the indenture trustee by the participants identified
by DTC.
About the Depositary
The following is based on information furnished by DTC:
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DTC will act as securities depository for the book-entry notes. The
book-entry notes will be issued as fully registered securities in the name of
Cede & Co. (DTC's nominee) or another name requested by DTC. One fully
registered global security will be issued for each issue of book-entry notes in
the aggregate principal amount of that issue and will be deposited with, or on
behalf of, DTC. If the aggregate principal amount of any issue exceeds DTC's
limit for a single global security, then the global securities will be issued in
the form of one or more global securities having a principal amount equal to
DTC's limit and an additional global security representing any remaining
principal amount.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its direct participants deposit with it. DTC also
facilitates the settlement among direct participants of transactions in
deposited securities, such as transfers and pledges, through electronic
computerized book-entry changes in direct participants' accounts. This
eliminates the need for physical movement of securities certificates. DTC's
direct participants include securities brokers and dealers (including the
Purchasing Agent), banks, trust companies, clearing corporations and other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC and NASD. Access
to DTC's system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly. The rules
applicable to DTC and its direct and indirect participants are on file with the
SEC.
Under DTC's system, purchases of book-entry notes must be made by or
through direct participants, which will receive a credit for the book-entry
notes on DTC's records. The ownership interest of the actual purchaser is in
turn recorded on the records of the direct and indirect participants. Beneficial
owners will not receive written confirmation from DTC of their purchase, but are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct or indirect
participants through which they entered into the transaction. Transfers of
ownership interests in book-entry notes are accomplished by entries made on the
books of the direct and indirect participants acting on behalf of the beneficial
owners. Beneficial owners will not receive definitive notes unless use of the
book-entry system is discontinued as described above.
To facilitate subsequent transfers, all global securities representing the
book-entry notes deposited with, or on behalf of, DTC will be registered in the
name of DTC's nominee, Cede & Co., or any other name that DTC requests. The
deposit of global securities with, or on behalf of, DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the book-entry notes; DTC's records
reflect only the identity of the direct participants to whose accounts the
book-entry notes are credited, which may or may not be the beneficial owners.
DTC's participants are responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications from DTC to direct
participants, from direct participants to indirect participants and from direct
participants and indirect participants to beneficial owners are governed by
arrangements among them and are subject to statutory and regulatory
requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to global
securities. Under its usual procedures, DTC mails an omnibus proxy to a company
as soon as possible after a record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
book-entry notes are credited on the record date (identified in a listing
attached to the omnibus proxy).
The issuing trust will make payments on the global securities in
immediately available funds to Cede & Co. or any other nominee named by DTC.
DTC's practice is to credit direct participants' accounts on the applicable
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on that date.
Payments by participants to beneficial owners are governed by standing
instructions and customary practices and are subject to statutory and regulatory
requirements. The issuing trust and the trustee are responsible only for making
payments to DTC, DTC is responsible for disbursing those payments to its direct
participants and the direct participants (and any indirect participants) are
solely responsible for disbursing those payments to the beneficial owners.
Any redemption notices will be sent to Cede & Co. If less than all of the
book-entry notes having the same terms are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each direct
participant in those notes to be redeemed.
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A beneficial owner must give notice of any election to have its book-entry
notes repaid through its participant to the trustee. Delivery of the book-entry
notes will be effected by causing the relevant direct participant to transfer
the relevant part of its interest in the global securities to the trustee on
DTC's records.
DTC may discontinue providing its services as securities depository with
respect to a series of notes at any time by giving reasonable notice to the
issuing trust or the indenture trustee. If the issuing trust does not obtain a
successor securities depository, it will print and deliver definitive notes of
such series.
The issuing trust may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). If the issuing
trust does so, it will print and deliver definitive notes.
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DESCRIPTION OF THE FUNDING AGREEMENTS
Each trust will use the net proceeds from the issuance of its series of
notes to the public to purchase from Global Funding one or more funding
agreements issued by Allstate Life. The funding agreement(s) will have a
principal amount equal to the principal amount of the related series of notes.
The funding agreement(s) will otherwise have payment and other terms
substantially similar to the related series of notes. The funding agreement(s)
may be interest bearing or non-interest bearing and, if interest bearing, may
bear interest at fixed or floating rates. The calculation of the interest rate,
the due dates for payments and other payment terms on the funding agreement will
be determined in the manner substantially similar to that described above under
"Description of the Notes." An amount equal to the principal amount of the
funding agreement plus accrued but unpaid interest, if any, and accrued
discount, if any (in the case of a discount funding agreement) will be payable
on its maturity date, as specified in the applicable pricing supplement.
The funding agreement(s) will have a principal amount equal to the
principal amount of the related series of notes. The funding agreement(s) will
otherwise have payment and other terms substantially similar to the related
series of notes. For a more detailed discussion of the funding agreements, see
"Description of the Funding Agreements" in the accompanying prospectus.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
This section provides a discussion of the material United States Federal
income tax consequences of the purchase, ownership and disposition of the notes.
This summary is based upon laws, regulations, rulings and decisions now in
effect, all of which are subject to change (including changes in effective
dates) or possible differing interpretations. This summary deals only with notes
held as capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, partnerships, insurance companies,
regulated investment companies, dealers in securities or currencies, persons
holding notes as a hedge against currency risks or as a position in a "straddle"
for tax purposes, or persons whose functional currency is not the United States
dollar. It also does not deal with holders other than initial purchasers of
notes (except where otherwise specifically noted). Persons considering the
purchase of the notes should consult their own tax advisors concerning the
application of United States Federal income tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of the notes arising under the laws of any other taxing
jurisdiction. This summary does not consider the United States Federal income
tax consequences of the purchase, ownership or disposition of a note by a
partnership. If a partnership holds a note, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. Partnerships holding a note, and partners in a partnership holding
a note, should consult their tax advisors.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for United States Federal income tax purposes:
o a citizen or resident of the United States;
o a corporation (including an entity treated as a corporation for United
States Federal income tax purposes) created or organized in or under
the laws of the United States, any state thereof or the District of
Columbia;
o an estate whose income is subject to United States Federal income tax
regardless of its source; or
o subject to applicable transition rules, a trust if a court within the
United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have
the authority to control all substantial decisions of the trust.
As used in this section, the term "non-U.S. Holder" means a beneficial
owner of a note that is an individual, a corporation, an estate or trust that is
not a U.S. Holder.
Classification of the Issuer and Notes
In the opinion of LeBoeuf, Lamb, Greene & MacRae LLP, special tax counsel
to Global Funding, under current law and based on certain facts and assumptions
contained in such opinion:
o Global Funding and each trust will be ignored for United States
Federal income tax purposes and will not be treated as an association
or a publicly traded partnership taxable as a corporation; and
o the notes will be classified as indebtedness of Allstate Life for
United States Federal income tax purposes.
Allstate Life, Global Funding and each trust agree, and each holder and
beneficial owner of notes by purchasing the notes agrees, for all United States
Federal, state and local income and franchise tax purposes (i) to treat the
notes as indebtedness of Allstate Life, (ii) Global Funding and each trust will
be ignored and will not be treated as an association or a publicly traded
partnership taxable as a corporation and (iii) to not take any action
inconsistent with the treatment described in (i) and (ii) unless otherwise
required by law. The remainder of this discussion assumes the notes are properly
treated as indebtedness of Allstate Life for all United States Federal income
tax purposes.
An opinion of tax counsel is not binding on the Internal Revenue Service
(the "IRS") or the courts, and no ruling on any of the consequences or issues
discussed below will be sought from the IRS. The IRS might assert that each
trust should be treated as a separate grantor trust for United States Federal
income tax purposes, in which case the holders of beneficial interests in the
notes related to such trust would be treated as owning a pro rata undivided
interest in the assets of such trust. In such a case, the tax consequences to
beneficial owners of the notes would not be materially different than those
described herein. Persons considering the purchase of notes should consult their
own tax advisors about the United States Federal
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income tax consequences of an investment in the notes and the application of
United States Federal income tax laws, as well as the laws of any state, local
or foreign taxing jurisdictions, to their particular situations.
U.S. Holders
Payments of Interest
Except as described below, payments of interest on a note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
Discount Notes
The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of notes issued with original issue discount ("discount notes").
For United States Federal income tax purposes, original issue discount
("OID") is the excess of the stated redemption price at maturity of a note over
its issue price, if such excess equals or exceeds a de minimis amount (generally
1/4 of 1% of the note's stated redemption price at maturity multiplied by the
number of complete years to its maturity from its issue date or, in the case of
a note providing for the payment of any amount other than qualified stated
interest (as defined below) prior to maturity, multiplied by the weighted
average maturity of such note). The issue price of each note in an issue of
notes equals the first price at which a substantial amount of such notes has
been sold (ignoring sales to bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers). The stated redemption price at maturity of a note is the sum of
all payments provided by the note other than "qualified stated interest"
payments. The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt instruments
of the issuer) at least annually at a single fixed rate. In addition, if a note
bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on such note or any "true" discount on such note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then some or all of the stated interest on the note would be
treated as OID rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a discount note must include OID in income as
ordinary interest for United States Federal income tax purposes as it accrues
under a constant yield method in advance of receipt of the cash payments
attributable to such income, regardless of such U.S. Holder's regular method of
tax accounting. In general, the amount of OID included in income by the initial
U.S. Holder of a discount note is the sum of the daily portions of OID with
respect to such discount note for each day during the taxable year (or portion
of the taxable year) on which such U.S. Holder held such discount note. The
"daily portion" of OID on any discount note is determined by allocating to each
day in any accrual period a ratable portion of the OID allocable to that accrual
period. An "accrual period" may be of any length and the accrual periods may
vary in length over the term of the discount note, provided that each accrual
period is no longer than one year and each scheduled payment of principal or
interest occurs either on the final day of an accrual period or on the first day
of an accrual period. The amount of OID allocable to each accrual period is
generally equal to the difference between:
o the product of the discount note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined
on the basis of compounding at the close of each accrual period and
appropriately adjusted to take into account the length of the
particular accrual period); and
o the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of a discount note at the
beginning of any accrual period is the sum of the issue price of the
discount note plus the amount of OID allocable to all prior accrual
periods minus the amount of any prior payments on the discount note
that were not qualified stated interest payments. Under these rules,
U.S. Holders generally will have to include in income increasingly
greater amounts of OID in successive accrual periods.
A U.S. Holder who purchases a discount note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the discount note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the discount note at an "acquisition premium."
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Under the acquisition premium rules, the amount of OID which such U.S. Holder
must include in its gross income with respect to such discount note for any
taxable year (or portion thereof in which the U.S. Holder holds the discount
note) will be reduced (but not below zero) by the portion of the acquisition
premium properly allocable to the period.
Floating Rate Notes
Floating rate notes are subject to special rules whereby a floating rate
note will qualify as a "variable rate debt instrument" if:
o its issue price does not exceed the total noncontingent principal
payments due under the floating rate note by more than a specified de
minimis amount;
o it provides for stated interest, paid or compounded at least annually,
at current values of, one or more qualified floating rates, a single
fixed rate and one or more qualified floating rate, or a single
objective rate; and
o it does not provide for any principal payments which are contingent.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
floating rate note is denominated. Although a multiple of a qualified floating
rate will generally not itself constitute a qualified floating rate, a variable
rate equal to the product of a qualified floating rate and a fixed multiple that
is greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, two or more qualified floating rates that can reasonably be expected
to have approximately the same values throughout the term of the floating rate
note (e.g., two or more qualified floating rates with values within 25 basis
points of each other as determined on the floating rate note's issue date) will
be treated as a single qualified floating rate. Notwithstanding the foregoing, a
variable rate that would otherwise constitute a qualified floating rate but
which is subject to one or more restrictions such as a maximum numerical
limitation (i.e., a cap) or a minimum numerical limitation (i.e., a floor) may,
under certain circumstances, fail to be treated as a qualified floating rate
unless such cap or floor is fixed throughout the term of the note. An "objective
rate" is a rate that is not itself a qualified floating rate but which is
determined using a single fixed formula and that is based on objective financial
or economic information. A rate will not qualify as an objective rate if it is
based on information that is within the control of Allstate Life (or a related
party) or that is unique to the circumstances of Allstate Life (or a related
party), such as dividends, profits, or the value of Allstate Life's stock
(although a rate does not fail to be an objective rate merely because it is
based on the credit quality of Allstate Life). In addition, if a floating rate
note provides for stated interest at a fixed rate for an initial period of one
year or less followed by a variable rate that is either a qualified floating
rate or an objective rate and if the variable rate on the floating rate note's
issue date is intended to approximate the fixed rate (e.g., the value of the
variable rate on the issue date does not differ from the value of the fixed rate
by more than 25 basis points), then the fixed rate and the variable rate
together will constitute either a single qualified floating rate or objective
rate, as the case may be.
If a floating rate note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" and if the interest on
such note is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually, then all stated interest on the
note will constitute qualified stated interest and will be taxed accordingly.
Thus, a floating rate note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
and that qualifies as a "variable rate debt instrument" will generally not be
treated as having been issued with OID unless the floating rate note is issued
at a "true" discount (i.e., at a price below the note's stated principal amount)
in excess of a specified de minimis amount. The amount of qualified stated
interest and the amount of OID, if any, that accrues during an accrual period on
such a floating rate note is determined under the rules applicable to fixed rate
debt instruments by assuming that the variable rate is a fixed rate equal to:
o in the case of a qualified floating rate, the value, as of the issue
date, of the qualified floating rate; or
o in the case of an objective rate, a fixed rate that reflects the yield
that is reasonably expected for the floating rate note. The qualified
stated interest allocable to an accrual period is the amount of
interest actually paid during such accrual period.
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In general, any other floating rate note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of OID and
qualified stated interest on the floating rate note. A floating rate note is
converted into an "equivalent" fixed rate debt instrument by substituting any
qualified floating rate provided for under the terms of the floating rate note
with a fixed rate equal to the value of the qualified floating rate as of the
floating rate note's issue date. Any objective rate provided for under the terms
of the floating rate note is converted into a fixed rate that reflects the yield
that is reasonably expected for the floating rate note. In the case of a
floating rate note that qualifies as a "variable rate debt instrument" and
provides for stated interest at a single fixed rate in addition to either one or
more qualified floating rates or a qualified inverse floating rate, the fixed
rate is initially converted into a qualified floating rate. Under such
circumstances, the qualified floating rate that replaces the fixed rate must be
such that the fair market value of the floating rate note as of the floating
rate note's issue date is approximately the same as the fair market value of an
otherwise identical debt instrument that provides for either the qualified
floating rate rather than the fixed rate. Subsequent to converting the fixed
rate into either a qualified floating rate or a qualified inverse floating rate,
the floating rate note is then converted into an "equivalent" fixed rate debt
instrument in the manner described above.
Once the floating rate note is converted into an "equivalent" fixed rate
debt instrument pursuant to the foregoing rules, the amount of OID and qualified
stated interest, if any, are determined for the "equivalent" fixed rate debt
instrument by applying the general OID rules to the "equivalent" fixed rate debt
instrument. A U.S. Holder of the floating rate note will account for such OID
and qualified stated interest as if the U.S. Holder held the "equivalent" fixed
rate debt instrument. Each accrual period appropriate adjustments will be made
to the amount of qualified stated interest or OID assumed to have been accrued
or paid with respect to the "equivalent" fixed rate debt instrument in the event
that such amounts differ from the actual amount of interest accrued or paid on
the floating rate note during the accrual period.
If the floating rate note does not qualify as a "variable rate debt
instrument" then the floating rate note would be treated as a contingent payment
debt instrument. A U.S. Holder of a contingent payment debt instrument is
generally required to include future contingent and noncontingent interest
payments in income under the constant yield method as such interest accrues
based on Allstate Life's determination of the "comparable yield" and the
establishment of a "projected payment schedule" that must produce the comparable
yield. The comparable yield is the yield at which Allstate Life would issue a
fixed rated debt instrument with similar terms and conditions. The projected
payment schedule consists of all stated principal payments and a projected
amount and time for each contingent interest payment. If the actual amount of
any contingent payment, once determined, differs from the projected amounts,
appropriate adjustments are to be made to the amounts required to be included in
gross income by the U.S. Holder. The yield, timing and amounts set forth in the
projected payment schedule are for purposes of computing the OID only and are
not assurances by the trusts with respect to any aspect of the notes. Because
U.S. Holders will generally be bound by Allstate Life's determination of the
comparable yield and by the projected payment schedule for United States Federal
income tax purposes, a U.S. Holder's income inclusions may be accelerated
relative to the time payments under the notes are in fact made. The IRS has
authority to disregard a projected payment schedule it determines to be
unreasonable. Any gain recognized by a U.S. Holder on the sale, exchange, or
retirement of a contingent payment debt instrument will be treated as interest
income and all or a portion of any loss realized could be treated as ordinary
loss as opposed to capital loss (depending upon the circumstances). The United
States Federal income tax treatment of floating rate notes that are treated as
contingent payment debt instruments will be more fully described in the
applicable pricing supplement. Purchasers of contingent payment debt instruments
should carefully examine the applicable pricing supplement and should consult
their own tax advisor with respect to such notes.
Certain of the notes:
o may be redeemable at the option of the issuing trust prior to their
stated maturity (a "call option"); and/or
o may be repayable at the option of the holder prior to their stated
maturity (a "put option"). Notes containing such features may be
subject to rules that differ from the general rules discussed above.
Investors intending to purchase notes with such features should consult
their own tax advisors, since the OID consequences will depend, in part, on the
particular terms and features of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, OID, de minimis OID, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium) that accrues on a debt
instrument by using the constant yield method applicable to OID, subject to
certain limitations and exceptions.
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Short-Term Notes
Notes that have a fixed maturity of one year or less ("short-term
notes") will be treated as having been issued with OID. In general, an
individual or other cash method U.S. Holder is not required to accrue such OID
unless the U.S. Holder elects to do so. If such an election is not made, any
gain recognized by the U.S. Holder on the sale, exchange or maturity of the
short-term note will be ordinary income to the extent of the OID accrued on a
straight-line basis, or upon election under the constant yield method (based on
daily compounding), through the date of sale or maturity, and a portion of the
deductions otherwise allowable to the U.S. Holder for interest on borrowings
allocable to the short-term note will be deferred until a corresponding amount
of income is realized. U.S. Holders who report income for United States Federal
income tax purposes under the accrual method, and certain other holders
including banks and dealers in securities, are required to accrue OID on a
short-term note on a straight-line basis unless an election is made to accrue
the OID under a constant yield method (based on daily compounding).
Market Discount
If a U.S. Holder purchases a note, other than a discount note, for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or, in the case of a
discount note, for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased such
note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a discount note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a note as ordinary
income to the extent of the lesser of:
o the amount of such payment or realized gain; and
o the market discount which has not previously been included in income
and is treated as having accrued on such note at the time of such
payment or disposition.
Market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the note or
certain earlier dispositions, because a current deduction of such holder's "net
direct interest expense" is only allowed to the extent the interest expense
exceeds an allocable portion of market discount. Net direct interest expense is
the excess of interest paid or accrued to purchase or carry the market discount
note over the interest (including OID) includible in the purchaser's gross
income. A U.S. Holder may elect to include market discount in income currently
as it accrues (on either a ratable or semiannual compounding basis), in which
case the rules described above regarding the treatment as ordinary income of
gain upon the disposition of the note, the receipt of certain cash payments and
the deferral of interest deductions will not apply. Generally, such currently
included market discount is treated as ordinary interest for United States
Federal income tax purposes. Such an election will apply to all debt instruments
acquired by the U.S. Holder on or after the first day of the first taxable year
to which such election applies and may be revoked only with the consent of the
IRS.
Premium
If a U.S. Holder purchases a note for an amount that is greater than its
stated redemption price at maturity, such U.S. Holder will generally be
considered to have purchased the note with "amortizable bond premium" equal in
amount to such excess. A U.S. Holder may elect to amortize such premium using a
constant yield method over the remaining term of the note and may offset
interest otherwise required to be included in gross income in respect of the
note during any taxable year by the amortized amount of such excess for the
taxable year. However, if the note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the note. Any
election to amortize bond premium applies to all taxable debt instruments held
or acquired by the U.S. Holder on or after the first day of the first taxable
year to which such election applies and may be revoked only with the consent of
the IRS.
S-47
Disposition of a Note
Upon the sale, exchange, redemption, retirement or other disposition of a
note, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange, redemption,
retirement or other disposition (other than amounts representing accrued and
unpaid interest, which will constitute ordinary income) and such U.S. Holder's
adjusted tax basis in the note. A U.S. Holder's adjusted tax basis in a note
generally will equal such U.S. Holder's initial investment in the note increased
by any OID included in income (and accrued market discount, if any, if the U.S.
Holder has included such market discount in income) and decreased by the amounts
of any payments, other than qualified stated interest payments, received and the
amortizable bond premium taken into account with respect to such note. Such gain
or loss generally will be long-term capital gain or loss if the note were held
for more than one year. Non-corporate taxpayers are subject to reduced maximum
rates on long-term capital gains and are generally subject to tax at ordinary
income rates on short-term capital gains. The deductibility of capital losses is
subject to certain limitations. Prospective investors should consult their own
tax advisors concerning these tax law provisions.
If a U.S. Holder disposes of only a portion of a note pursuant to a partial
redemption or partial repayment (e.g., pursuant to the survivor's option, if
applicable), such disposition will be treated as a redemption or repayment of a
portion of a debt instrument. The resulting gain or loss would be calculated by
assuming that the original note being tendered consists of two instruments, one
that is retired (or repaid), and one that remains outstanding. The adjusted
issue price, the U.S. Holder's adjusted basis, and the accrued but unpaid OID of
the original note, if any, determined immediately before the disposition, would
be allocated between these two instruments based on the portion of the
instrument that is treated as retired by the redemption or repayment.
Non-U.S. Holders
Payments of interest (including OID, if any) on a note received by a
non-U.S. Holder that does not hold its notes in connection with the conduct of a
trade or business in the United States, will generally not be subject to United
States Federal withholding tax pursuant to the "Portfolio Interest Exemption"
unless:
o the non-U.S. Holder is a direct or indirect 10% or greater shareholder
of Allstate Life;
o the non-U.S. Holder is a controlled foreign corporation related to
Allstate Life;
o the non-U.S. Holder is a bank receiving interest described in section
881(c)(3)(A) of the Code; or
o interest on the note is contingent interest described in section
871(h)(4) of the Code.
To qualify for the Portfolio Interest Exemption from United States Federal
withholding tax, the last United States payor in the chain of payment prior to
payment to a non-U.S. Holder (the "withholding agent") must have received in the
year in which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that:
o is signed by the beneficial owner of the note under penalties of
perjury;
o certifies that such owner is not a U.S. Holder; and
o provides the name and address of the beneficial owner.
The statement may be made on an IRS Form W-8BEN or a substantially similar
form, and the beneficial owner must inform the withholding agent of any change
in the information on the statement within 30 days of such change. If a note is
held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the withholding agent. However, in such a case, the signed statement generally
must be accompanied by a copy of the IRS Form W-8BEN or the substitute form
provided by the beneficial owner to the organization or institution.
If a non-U.S. Holder cannot satisfy the requirements for eligibility for
the Portfolio Interest Exemption, interest earned by such non-U.S. Holder will
be subject to United States Federal withholding tax at a 30% rate unless the
non-U.S. Holder provides the withholding agent with a properly executed:
S-48
o IRS Form W-8BEN claiming an exemption from or reduction in withholding
under the benefit of a United States income tax treaty; or
o IRS Form W-8ECI stating that interest paid on the note is not subject
to withholding tax because it is effectively connected with the
non-U.S. Holder's conduct of a trade or business in the United States.
Notwithstanding the provision of IRS Form W-8ECI, a non-U.S. Holder that
holds its notes in connection with its conduct of a trade or business in the
United States will be taxed on its notes in the same manner as a U.S. Holder,
and, if such non-U.S. Holder is a foreign corporation, it may also be subject to
a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon the sale,
exchange, redemption, retirement or other disposition of a note, provided:
o the gain is not effectively connected with the conduct of a trade or
business in the United States by the non-U.S. Holder; and
o the non-U.S. Holder is not an individual who is present in the United
States for 183 days or more during the taxable year.
Certain other exceptions may be applicable, and a non-U.S. Holder should
consult its tax advisor in this regard.
The notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of Allstate
Life or, at the time of such individual's death, payments in respect of the
notes would have been effectively connected with the conduct by such individual
of a trade or business in the United States. If any portion of the interest
payable on the notes at the time of the individual's death was contingent
interest, then an appropriate portion of the value of the notes would be
includible in the estate of a non-U.S. Holder.
Backup Withholding and Information Reporting
Backup withholding of United States Federal income tax at the applicable
backup withholding rate may apply to payments made in respect of the notes to
registered owners who are not "exempt recipients" and who fail to provide
certain identifying information (such as the registered owner's taxpayer
identification number) in the required manner. Generally, individuals are not
exempt recipients, whereas corporations and certain other entities generally are
exempt recipients. Payments made in respect of the notes to a U.S. Holder must
be reported to the IRS, unless the U.S. Holder is an exempt recipient or
establishes an exemption. Compliance with the identification procedures
described in the preceding section would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold at the applicable backup withholding rate of the entire purchase
price, unless either the broker determines that the seller is a corporation or
other exempt recipient or the seller provides, in the required manner, certain
identifying information and, in the case of a non-U.S. Holder, certifies that
such seller is a non-U.S. Holder (and certain other conditions are met). Such a
sale must also be reported by the broker to the IRS, unless either the broker
determines that the seller is an exempt recipient or the seller certifies its
non-U.S. status (and certain other conditions are met). Certification of the
registered owner's non-U.S. status would be made normally on an IRS Form W-8BEN
under penalties of perjury, although in certain cases it may be possible to
submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
Opinion Regarding Tax Matters
Prior to the issuance of any notes, Allstate Life will file as an exhibit
to a Current Report on Form 8-K an opinion of legal counsel as described above
regarding the tax treatment of such notes.
S-49
PLAN OF DISTRIBUTION
The notes of a series will be offered to or through Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Purchasing Agent, pursuant to a terms agreement
among Global Funding, the issuing trust and the Purchasing Agent (each, a "terms
agreement") and the distribution agreement among Global Funding and the Agents
named therein, dated as of -, 2007 (the "distribution agreement"). Each terms
agreement will incorporate by reference the terms of the distribution agreement.
The Purchasing Agent may purchase notes, as principal, from a trust for resale
to investors at a fixed offering price or at varying prices relating to
prevailing market prices at the time of resale as determined by the Purchasing
Agent. The issuing trust may agree with the Purchasing Agent that the Purchasing
Agent will utilize its reasonable efforts on an agency basis on its behalf to
solicit offers to purchase notes of the applicable series at 100% of the
principal amount thereof, unless otherwise specified in the applicable pricing
supplement. Unless otherwise specified in the applicable pricing supplement,
each trust will pay a commission to the Purchasing Agent, ranging from .125% to
2.50% of the principal amount of each applicable note, depending upon its stated
maturity, for each note purchased from the issuing trust by the Purchasing Agent
as its agent. The notes may be sold in the United States to retail,
institutional and other investors.
Subject to the terms of the applicable terms agreement and the distribution
agreement, concurrently with any offering of a series of notes by a trust as
described in this prospectus supplement, the issuing trust and the other trusts
may issue other notes under this program or the related secured medium term note
program.
Each trust will use the net proceeds received from the issuance of the
related series of notes to purchase a funding note from Global Funding. Global
Funding will use the net proceeds received from the sale of such funding note to
purchase one or more funding agreements issued by Allstate Life. Global Funding
will immediately assign absolutely to, and deposit into, the issuing trust each
such funding agreement and the related funding note will be cancelled
immediately upon the assignment and deposit by Global Funding of such funding
agreement(s) to and into the issuing trust.
Unless otherwise specified in the applicable pricing supplement, any note
sold to the Purchasing Agent as principal will be purchased by the Purchasing
Agent at a price equal to 100% of the principal amount thereof less a percentage
of the principal amount equal to the commission applicable to an agency sale of
a note of identical maturity. The Purchasing Agent may sell notes it has
purchased from a trust as principal to other NASD dealers in good standing at a
concession. Unless otherwise specified in the applicable pricing supplement, the
concession allowed to any dealer will not, during the distribution of the notes
of a series, be in excess of the concession the Purchasing Agent will receive
from the issuing trust. After the initial offering of notes of a series, the
offering price, the concession and any reallowance may be changed.
The offer made hereby may be modified without notice, and each trust may
reject offers in whole or in part (whether placed directly by an issuing trust
or through the Purchasing Agent). The Purchasing Agent will have the right, in
its discretion reasonably exercised, to reject in whole or in part any offer to
purchase notes received by it on an agency basis.
Unless otherwise specified in the applicable pricing supplement, you will
be required to pay the purchase price of your notes in immediately available
funds in United States dollars in The City of New York on the date of
settlement.
Upon issuance, the notes of a series will not have an established trading
market. There can be no assurance that a trading market for your notes will ever
develop or be maintained if developed. Unless otherwise specified in the
applicable pricing supplement, a series of notes will not be listed on any
securities exchange. The Purchasing Agent may from time to time purchase and
sell notes in the secondary market, but the Purchasing Agent is not obligated to
do so. There can be no assurance that a secondary market for the notes will
develop or that there will be liquidity in the secondary market if one develops.
From time to time, the Purchasing Agent may make a market in the notes, but the
Purchasing Agent is not obligated to do so and may discontinue any market-making
activity at any time.
In connection with an offering of notes purchased by the Purchasing Agent
as principal on a fixed offering price basis, the Purchasing Agent will be
permitted to engage in certain transactions that stabilize the price of notes.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of notes. If the Purchasing Agent creates a
short position in notes (i.e., if it sells notes in an amount exceeding the
amount specified in the applicable pricing supplement), they may reduce that
short position by purchasing notes in the open market. In general, purchases of
notes for the purpose of stabilization or to reduce a short position could cause
the price of notes to be higher than it might be in the absence of these type of
purchases.
Neither Global Funding and the trusts nor the Purchasing Agent make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described in the immediately preceding paragraph may have on
the price of notes. In addition, neither Global Funding and the trusts nor the
Purchasing Agent make any representation that the
S-50
Purchasing Agent will engage in any such transactions or that such transactions,
once commenced, will not be discontinued without notice.
The Purchasing Agent will be an "underwriter," with respect to the notes
being distributed by it and the funding agreements being purchased by the
issuing trust, and any discounts or commissions received by it on the sale or
resale of notes may be deemed to be underwriting discounts and commissions under
the Securities Act. The Purchasing Agent may be entitled under agreements
entered into with a trust, Global Funding and Allstate Life to indemnification
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments that the Purchasing Agent may
be required to make in respect of such liabilities.
Global Funding is a statutory issuer of the notes and the funding notes
under the Securities Act, and Allstate Life is the issuer of the funding
agreements under the Securities Act. In addition, under the Securities Act, each
trust is a statutory underwriter of each funding agreement and each funding note
purchased with the proceeds from the issuance of such trust's notes.
In the ordinary course of its business, the Purchasing Agent and its
affiliates have engaged, and may in the future engage, in investment and
commercial banking transactions with Allstate Life and certain of its
affiliates.
Broker-dealers and securities firms have executed dealer agreements with
the Purchasing Agent and have agreed to market and sell the notes in accordance
with the terms of those agreements and applicable laws and regulations.
The issuing trusts may sell other securities referred to in the
accompanying prospectus, and the amount of notes offered by this prospectus
supplement may be reduced as a result of those sales.
S-51
ANNEX A
REPAYMENT ELECTION FORM
Allstate Life Global Funding
Allstate Life(R) CoreNotes(R)
Cusip Number
To: [Name of trust]
The undersigned financial institution (the "Financial Institution")
represents the following:
o The Financial Institution has received a request for repayment from
the executor or other authorized representative (the "Authorized
Representative") of the deceased beneficial owner listed below (the
"Deceased Beneficial Owner") of Allstate Life(R) CoreNotes(R) (CUSIP
No. ) (the "Notes").
o At the time of his or her death, the Deceased Beneficial Owner owned
Notes in the principal amount listed below.
o The Deceased Beneficial Owner acquired the Notes at least six months
before the date of death of such Deceased Beneficial Owner.
o The Financial Institution currently holds such Notes as a direct or
indirect participant in The Depository Trust Company (the
"Depositary"). The Financial Institution agrees to the following
terms:
o The Financial Institution shall follow the instructions (the
"Instructions") accompanying this Repayment Election Form (this
"Form").
o The Financial Institution shall make all records specified in the
Instructions supporting the above representations available to The
Bank of New York Trust Company, N.A. (the "Trustee") or [Name of
trust] (the "Trust") for inspection and review within five Business
Days of the Trustee's or the Trust's request.
o If the Financial Institution, the Trustee or the Trust, in any such
party's reasonable discretion, deems any of the records specified in
the Instructions supporting the above representations unsatisfactory
to substantiate a claim for repayment, the Financial Institution shall
not be obligated to submit this Form, and the Trustee or Trust may
deny repayment. If the Financial Institution cannot substantiate a
claim for repayment, it shall notify the Trustee immediately.
o Repayment elections may not be withdrawn.
o The Financial Institution agrees to indemnify and hold harmless the
Trustee and the Trust against and from any and all claims,
liabilities, costs, losses, expenses, suits and damages resulting from
the Financial Institution's above representations and request for
repayment on behalf of the Authorized Representative.
o The Notes will be repaid on the first Interest Payment Date to occur
at least 20 calendar days after the date of acceptance of the Notes
for repayment, unless such date is not a business day, in which case
the date of repayment shall be the next succeeding business day.
o Subject to the Trust's rights to limit the aggregate principal amount
of Notes as to which exercises of the survivor's option shall be
accepted in any one calendar year, all questions as to the eligibility
or validity of any exercise of the survivor's option will be
determined by the Trustee, in its sole discretion, which determination
shall be final and binding on all parties.
A-1
REPAYMENT ELECTION FORM
(1) Name of Deceased Beneficial Owner
(2) Date of Death
(3) Name of Authorized Representative Requesting Repayment
(4) Name of Financial Institution Requesting Repayment
(5) Signature of Authorized Representative of Financial Institution
Requesting Repayment
(6) Principal Amount of Requested Repayment
(7) Date of Election
(8) Financial Institution Representative Name: Phone Number: Fax Number:
Mailing Address (no P.O. Boxes):
(9) Wire instructions for payment:
Bank Name:
ABA Number:
Account Name:
Account Number:
Reference (optional):
A-2
TO BE COMPLETED BY THE TRUSTEE:
(A) Election Number*:
(B) Delivery and Payment Date:
(C) Principal Amount:
(D) Accrued Interest:
(E) Date of Receipt of Form by the Trustee:
(F) Date of Acknowledgment by the Trustee:
- ---------------
* To be assigned by the Trustee upon receipt of this Form. An acknowledgement,
in the form of a copy of this document with the assigned Election Number, will
be returned to the party and location designated in item (8) above.
A-3
INSTRUCTIONS FOR COMPLETING REPAYMENT ELECTION FORM AND EXERCISING REPAYMENT
OPTION
Capitalized terms used and not defined herein have the meanings defined in
the accompanying Repayment Election Form.
1. Collect and retain for a period of at least three years (1) satisfactory
evidence of the authority of the Authorized Representative, (2)
satisfactory evidence of death of the Deceased Beneficial Owner, (3)
satisfactory evidence that the Deceased Beneficial Owner beneficially
owned, at the time of his or her death, the Notes being submitted for
repayment, (4) satisfactory evidence that the Notes being submitted for
repayment was acquired by the Deceased Beneficial Owner at least six months
before the date of the death of such Deceased Beneficial Owner, and (5) any
necessary tax waivers. For purposes of determining whether the Notes will
be deemed beneficially owned by an individual at any given time, the
following rules shall apply:
o If a Note (or a portion thereof) is beneficially owned by tenants by
the entirety or joint tenants, the Note (or relevant portion thereof)
will be regarded as beneficially owned by a single owner. Accordingly,
the death of a tenant by the entirety or joint tenant will be deemed
the death of the beneficial owner and the entire principal amount so
owned will become eligible for repayment.
o The death of a person beneficially owning a Note (or a portion
thereof) by tenancy in common will be deemed the death of the
beneficial owner only with respect to the deceased owner's interest in
the Note (or relevant portion thereof) so owned, unless a husband and
wife are the tenants in common, in which case the death of either will
be deemed the death of the beneficial owner and the entire principal
amount so owned will be eligible for repayment.
o A Note (or a portion thereof) beneficially owned by a trust will be
regarded as beneficially owned by each beneficiary of the trust to the
extent of that beneficiary's interest in the trust (however, a trust's
beneficiaries collectively cannot be beneficial owners of more Notes
than are owned by the trust). The death of a beneficiary of a trust
will be deemed the death of the beneficial owner of the Notes (or
relevant portion thereof) beneficially owned by the trust to the
extent of that beneficiary's interest in the trust. The death of an
individual who was a tenant by the entirety or joint tenant in a
tenancy which is the beneficiary of a trust will be deemed the death
of the beneficiary of the trust. The death of an individual who was a
tenant in common in a tenancy which is the beneficiary of a trust will
be deemed the death of the beneficiary of the trust only with respect
to the deceased holder's beneficial interest in the Note, unless a
husband and wife are the tenants in common, in which case the death of
either will be deemed the death of the beneficiary of the trust.
o The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial interest in a Note (or a portion
thereof) will be deemed the death of the beneficial owner of that Note
(or relevant portion thereof), regardless of the registration of
ownership, if such beneficial interest can be established to the
satisfaction of the Trustee. Such beneficial interest will exist in
many cases of street name or nominee ownership, custodial
arrangements, ownership by a trustee, ownership under the Uniform
Transfers of Gifts to Minors Act and community property or other joint
ownership arrangements between spouses. Beneficial interest will be
evidenced by such factors as the power to sell or otherwise dispose of
a Note, the right to receive the proceeds of sale or disposition and
the right to receive interest and principal payments on a Note.
2. Indicate the name of the Deceased Beneficial Owner on line (1).
3. Indicate the date of death of the Deceased Beneficial Owner on line (2).
4. Indicate the name of the Authorized Representative requesting repayment on
line (3).
5. Indicate the name of the Financial Institution requesting repayment on line
(4).
6. Affix the authorized signature of the Financial Institution's
representative on line (5). THE SIGNATURE MUST BE MEDALLION SIGNATURE
GUARANTEED.
7. Indicate the principal amount of Notes to be repaid on line (6).
8. Indicate the date this Form was completed on line (7).
A-4
9. Indicate the name, mailing address (no P.O. boxes, please), telephone
number and facsimile-transmission number of the party to whom the
acknowledgment of this election may be sent in item (8).
10. Indicate the wire instruction for payment on line (9).
11. Leave lines (A), (B), (C), (D), (E) and (F) blank.
12. Mail or otherwise deliver an original copy of the completed Form to:
The Bank of New York Trust Company, N.A.
2 North LaSalle Street
Suite 1020
Chicago, IL 60602
Attention: -
FACSIMILE TRANSMISSIONS OF THE REPAYMENT ELECTION FORM WILL NOT BE
ACCEPTED.
13. If the acknowledgement of the Trustee's receipt of this Form, including the
assigned Election Number, is not received within 10 days of the date such
information is sent to the Trustee, contact the Trustee at The Bank of New
York Trust Company, N.A., 2 N. LaSalle Street, Suite 1020, Chicago, IL
60602.
For assistance with this Form or any questions relating thereto, please
contact the Trustee at The Bank of New York Trust Company, N.A., 2 N.
LaSalle Street, Suite 1020, Chicago, IL 60602.
A-5
ANNEX B
FORM OF PRICING SUPPLEMENT
Filed pursuant to Rule 424(b)[ ]
Registration Statement No. 333-143541
Pricing Supplement No. [ ] Dated [ ]
(To Prospectus dated [ ], and
Prospectus Supplement dated [ ])
CUSIP: [ ]
Allstate Life Global Funding
Allstate Life(R) CoreNotes(R)
Issued Through
Allstate Life Global Funding Trust [ ]
The description in this pricing supplement of the particular terms of the
Allstate Life(R) CoreNotes(R)offered hereby (the "Notes"), the Funding
Agreement(s) (specified below) issued by Allstate Life Insurance Company
("Allstate Life") and deposited into Allstate Life Global Funding Trust [ ] (the
"Trust") by Allstate Life Global Funding ("Global Funding") and the Funding Note
(specified below) issued by Global Funding to the Trust supplements the
description of the general terms and provisions of the notes, the funding
agreements and the funding notes set forth in the accompanying prospectus and
prospectus supplement, to which reference is hereby made.
The Notes will represent the obligations of the issuing entity only and
will not represent the obligations of, or interest in, any other person or
entity, including Global Funding, Allstate Life or any of their respective
affiliates. The Notes will constitute asset-backed securities within the meaning
of Regulation AB under the Securities Act of 1933, as amended.
THE NOTES
Principal Amount: [ ] Agent(s) Discount: [ ]
Issue Price: [ ] Original Issue Date: [ ]
Net Proceeds to the Trust: [ ] Stated Maturity Date: [ ]
Specified Currency: [ ] Depositary: [The Depository Trust Company]
Interest Payment Dates: [ ] Interest Reset Dates: [ ]
Initial Interest Payment Date: [ ] Initial Interest Reset Date: [ ]
Regular Record Date: [15 calendar days prior to the Interest Payment Date]
[Modified] Following Business Day Convention: [ ]
Business Day: [ ]
Fiscal Year of Trust (not applicable unless different than as specified in the
prospectus and prospectus supplement): [ ]
Type of Interest Rate: [[ ] Fixed Rate] [[ ] Floating Rate]
Fixed Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Interest Rate: [ ]
Floating Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Regular Floating Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Floating Rate/Fixed Rate Notes: [[ ] Yes] [[ ] No]. If, Yes,
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Fixed Interest Rate: [ ]
Fixed Rate Commencement Date: [ ]
Initial Interest Rate, if any: [ ]
Interest Rate Basis(es). Check all that apply:
[ ] CD Rate [ ] Federal Funds Rate
[ ] CMT Rate [ ] LIBOR
[ ] Commercial Paper Rate [ ] Prime Rate
[ ] Constant Maturity Swap Rate [ ] Treasury Rate
[If LIBOR:]
LIBOR Reuters Page: [ ]
LIBOR Currency: United States Dollars
[If CMT Rate:]
Designated CMT Reuters Page:
[If CMT Reuters Page FEDCMT:] [[ ] Weekly Average]
[[ ] Monthly Average]
Designated CMT Maturity Index: [ ]
Index Maturity: [ ]
Spread (+/-): [ ]
Spread Multiplier: [ ]
Interest Reset Date(s): [ ]
Interest Determination Date(s): [ ]
Maximum Interest Rate, if any: [ ]
Minimum Interest Rate, if any: [ ]
Calculation Agent, if any: [The Bank of New York Trust Company, N.A.]
Computation of Interest (not applicable unless different than as specified in
the prospectus and prospectus supplement):
B-2
Day Count Convention (not applicable unless different than as specified in the
prospectus and prospectus supplement):
Discount Notes: [[ ] Yes] [[ ] No]. If, Yes,
Total Amount of Discount: [ ]
Initial Accrual Period of Discount: [ ]
Additional/Other Terms: [ ]
Terms of Survivor's Option: [[ ] Yes] [[ ] No]. If, Yes,
Annual Put Limitation: [ ] As specified in the prospectus and prospectus
supplement; or
[ ] $[ ]
Individual Put Limitation: [ ] As specified in the prospectus and prospectus
supplement; or
[ ] $[ ]
Trust Put Limitation: [ ] $[ ]
Redemption Provisions: [[ ] Yes] [[ ] No]. If, Yes,
Initial Redemption Date: [ ]
Initial Redemption Percentage: [ ]
Annual Redemption Percentage Reduction (if any):
[ ]
Redemption: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms:
Sinking Fund (not applicable unless specified):
Securities Exchange Listing: [[ ] Yes] [[ ] No]. If Yes, Name of Exchange:
Authorized Denominations: [$1,000]
Ratings:
The Notes issued under the Program are rated "[ ]" by Standard & Poor's, a division of The McGraw Hill Companies, Inc.
("S&P"). It is anticipated that Moody's Investors Service, Inc. ("Moody's") will rate the Notes "[ ]" on the Original
Issue Date.
Agent(s) Purchasing Notes as Principal: [[ ] Yes] [[ ] No]. If Yes,
Agent(s) Principal Amount
[ ]
Total: [ ]
======================
Agent(s) Acting as Agent: [[ ] Yes] [[ ] No]. If Yes,
Agent(s) Principal Amount
[ ] [ ]
Total: [ ]
Additional/Other Terms: [ ]
Special Tax Considerations: [ ]
B-3
THE FUNDING AGREEMENT(S)
Funding Agreement Issuer: Allstate Life Insurance Company
Funding Agreement No.: [ ]
Deposit Amount: [ ]
Issue Price: [ ]
Net Deposit Amount: [ ]
Effective Date: [ ]
Specified Currency: United States Dollars
Interest Payment Dates: [ ]
Initial Interest Payment Date: [ ]
Interest Reset Date: [ ]
Initial Interest Reset Date: [ ]
Funding Agreement [Modified] Following Business Day Convention: [ ]
Funding Agreement Business Day: [ ]
Type of Interest Rate: [[ ] Fixed Rate] [[ ] Floating Rate]
Fixed Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Interest Rate: [ ]
Floating Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Floating Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Floating Rate/Fixed Rate Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Floating Interest Rate: [ ]
Interest Rate Basis(es): [ ]
Fixed Interest Rate: [ ]
Fixed Rate Commencement Date: [ ]
Initial Interest Rate, if any: [ ]
Initial Interest Reset Date: [ ]
Interest Rate Basis(es). Check all that apply:
[ ] CD Rate [ ] Federal Funds Rate
[ ] CMT Rate [ ] LIBOR
[ ] Commercial Paper Rate [ ] Prime Rate
[ ] Constant Maturity Swap Rate [ ] Treasury Rate
[If LIBOR:]
LIBOR Reuters Page: [ ]
B-4
LIBOR Currency: [ ]
[If CMT Rate:]
Designated CMT Reuters Page: [ ]
[If CMT Reuters Page FEDCMT:] [[ ] Weekly Average]
[[ ] Monthly Average]
Designated CMT Maturity Index: [ ]
Index Maturity: [ ]
Spread (+/-): [ ]
Spread Multiplier: [ ]
Interest Reset Date(s): [ ]
Interest Determination Date(s): [ ]
Maximum Interest Rate, if any: [ ]
Minimum Interest Rate, if any: [ ]
Calculation of Interest: [ ]
Day Count Convention: [ ]
Additional/Other Terms: [ ]
Discount Funding Agreement: [[ ] Yes] [[ ] No]. If Yes,
Total Amount of Discount: [ ]
Initial Accrual Period of Discount: [ ]
Additional/Other Terms: [ ]
Redemption Provisions: [[ ] Yes] [[ ] No]. If Yes,
Initial Redemption Date: [ ]
Initial Redemption Percentage: [ ]
Annual Redemption Percentage Reduction
(if any): [ ]
Redemption: [[ ] In whole only and not in part]
[[ ] May be in whole or in part]
Additional/Other Terms: [ ]
Repayment: [ ]
Sinking Fund (not applicable unless specified): [ ]
Ratings:
B-5
The Funding Agreements issued under the Program are rated AA by S&P. It is
anticipated that the Funding Agreement(s) will be rated Aa2 by Moody's on the
Original Issue Date.
Additional/Other Terms, if any: [ ]
Special Tax Considerations: [ ]
THE FUNDING NOTE
Funding Note Issuer: Allstate Life Global Funding
Funding Note No.: [ ]
Principal Amount: [ ]
The Funding Note will otherwise have payment and other terms substantially
similar to the Funding Agreement(s) and the Notes, except that the terms of the
Funding Note will provide that it will be cancelled immediately upon the sale
of, and deposit into, the Trust by Global Funding of the Funding Agreement(s).
B-6
==============================================================================
$8,400,000,000
Allstate Life Global Funding
Depositor
Allstate Life(R) CoreNotes(R)
Due Between Nine Months and 30 Years From the Date of Issue
Issued Through
Allstate Life Global Funding Trusts
Secured by
Funding Agreements Issued by
Allstate Life Insurance Company
Sponsor
------------------
PROSPECTUS SUPPLEMENT
------------------
Merrill Lynch & Co.
-, 2007
"Allstate Life(R)" is a registered service mark of Allstate Insurance Company.
"CoreNotes(R)" is a registered service mark of Merrill Lynch & Co., Inc.
===============================================================================
Subject to Completion
Preliminary Prospectus dated June 26, 2007
PROSPECTUS
$8,400,000,000
Allstate Life Global Funding
Depositor
Secured Medium Term Notes
Allstate Life(R) CoreNotes(R)
Issued Through
Allstate Life Global Funding Trusts
Secured by
Funding Agreements Issued by
Allstate Life Insurance Company
Sponsor
------------------
Allstate Life Global Funding (the "depositor" or "Global Funding") is a
statutory trust formed under the laws of the State of Delaware. Its primary
purpose is to facilitate the programs for the issuance of one or more series of
secured medium term notes (the "notes"), including, in connection with each
offering of notes, to issue the applicable funding note (each, a "funding
note"), as more fully described herein. Each series of notes will be issued by a
newly created separate and distinct Delaware statutory trust (each, a "trust").
Global Funding will be the sole beneficial owner of each trust that is formed
and the depositor of the funding agreements into the issuing trusts. The notes
may have an aggregate principal amount of up to $8,400,000,000 or the equivalent
amount in one or more foreign or composite currencies.
The notes of each series will represent the obligations of the issuing
entity only and will not represent the obligations of, or interest in, any other
person or entity, including Global Funding, Allstate Life or any of their
respective affiliates. The notes of each series will constitute "asset-backed
securities" within the meaning of Regulation AB under the Securities Act of
1933, as amended.
In connection with the issuance of a series of notes, the issuing trust
will acquire one or more funding agreements issued by Allstate Life Insurance
Company ("Allstate Life"). The notes of a series will be secured by the right,
title and interest of the issuing trust in and to (1) the funding agreement(s)
held by that trust, (2) all proceeds of such funding agreement(s) and (3) all
books and records pertaining to such funding agreement(s). Each series of notes
will be secured by and payable solely out of the assets of the issuing trust,
and holders of such series of notes will have no rights against the assets of
Global Funding or the assets of any other trust.
The notes of a series may be listed on a securities exchange.
Neither the Securities and Exchange Commission, any state securities
commission nor any state insurance commission has approved or disapproved of
these securities or determined if this prospectus, any prospectus supplement or
any pricing supplement is truthful or complete. Any representation to the
contrary is a criminal offense.
The trusts may sell the secured medium term notes referred to herein to one
or more of the agents referred to below (collectively, the "Agents") as
principals for resale at varying or fixed offering prices or through the
applicable Agent(s) as agents using their reasonable efforts on behalf of each
issuing trust. The trusts may also sell secured medium term notes directly to
investors without the assistance of any Agent. Unless otherwise specified in the
applicable pricing supplement, any secured medium term note sold to an Agent as
principal will be purchased by that Agent at a price equal to 100% of the
principal amount thereof less a percentage of the principal amount equal to the
commission applicable to an agency sale of a note of identical maturity. Unless
otherwise specified in the applicable pricing supplement, each trust will pay a
commission to an Agent, ranging from .150% to .875% of the principal amount of
each secured medium term note, depending upon its stated maturity, sold through
that Agent as its agent.
Each trust may sell its Allstate Life(R) CoreNotes(R) to Merrill Lynch,
Pierce, Fenner & Smith Incorporated (the "Purchasing Agent") as principal for
resale at a fixed offering price specified in the applicable pricing supplement
or at varying prices. Each trust may also explicitly agree with the Purchasing
Agent that it will use its reasonable efforts as agent on behalf of the issuing
trust to solicit offers to purchase Allstate Life(R) CoreNotes(R) of the
applicable series from that trust at 100% of the principal amount thereof,
unless otherwise specified in the applicable pricing supplement. Unless
otherwise specified in the applicable pricing supplement, any Allstate Life(R)
CoreNotes(R) sold to the Purchasing Agent as principal will be purchased by the
Purchasing Agent at a price equal to 100% of the principal amount thereof less a
percentage of the principal amount equal to the commission applicable to an
agency sale of a note of identical maturity. Unless otherwise specified in the
applicable pricing supplement, each trust will pay a commission to the
Purchasing Agent, ranging from .125% to 2.50% of the principal amount of the
applicable Allstate Life(R) CoreNotes(R), depending upon the stated maturity,
for all Allstate Life(R) CoreNotes(R) purchased from the issuing trust by the
Purchasing Agent as its agent.
The date of this prospectus is -, 2007.
"Allstate Life(R)" is a registered service mark of Allstate Insurance Company.
"CoreNotes(R)" is a registered service mark of Merrill Lynch & Co., Inc.
FORWARD-LOOKING STATEMENTS
Allstate Life
This prospectus, the applicable accompanying prospectus supplement and each
applicable pricing supplement may include forward-looking statements of Allstate
Life. These forward-looking statements are not statements of historical fact but
rather reflect Allstate Life's current expectations, estimates and predictions
about future results and events. These statements may use words such as
"should," "likely," "target," "anticipate," "believe," "estimate," "expect,"
"intend," "predict," "project" and similar expressions as they relate to
Allstate Life or its management. When Allstate Life makes forward-looking
statements, Allstate Life is basing them on its management's beliefs and
assumptions, using information currently available to Allstate Life. These
forward-looking statements are subject to risks, uncertainties and assumptions,
including but not limited to, risks, uncertainties and assumptions discussed in
this prospectus supplement, the accompanying prospectus and in each applicable
pricing supplement. Factors that can cause or contribute to these differences
include those described under the heading "Risk Factors" in this prospectus
supplement. Allstate Life undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if
Allstate Life's underlying assumptions prove to be incorrect, actual results may
vary materially from what Allstate Life projected. Any forward-looking
statements of Allstate Life you read in this prospectus, the applicable
accompanying prospectus supplement or the applicable pricing supplement reflect
Allstate Life's current views with respect to future events and are subject to
these and other risks, uncertainties and assumptions relating to Allstate Life's
operations, results of operations, growth strategy and liquidity. All subsequent
written and oral forward-looking statements attributable to Allstate Life or
individuals acting on Allstate Life's behalf are expressly qualified in their
entirety by this section. You should specifically consider the factors
identified in this prospectus supplement, the accompanying prospectus and each
applicable pricing supplement which could cause actual results to differ before
making an investment decision.
Global Funding and the Trusts
This prospectus, the accompanying prospectus supplement and each applicable
pricing supplement may include forward-looking statements of Global Funding and
the trusts. These forward-looking statements are subject to risks, uncertainties
and assumptions, including but not limited to, risks, uncertainties and
assumptions discussed in this prospectus, the accompanying prospectus supplement
and in each applicable pricing supplement. Global Funding does not, and the
trusts will not, undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
You should specifically consider the factors identified in this prospectus,
the accompanying prospectus supplement and each applicable pricing supplement
before making an investment decision. The trusts are not entitled to the safe
harbors contained in Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to forward-looking statements of the
trusts in this prospectus, the accompanying prospectus supplements and each
applicable pricing supplement.
1
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement filed by Global Funding
and Allstate Life (the "registrants") with the Securities and Exchange
Commission (the "SEC"). Pursuant to the registration statement, the trusts will
be offering, from time to time, up to a total amount of $8,400,000,000, or the
equivalent amount in one or more foreign currencies, in aggregate principal
amount of the notes described in this prospectus. This prospectus provides a
general description of the notes that the trusts may be offering, and additional
descriptions of the related funding notes and funding agreements. The applicable
prospectus supplement to this prospectus will provide additional descriptions of
the secured medium term notes or the Allstate Life(R) CoreNotes(R), as
applicable, to be offered by the trusts, and the related funding notes and
funding agreements. Each time a trust offers to sell notes, it will prepare a
separate prospectus supplement to this prospectus and the applicable prospectus
supplement (a "pricing supplement") that will set forth the specific terms of
the applicable series of notes, and the terms of the related funding note and
funding agreement(s). That pricing supplement also may add, update, supplement
or clarify information in this prospectus and the applicable prospectus
supplement. Before you agree to purchase any notes, you should read this
prospectus, the applicable prospectus supplement and the applicable pricing
supplement together with the information described under the heading
"Incorporation of Documents by Reference" on page 3. For more detail on the
terms of the notes, you should read the exhibits filed with or incorporated by
reference in the registration statement.
You should rely on the information contained or incorporated by reference
in this prospectus, the applicable prospectus supplement and the applicable
pricing supplement. Neither the registrants nor any Agent has authorized anyone
to provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. Neither the
registrants nor any Agent is making an offer to sell the notes in any
jurisdiction where the offer or sale is not permitted. You should not assume
that the information contained or incorporated by reference in this prospectus,
the applicable prospectus supplement and the applicable pricing supplement is
accurate as of any date other than the date of such document.
In this prospectus, references to the "depositor" and "Global Funding" are
to Allstate Life Global Funding. References to the "trusts" are to Allstate Life
Global Funding Trusts. References to an "issuing trust" are to a trust with
respect to the series of notes issued and sold to the public by that trust.
These references are not to Allstate Life Insurance Company. In this prospectus,
references to "Allstate Life" are to Allstate Life Insurance Company.
In this prospectus, references to the "United States dollars," "U.S.
dollars" or "$" are to lawful currency of the United States of America, and
references to "Euro" are to the currency introduced at the start of the third
stage of the European Economic and Monetary Union pursuant to the Treaty
Establishing the European Community, as amended.
2
AVAILABLE INFORMATION
This prospectus, which constitutes part of the registration statement
referred to above, does not contain all of the information set forth in the
registration statement. Parts of the registration statement are omitted from
this prospectus in accordance with the rules and regulations of the SEC.
Allstate Life is subject to the informational requirements of the Exchange Act,
and, in accordance with the Exchange Act, Allstate Life files or furnishes
annual, quarterly, special event reports and other information with the SEC.
Each trust formed in connection with the offering of notes will incur
separate reporting obligations under the Exchange Act. As depositor, Global
Funding will file periodic reports with the SEC with respect to each trust
formed under the programs on Form 8-K or Form 10-D, as applicable, and will file
annual reports with respect to each trust on Form 10-K. Global Funding will also
transmit such reports to holders of each applicable series of notes in the
manner and to the extent required by the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
Based on the interpretation of the SEC, as set forth in a no-action letter
issued to Global Funding on December 28, 2006, Global Funding is not and will
not be filing with the SEC any reports on its behalf under Section 15(d) of the
Exchange Act with respect to the Funding Notes.
As part of the Allstate organization, Allstate Life does not maintain a
company-specific website. All reports and other information filed by Allstate
Life with the SEC are available over the internet at http://www.allstate.com.
(This uniform resource locator (URL) is an inactive textual reference only and
is not intended to incorporate the Allstate website into this prospectus).
Global Funding does not maintain a website. No reports will be made available on
the website of any other party as no such obligation is imposed on any such
party under the programs. You can read and copy any reports or other information
that Global Funding (as depositor on behalf of the trusts) and Allstate Life
file at the SEC's public reference room at Room 1580, 100 F Street, N.E.,
Washington, D.C. 20549. You can also request copies of such documents upon
payment of a duplicating fee, by writing to the SEC's public reference room. You
can obtain information regarding the public reference room by calling the SEC at
1-800-SEC-0330. Such filings are available to the public from commercial
document retrieval services and over the internet at http://www.sec.gov. (This
uniform resource locator (URL) is an inactive textual reference only and is not
intended to incorporate the SEC website into this prospectus).
Pursuant to the terms of the Trust Indenture Act, the indenture trustee
will be required to transmit to holders of each series of notes reports with
respect to certain matters, including any changes to the eligibility and
qualifications, any conflicting interests, any unpaid advances made, and its
actions that materially affect the applicable notes or collateral. These reports
will not be made available on the indenture trustee's website. A copy of each
such report shall, at the time of such transmission to indenture security
holders, be filed with each stock exchange upon which the applicable note may be
listed, and also with the SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows Global Funding and Allstate Life to incorporate by reference
information that Global Funding (with respect to the trusts) and Allstate Life
file with the SEC into this prospectus and any accompanying prospectus
supplement and pricing supplement, which means that incorporated documents are
considered part of this prospectus and any accompanying prospectus supplement
and pricing supplement. Global Funding (as depositor on behalf of the trusts)
and Allstate Life can disclose important information to you by referring you to
those documents. Information that Global Funding (with respect to the trusts)
and Allstate Life file with the SEC will automatically update and supersede
information in this prospectus.
This prospectus and any accompanying prospectus supplement and pricing
supplement incorporate by reference:
o Allstate Life's Annual Report on Form 10-K for the fiscal year ended
December 31, 2006;
o Allstate Life's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007;
o Allstate Life's Current Reports on Form 8-K filed on March 20, 2007
and May 14, 2007; and
3
o all filings made with the SEC by Global Funding as depositor with
respect to the trusts since January 1, 2007 pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
This prospectus and any accompanying prospectus supplement and pricing
supplement also incorporate by reference any filings made by Global Funding
(with respect to the trusts) or Allstate Life with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
prospectus and prior to the termination of the offering of the notes. These
documents contain important information.
You may request a copy of any documents incorporated by reference in this
prospectus and any accompanying prospectus supplement and pricing supplement
(including any exhibits that are specifically incorporated by reference in
them), at no cost, by writing or telephoning to the following addresses or
telephone numbers:
Allstate Life Global Funding Allstate Life Insurance Company
c/o AMACAR Pacific Corp. 3100 Sanders Road
6525 Morrison Boulevard Northbrook, Illinois 60062
Suite 318 Attention: Assistant Vice President, Institutional Markets
Charlotte, North Carolina 28211 Tel: (847) 402-5000
Attention: President
Tel: (704) 365-0569
4
DESCRIPTION OF ALLSTATE LIFE GLOBAL FUNDING AND THE TRUSTS
General
Allstate Life Global Funding is a statutory trust formed and existing under
the laws of the State of Delaware pursuant to the trust agreement, dated as of
June 24, 2002, as amended and restated by the Amended and Restated Trust
Agreement dated as of April 27, 2004, as further amended and restated by the
Amended and Restated Trust Agreement dated as of August 16, 2005, and as further
amended and restated by the Amended and Restated Trust Agreement dated as of
March 15, 2006 (as the same may be further amended, supplemented, modified,
restated or replaced from time to time, the "depositor trust agreement"),
executed by Wilmington Trust Company as Delaware trustee of Global Funding,
AMACAR Pacific Corp. as administrator of Global Funding and AMACAR Pacific Corp.
as the trust beneficial owner of Global Funding, and the filing of a certificate
of trust (and amendments thereto) with the Secretary of State of the State of
Delaware. You should read the actual documents which are attached as exhibits to
the registration statement of which this prospectus forms a part.
Global Funding has not and will not engage in any activity other than:
o beneficially owning the trusts;
o issuing one or more funding notes;
o acquiring one or more funding agreements from Allstate Life;
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the funding note indenture
trustee;
o assigning absolutely the funding agreement(s) to, and depositing such
funding agreement(s) into, the trusts; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
Global Funding is performing the functions of the depositor under the
programs for the issuance of secured medium term notes and Allstate Life(R)
CoreNotes(R) described in this prospectus and the applicable prospectus
supplements.
Each series of notes will be issued by a newly created separate and
distinct Delaware statutory trust formed by the Delaware trustee of the trust,
the administrator of the trust and Global Funding as the sole beneficial owner
of the trust pursuant to the filing of a certificate of trust and the execution
of the applicable trust agreement.
After formation, each trust will not engage in any activity other than:
o issuing and selling a single series of notes;
o immediately acquiring a funding note and immediately surrendering such
funding note for cancellation pursuant to its terms in exchange for
one or more funding agreement(s);
o acquiring, holding and maintaining the funding agreement(s);
o pledging, assigning as collateral and granting a security interest in
the applicable funding agreement(s) to the indenture trustee;
o making payments on the applicable series of notes; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental to or
connected with those activities.
The principal executive offices of Global Funding and the trusts will be
located at c/o AMACAR Pacific Corp., 6525 Morrison Boulevard, Suite 318,
Charlotte, North Carolina 28211. The telephone number is (704) 365-0569.
5
Unless otherwise provided in the applicable pricing supplement, the fiscal
year for each trust will end on December 31. The fiscal year for Global Funding
will end on December 31.
Assets and Obligations of Global Funding; Distributions
The only equity contribution to Global Funding is $1,000 invested in Global
Funding by its trust beneficial owner. Each trust will use the net proceeds
received from the issuance of the related series of notes to purchase a funding
note from Global Funding. Global Funding will use the net proceeds received from
the sale of the related funding note to purchase one or more funding agreements
issued by Allstate Life. Pursuant to each funding note indenture, Global Funding
will immediately pledge and collaterally assign each such funding agreement to
and grant a security interest in each such funding agreement and the related
collateral in favor of the funding note indenture trustee. Global Funding will
immediately thereafter assign absolutely to, and deposit into, the applicable
trust each such funding agreement and, in connection with such assignment and
deposit, the relevant funding note will be surrendered for cancellation by or on
behalf of the applicable trust, and will be cancelled by the funding note
indenture trustee, and the pledge and collateral assignment of each funding
agreement to, and the security interest in favor of, the funding note indenture
trustee will be terminated. Such cancellation shall operate as a redemption and
satisfaction of the funding note. Global Funding will be the sole beneficial
owner of each trust that is formed.
Prior to the issue date of each funding note, the Delaware trustee shall
establish the related payment account for Global Funding. The Delaware trustee
and any agent of the Delaware trustee shall have exclusive control and sole
right of withdrawal with respect to each payment account for the purpose of
making deposits in and withdrawals from such payment account in accordance with
the depositor trust agreement. Subject to each funding note indenture, all funds
or other property received by the Delaware trustee on behalf of Global Funding
in respect of any collateral for the applicable funding note will be deposited
in the related payment account. All funds and other property deposited or held
from time to time in a payment account for Global Funding shall be held by the
Delaware trustee in such payment account for the exclusive benefit of the trust
beneficial owner, subject to the security interest in the applicable collateral
in favor of the applicable funding note indenture trustee for the benefit of the
holder of the applicable funding note and any other person for whose benefit
such funding note indenture trustee is or will be holding such collateral, and
for distribution by the Delaware trustee as provided in the depositor trust
agreement, including (and subject to) any priority of payments provided for in
the depositor trust agreement.
All funds and other property deposited into a payment account of Global
Funding shall be distributed by Global Funding as follows:
First: to the applicable funding note indenture trustee, for the payment of
all amounts then due and unpaid upon the applicable funding note and any
other amounts due and payable in accordance with the applicable funding
note indenture; and
Second: upon the final surrender of the applicable funding note and payment
of any amounts payable in respect thereof, any remaining funds and other
property deposited into such payment account shall be distributed to
Delaware trustee of Global Funding for distribution as provided below.
Notwithstanding anything in the depositor trust agreement to the contrary,
the Delaware trustee, on behalf of Global Funding, shall execute a standing
order to each funding note indenture trustee pursuant to which such funding note
indenture trustee, either directly or through an applicable funding note paying
agent, shall distribute all applicable amounts due and unpaid in accordance with
the provisions discussed above; provided, however, that all payments to be made
by Global Funding in connection with the termination of Global Funding as
provided below shall be made by the Delaware trustee on behalf of Global
Funding. For so long as (i) the Delaware trustee, on behalf of Global Funding,
has not rescinded the applicable standing order and (ii) the applicable funding
note indenture trustee, either directly or through an applicable funding note
paying agent, is able to, and does, comply with such standing order, the
Delaware trustee will not be required to establish a separate payment account in
accordance with the provisions discussed above in respect of the applicable
funding note; provided, however, that the Delaware trustee shall establish a
separate payment account to facilitate payments to be made in connection with
the termination of Global Funding as provided below.
6
In connection with the termination of Global Funding and the distribution
of all amounts from each payment account in accordance with the priority
described above, the Delaware trustee will distribute any amounts received in
accordance with the second clause of the second preceding paragraph and any
other remaining assets of Global Funding in the following order of priority:
First: to pay all expenses and other liabilities owed by Global Funding;
and
Second: any remaining funds and other property shall be paid to its trust
beneficial owner.
The Delaware trustee shall deposit in the applicable payment account of
Global Funding, promptly upon receipt, any payments received in respect of any
related collateral. Amounts held in any payment account shall not be invested by
the Delaware trustee.
AMACAR Pacific Corp., as trust beneficial owner of Global Funding, will be
entitled to receive any residual assets of Global Funding upon its liquidation
and dissolution.
Assets and Obligations of the Trusts; Distributions
The notes of a series will represent the unconditional, direct,
non-recourse and unsubordinated obligations of the issuing entity and will rank
equally among themselves. The notes of a series will represent the obligations
of the issuing entity only and will not represent the obligations of, or
interest in, any other person or entity, including Global Funding, Allstate Life
or any of their respective affiliates. Each series of notes will be secured by
and payable solely out of the assets of the issuing trust, and holders of such
series of notes will have no right against the assets of Global Funding or the
assets of any other trust. Any funding agreement and any other collateral
securing the repayment of the obligations under such series of notes will be the
assets of the issuing trust and will not be the assets of Global Funding or the
assets of any other trust. The sole liability of each trust shall be its series
of notes and the sole asset of the trust will be the applicable funding
agreement(s).
On the original issue date of a series of notes, the Delaware trustee shall
establish the payment account for the issuing trust. The Delaware trustee and
any agent of the Delaware trustee shall have exclusive control and sole right of
withdrawal with respect to such payment account for the purpose of making
deposits in and withdrawals from the payment account in accordance with the
applicable trust agreement and the applicable indenture. Subject to the
applicable indenture, all funds or other property received by the Delaware
trustee on behalf of the applicable trust in respect of the applicable
collateral will be deposited in the payment account of the issuing trust. All
funds and other property deposited or held from time to time in the payment
account shall be held by the Delaware trustee in the payment account for the
exclusive benefit of Global Funding, as the trust beneficial owner, subject to
the security interest in the applicable collateral in favor of the indenture
trustee for the benefit of the holders of the applicable series of notes and any
other person for whose benefit the indenture trustee is or will be holding the
applicable collateral, and for distribution by the Delaware trustee as provided
in the applicable trust agreement, including (and subject to) any priority of
payments provided for in the applicable trust agreement.
All funds and other property received by the Delaware trustee on behalf of
the issuing trust in respect of the applicable collateral will be deposited into
the payment account of such trust and will be distributed by such trust as
follows:
First: to the indenture trustee for the payment of all amounts then due and
unpaid upon the applicable series of notes and any other amounts due and
payable, in accordance with the applicable indenture; and
Second: upon the final redemption of the applicable series of notes and
payment of any amounts payable in respect thereof, any remaining funds and
other property deposited into the payment account shall be distributed to
the Delaware trustee for distribution as provided below.
Notwithstanding anything in the trust agreement for an issuing trust to the
contrary, the Delaware trustee, on behalf of the trust, shall execute a standing
order to the indenture trustee pursuant to which the indenture trustee, either
directly or through a paying agent, shall distribute all amounts due and unpaid
in accordance with the provisions discussed above; provided, however, that all
payments to be made by the trust in connection with the termination of the trust
as provided below shall be made by the Delaware trustee on behalf of the trust.
For so long as (i) the Delaware trustee, on behalf of the trust, has not
rescinded the standing order and (ii) the indenture trustee, either directly or
through a paying agent, is able to, and does, comply with the standing order,
the Delaware trustee will not be required to establish a separate payment
account in accordance with the provisions discussed above in respect of the
applicable series of notes; provided, however, that the
7
Delaware trustee shall establish a separate payment account to facilitate
payments made in connection with the termination of the trust as provided below.
In connection with the termination of any trust that is formed and the
distribution of all amounts from the applicable payment account in accordance
with the priority described above, the Delaware trustee will distribute any
amounts received in accordance with the second clause of the second preceding
paragraph and any other remaining assets of the trust in the following order of
priority:
First: to pay all expenses and other liabilities owed by the applicable
trust; and
Second: any remaining funds and other property shall be paid to its trust
beneficial owner.
The Delaware trustee shall deposit in the applicable payment account of the
trust, promptly upon receipt, any payments received with respect to the
applicable collateral. Amounts held in the applicable payment account shall not
be invested by the Delaware trustee.
Global Funding, as trust beneficial owner of each trust that is formed,
will be entitled to receive any residual assets of such trust upon their
liquidation and dissolution.
Bankruptcy Concerns
In each trust agreement, the Delaware trustee, the administrator and the
trust beneficial owner will agree that none of the parties will institute
against the applicable trust any bankruptcy proceeding. Furthermore, in the
depositor trust agreement, the parties will agree that none of them will
institute any bankruptcy proceedings against Global Funding. Also, in each
indenture, the indenture trustee will agree that it will not institute against
the applicable trust or Global Funding any bankruptcy proceeding for payments
due the indenture trustee. However, during an Event of Default under a series of
notes, the indenture trustee (on behalf of the holders of notes of the
applicable series) or the holders of such notes may accelerate payments of
principal and interest under the notes as well as attempt to institute
bankruptcy proceedings against the applicable trust. If a bankruptcy proceeding
is commenced against any trust, Allstate Life and Global Funding do not
anticipate that the assets of such trust will be consolidated with the assets of
any other party. As the sole asset of each trust will be funding agreement(s)
issued by Allstate Life, upon a proceeding for Allstate Life's liquidation,
rehabilitation, conservation or supervision or similar event, an Event of
Default under the notes issued by each trust will occur and the indenture
trustee on behalf of the holders of each series of notes will have a claim
against Allstate Life in such proceeding. No other creditors or policyholders of
Allstate Life or Global Funding should have a claim against the funding
agreement(s) held by each trust or any claims thereunder.
Delaware Trustee of Global Funding and the Trusts
General
Wilmington Trust Company has served as trustee in connection with numerous
registered and unregistered transactions involving the securitization of funding
agreements since 1996.
Allstate Life Global Funding Trusts
Pursuant to each trust agreement, the Delaware trustee will be the sole
trustee of the applicable trust. The Delaware trustee will manage the business
and affairs of each trust in accordance with the Delaware Statutory Trust Act;
provided, however, that the Delaware trustee will undertake to perform only such
duties as are specifically set forth in the applicable trust agreement and as it
may be directed from time to time by the administrator, the trust beneficial
owner and the indenture trustee in accordance with the terms of the applicable
trust agreement and the applicable indenture.
Under each trust agreement, it shall be the duty of the Delaware trustee to
discharge, or cause to be discharged, all of its responsibilities pursuant to
the terms of the applicable trust agreement, or any other documents or
instruments to which it will be a party, and to administer the issuing trust, in
accordance with the provisions of the applicable trust agreement and the other
program documents and any other documents or instruments to which the issuing
trust will be a party. Notwithstanding the foregoing, the Delaware trustee shall
be deemed to have discharged its duties and responsibilities under the
applicable trust agreement and any other documents or instruments to which the
issuing trust is a party to the extent (a) such duties and responsibilities
shall have been performed by the administrator and (b) the administrator is
required or permitted under the
8
applicable trust agreement, under the administrative services agreement or under
any other documents or instruments to which the issuing trust is a party, to
perform such act or discharge such duty of the Delaware trustee or the issuing
trust; provided, however, that the Delaware trustee shall not be held liable for
the default or failure of the administrator to carry out its required
obligations under the trust agreement or thereunder but only to the extent such
obligations are not also required to be carried out by the Delaware trustee.
Under each trust agreement, among other items, the Delaware trustee, on
behalf of the issuing trust, will have the power and authority to:
o execute and deliver on behalf of the issuing trust the notes in
accordance with the applicable trust agreement and the applicable
indenture;
o cause the issuing trust to perform the applicable trust agreement and
to enter into, and to execute, deliver and perform on behalf of the
issuing trust, the documents contained in the series instrument and
the closing instrument for the applicable series of notes, the
distribution agreement, the applicable notes, each applicable funding
agreement and such other certificates, other documents or agreements
as may be necessary, contemplated by or desirable in connection with
the purposes and function of the issuing trust or any of the
above-referenced documents;
o subject to the applicable provisions of the relevant indenture,
receive and maintain custody of each applicable funding agreement and
exercise all of the rights, powers and privileges of an owner or
policyholder of each applicable funding agreement;
o grant to the indenture trustee a security interest in the collateral
for the applicable series of notes and pledge and collaterally assign
the rights, title and interest of the applicable trust in such
collateral to the indenture trustee for the benefit of the holders of
notes of the applicable series and any other person for whose benefit
the indenture trustee is or will be holding the collateral, and seek
release of such security interest upon payment in full of all amounts
required to be paid with respect to the applicable series of notes
pursuant to the terms and conditions of such notes and the applicable
indenture;
o establish the payment account for the applicable trust;
o send notices regarding the applicable notes and the applicable funding
agreement(s) to Allstate Life, the indenture trustee, the rating
agencies, the trust beneficial owner, the applicable agents and any
other person entitled thereto in accordance with the terms of the
applicable notes, the indenture, each applicable funding agreement and
the applicable trust agreement;
o take all actions necessary or appropriate to enable the applicable
trust to comply with the provisions of the trust agreement regarding
income tax treatment;
o after the occurrence of an event of default under the applicable
funding agreement(s) actually known to a responsible officer of the
Delaware trustee, subject to the applicable provisions of the relevant
indenture, take any action as it may from time to time determine
(based solely upon the advice of counsel) is necessary or advisable to
give effect to the terms of the trust agreement and to protect and
conserve the applicable collateral for the benefit of the holders of
the applicable series of notes and any other person for whose benefit
the indenture trustee is or will be holding the collateral and, within
five business days after the occurrence of an event of default under
the applicable funding agreement(s) actually known to a responsible
officer of the Delaware trustee, give notice thereof to the
administrator, the trust beneficial owner and the indenture trustee;
o to the extent permitted by the applicable trust agreement, to
participate in the winding up of the affairs of and liquidation of the
applicable trust and assist with the preparation, execution and filing
of a certificate of cancellation with the Secretary of State of the
State of Delaware;
o subject to the applicable provisions of the applicable indenture, to
take any action and to execute any documents on behalf of the
applicable trust, incidental to the foregoing as the Delaware trustee
may from time to time determine (based on the advice of counsel) is
necessary or advisable to give effect to the terms of the applicable
trust agreement;
9
o execute and file documents with the Secretary of State of the State of
Delaware; and
o accept service of process on behalf of the issuing trust in the State
of Delaware.
Under each trust agreement, the Delaware trustee shall, based on the advice
of counsel, defend against all claims and demands of all persons at any time
claiming any lien on any of the assets of the applicable trust adverse to the
interest of the applicable trust or any holder of the applicable series of
notes, other than the security interest in the collateral granted in favor of
the indenture trustee for the benefit of each holder of the applicable series of
notes and any other person for whose benefit the indenture trustee is or will be
holding the collateral.
With respect to any trust, the Delaware trustee will not be liable under
the applicable trust agreement under any circumstances, except for (i) its own
willful misconduct, bad faith or gross negligence; (ii) its failure to use
ordinary care to disburse funds or (iii) the inaccuracy of any representation or
warranty contained in the applicable trust agreement made by the Delaware
trustee.
The Delaware trustee may resign as Delaware trustee, or the administrator,
acting on behalf of the applicable trust, may, in its sole discretion, remove
the Delaware trustee, in each case upon not less than thirty (30) days' prior
notice to the Delaware trustee, the indenture trustee and each rating agency
then rating the programs or the applicable series of notes. Upon any resignation
or removal of the Delaware trustee, the administrator, acting on behalf of the
applicable trust, shall appoint a successor Delaware trustee. If at any time the
Delaware trustee shall cease to be eligible to serve as trustee under the
applicable trust agreement and shall have not resigned, or if at any time the
Delaware trustee shall become incapable of acting or shall be adjudged bankrupt
or insolvent, or a receiver for the Delaware trustee or for its property shall
be appointed, or any public officer shall take charge or control of the Delaware
trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the administrator may remove the Delaware
trustee.
Any resignation or removal of the Delaware trustee and appointment of a
successor Delaware trustee pursuant to any of the provisions of the applicable
trust agreement shall not become effective until all fees and expenses,
including any indemnity payments, due to the outgoing Delaware trustee have been
paid and until acceptance of appointment by the successor Delaware trustee
pursuant to the applicable trust agreement.
Global Funding
Pursuant to the depositor trust agreement, the Delaware trustee will be the
sole trustee of Global Funding. The Delaware trustee will manage the business
and affairs of Global Funding in accordance with the Delaware Statutory Trust
Act; provided, however, that the Delaware trustee has undertaken to perform only
such duties as are specifically set forth in the depositor trust agreement and
as it may be directed from time to time by the administrator or the applicable
trust beneficial owner in accordance with the terms of the depositor trust
agreement.
Under the depositor trust agreement, it shall be the duty of the Delaware
trustee to discharge, or cause to be discharged, all of its responsibilities
pursuant to the terms of the depositor trust agreement, or any other documents
or instruments to which it will be a party, and to administer Global Funding, in
accordance with the provisions of the depositor trust agreement and the other
program documents and any other documents or instruments to which Global Funding
will be a party. Notwithstanding the foregoing, the Delaware trustee shall be
deemed to have discharged its duties and responsibilities under the depositor
trust agreement and any other documents or instruments to which Global Funding
is a party to the extent (a) such duties and responsibilities shall have been
performed by the administrator and (b) the administrator is required or
permitted under the depositor trust agreement, under the depositor
administrative services agreement or under any other documents or instruments to
which Global Funding is a party, to perform such act or discharge such duty of
the Delaware trustee or Global Funding; provided, however, that the Delaware
trustee shall not be held liable for the default or failure of the administrator
to carry out its required obligations under the depositor trust agreement or
thereunder but only to the extent such obligations are not also required to be
carried out by the Delaware trustee.
Under the depositor trust agreement, among other items, the Delaware
trustee, on behalf of Global Funding, will have the power and authority to:
o execute and deliver the funding notes and the amended and restated
certificate of trust in accordance with the depositor trust agreement;
10
o cause Global Funding to perform the depositor trust agreement and to
enter into, and to execute, deliver and perform, the funding notes,
each series instrument and each closing instrument (including all
relevant documents contained in each series instrument and each
closing instrument), the distribution agreement, the depositor name
licensing agreement, the depositor support agreement, the depositor
administrative services agreement, each other program document and
such other certificates, other documents or agreements as may be
necessary, contemplated by or desirable in connection with the
purposes and function of Global Funding or any of the above-referenced
documents;
o receive custody of any funding agreement and exercise on behalf of
Global Funding all of the rights, powers and privileges of an owner or
policyholder of each such funding agreement in accordance with the
terms of such funding agreement and any related documents;
o cause Global Funding to immediately pledge and collaterally assign
each funding agreement to the funding note indenture trustee and to
immediately thereafter assign absolutely to, and deposit into, the
relevant trust the relevant funding agreement(s);
o establish each payment account for Global Funding and a separate
payment account to facilitate payments to the trust beneficial owner;
o send any notices regarding any funding note to Allstate Life, the
rating agencies, the trust beneficial owner of Global Funding and the
applicable agents under the relevant terms agreement in accordance
with the terms of the relevant funding note and the depositor trust
agreement;
o take all actions necessary and appropriate to enable Global Funding to
comply with the provisions of the depositor trust agreement regarding
income tax treatment;
o after the occurrence of an event of default under a funding agreement
actually known to a responsible officer of the Delaware trustee, take
any action as it may from time to time determine (based solely upon
the advice of counsel) is necessary or advisable to give effect to the
terms of the depositor trust agreement (without consideration of the
effect of any such action on any particular trust) and, within five
business days after the occurrence of an event of default under a
funding agreement actually known to a responsible officer of the
Delaware trustee, give notice thereof to the administrator and the
trust beneficial owner;
o to the extent permitted by the depositor trust agreement, to
participate in the winding up of the affairs of and liquidation of
Global Funding and assist with the preparation, execution and filing
of a certificate of cancellation with the Secretary of State of the
State of Delaware;
o take any action and to execute any documents on behalf of Global
Funding, incidental to the foregoing, as the Delaware trustee may from
time to time determine (based on the advice of counsel) is necessary
or advisable to give effect to the terms of the depositor trust
agreement;
o execute and file documents with the Secretary of State of the State of
Delaware; and
o accept service of process on behalf of Global Funding in the State of
Delaware.
Under the depositor trust agreement, the Delaware trustee shall, based on
the advice of counsel, defend against all claims and demands of all persons at
any time claiming any lien on any of the assets of Global Funding adverse to the
interest of Global Funding or any holder of the applicable funding note.
The Delaware trustee will not be liable under the depositor trust agreement
under any circumstances, except for (i) its own willful misconduct, bad faith or
gross negligence; (ii) its failure to use ordinary care to disburse funds or
(iii) the inaccuracy of any representation or warranty contained in the
applicable trust agreement made by the Delaware trustee.
The Delaware trustee may resign as Delaware trustee, or the administrator,
acting on behalf of Global Funding, may, in its sole discretion, remove the
Delaware trustee, in each case upon not less than thirty (30) days' prior notice
to the Delaware trustee, each funding note indenture trustee, each indenture
trustee and each rating agency then rating the programs or any applicable series
of notes. Upon any resignation or removal of the Delaware trustee, the
administrator, acting on behalf of the trust, shall appoint a successor Delaware
trustee. If at any time the Delaware trustee shall cease to be eligible to serve
11
as trustee under the depositor trust agreement and shall have not resigned, or
if at any time the Delaware trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver for the Delaware trustee or for
its property shall be appointed, or any public officer shall take charge or
control of the Delaware trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the administrator may remove
the Delaware trustee.
Any resignation or removal of the Delaware trustee and appointment of a
successor Delaware trustee pursuant to any of the provisions of the depositor
trust agreement shall not become effective until all fees and expenses,
including any indemnity payments, due to the outgoing Delaware trustee have been
paid and until acceptance of appointment by the successor Delaware trustee
pursuant to the depositor trust agreement.
Administrator of Global Funding and the Trusts
The Delaware trustee, on behalf of Global Funding, executed the amended and
restated administrative services agreement of Global Funding, dated as of August
16, 2005 (as amended, supplemented, modified, restated or replaced from time to
time, the "depositor administrative services agreement"), with AMACAR Pacific
Corp., in its capacity as the administrator of Global Funding. AMACAR Pacific
Corp. will also be the administrator of each trust pursuant to separate
administrative services agreements. In such capacities the administrator will be
responsible for various administrative functions relating to the business of
Global Funding and the trusts. See "Description of the Administrative Services
Agreements" for a description of the administrative functions for which AMACAR
Pacific Corp. will be responsible.
Beneficial Ownership of Global Funding and the Trusts
Global Funding is beneficially owned by AMACAR Pacific Corp. (including any
successor, the "trust beneficial owner"). The trust beneficial owner's only
interest in Global Funding is the $1,000 amount invested in Global Funding prior
to the issuance of any notes or any funding notes. No other equity contribution
will be made to Global Funding by any party. The principals of the trust
beneficial owner have advised that it is ultimately owned by several
individuals, none of whom are affiliated with Allstate Life or The Allstate
Corporation. The investment by the trust beneficial owner will not be secured by
the collateral relating to any series of notes.
Global Funding will be the beneficial owner of each trust that is formed.
No equity contribution will be made to any trust by any party.
Negative Covenants of Global Funding
So long as the depositor trust agreement remains in effect, Global Funding
(and the Delaware trustee and the administrator acting on behalf of Global
Funding) shall not undertake any business, activity or transaction except as
expressly provided for or contemplated by the depositor trust agreement or by
any funding note indenture. In particular, Global Funding shall not, except as
otherwise contemplated by the depositor trust agreement or by any funding note
indenture:
o sell, transfer, exchange, assign, lease, convey or otherwise dispose
of any assets held in Global Funding, except for any funding
agreements (as of the date of the depositor trust agreement or
thereafter acquired);
o engage in any business or activity other than in connection with, or
relating to, (A) the performance of the depositor trust agreement and
the execution, delivery and performance of any documents, including
the program documents (other than the depositor trust agreement as set
forth above), relating to the funding notes and the transactions
contemplated thereby and (B) any activities, including entering into
agreements that are necessary, suitable or convenient to accomplish
the purposes of Global Funding specified under "-General";
o incur, directly or indirectly, any debt except for each funding note;
o create, incur, assume or permit any lien or other encumbrance on any
of its properties or assets owned or thereafter acquired, or any
interest therein or the proceeds thereof except for the lien created
pursuant to each funding note indenture;
o amend, modify or fail to comply with any material provision of the
depositor trust agreement, except for any amendment or modification of
the depositor trust agreement expressly permitted under the depositor
trust agreement;
12
o own any subsidiary, except for the issuing trusts, or lend or advance
any funds to, or make any investment in, any person, except in
connection with any funding notes, the depositor administrative
services agreement, the depositor support agreement and any funding
agreement;
o directly or indirectly declare or make any distribution or other
payment to, or redeem or otherwise acquire or retire for value the
interests of, the trust beneficial owner if any amount under the
funding notes or the notes is due and unpaid, or directly or
indirectly redeem or otherwise acquire or retire for value any debt
other than any funding note if any funding note remains outstanding;
o become required to register as an "investment company" under and as
such term is defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
o enter into any transaction of merger or consolidation or liquidate or
dissolve itself (or, to the fullest extent permitted by law, suffer
any liquidation or dissolution), or acquire by purchase or otherwise
all or substantially all the business or assets of, or any stock or
other evidence of beneficial ownership of, any person, except for the
issuing trusts;
o take any action that would cause Global Funding not to be either
ignored or treated as a "grantor trust" for United States Federal
income tax purposes;
o have any employees other than the Delaware trustee, the administrator
or any other persons necessary to conduct its business and enter into
transactions contemplated under the program documents;
o have an interest in any bank account other than those accounts
required or permitted under the program documents;
o permit any affiliate, employee or officer of Allstate Life or any
agent of Allstate Life or any agent to be a trustee of Global Funding;
o issue any funding note unless (A) Global Funding has purchased or will
simultaneously purchase the relevant funding agreement(s) from
Allstate Life and (B) Global Funding will grant a security interest
in, pledge and collaterally assign the relevant funding agreement(s)
to the funding note indenture trustee and will immediately thereafter
assign absolutely to and deposit into the relevant trust the relevant
funding agreement(s); and (C) the relevant funding note will thereupon
be surrendered and cancelled by Global Funding immediately upon such
surrender, and such cancellation shall operate as a redemption and
satisfaction of the funding note;
o commingle any of its assets with assets of any of Global Funding's
affiliates, or guarantee any obligation of any of Global Funding's
affiliates;
o (A) permit the validity or effectiveness of any funding note indenture
or the security interest securing the funding note issued pursuant to
any funding note indenture to be impaired, or permit such security
interest to be amended, hypothecated, subordinated, terminated or
discharged, (B) permit any person to be released from any covenants or
obligations under any funding agreement securing any funding note,
except as expressly permitted thereunder, under the applicable funding
note indenture, the depositor trust agreement, or each applicable
funding agreement, (C) create, incur, assume, or permit any lien or
other encumbrance (other than the security interests securing the
funding notes) on any of its properties or assets (whenever acquired),
or any interest therein or the proceeds thereof, or (D) permit a lien
with respect to any collateral not to constitute a valid first
priority perfected security interest in such collateral securing the
related funding note;
o issue any funding note unless Allstate Life has affirmed in writing to
Global Funding that it has made changes to its books and records to
reflect the grant of a security interest in, and the making of an
assignment for collateral purposes of, the relevant funding
agreement(s) by Global Funding to the applicable funding note
indenture trustee in accordance with the terms of such funding
agreement(s) and the applicable funding note indenture and Global
Funding has taken such other steps as may be necessary to cause the
security interest in or assignment for all collateral purposes of, the
applicable collateral to be perfected for purposes of the Uniform
Commercial Code in effect in the State of New York (the "UCC") or
effective against its creditors and subsequent purchasers of such
collateral pursuant to insurance or other state laws; or
13
o make any deduction or withholding from any payment of principal of or
interest on any funding note (other than amounts that may be required
to be withheld or deducted from such payments under the Internal
Revenue Code of 1986, as amended (the "Code"), or any other applicable
tax law) by reason of the payment of any taxes levied or assessed upon
any portion of the related collateral except to the extent specified
in the applicable funding note indenture or the relevant funding note
certificate or supplemental funding note indenture.
Negative Covenants of the Trusts
The trust agreement of each issuing trust will provide that so long as the
trust agreement remains in effect, the trust (and the Delaware trustee and the
administrator acting on behalf of the trust) shall not undertake any business,
activity or transaction except as expressly provided for or contemplated by the
trust agreement or the applicable indenture. In particular, the issuing trust
shall not, except as otherwise contemplated by such trust agreement or the
applicable indenture:
o sell, transfer, exchange, assign, lease, convey or otherwise dispose
of any assets held in the trust (as of the date of the trust agreement
or thereafter acquired), including, without limitation, any portion of
the applicable collateral;
o engage in any business or activity other than in connection with, or
relating to, (A) the performance of the trust agreement and the
execution, delivery and performance of any documents, including the
program documents (other than the trust agreement as set forth above),
relating to the applicable series of notes and the transactions
contemplated thereby, (B) the issuance of the applicable series of
notes pursuant to the applicable indenture and (C) any activities,
including entering into agreements that are necessary, suitable or
convenient to accomplish the purposes of the trust specified therein;
o incur, directly or indirectly, any debt except for the applicable
series of notes;
o amend, modify or fail to comply with any material provision of the
trust agreement, except for any amendment or modification of the trust
agreement expressly permitted under the trust agreement or under the
applicable indenture or the relevant funding agreement(s);
o own any subsidiary or lend or advance any funds to, or make any
investment in, any person, except for an investment in the applicable
funding agreement(s), the applicable funding note or the investment of
any funds of the trust held by the indenture trustee, a paying agent,
the registrar, the Delaware trustee or the administrator as provided
in (or in the documents or agreements contained in) the applicable
series instrument or the applicable closing instrument, or in any
applicable funding agreement;
o directly or indirectly declare or pay a distribution or make any
distribution or other payment, or redeem or otherwise acquire or
retire for value any securities other than the applicable series of
notes, provided that the trust may declare or pay a distribution or
make any distribution or other payment to the trust beneficial owner
in compliance with the trust agreement if the trust has paid or made
provision for the payment of all amounts due to be paid on the
applicable series of notes, and pay all of its debt, liabilities,
obligations and expenses, the payment of which is provided for under
the applicable support agreement;
o become required to register as an "investment company" under and as
such term is defined in the Investment Company Act;
o enter into any transaction of merger or consolidation or liquidate or
dissolve itself (or, to the fullest extent permitted by law, suffer
any liquidation or dissolution), or acquire by purchase or otherwise
all or substantially all the business or assets of, or any stock or
other evidence of beneficial ownership of, any person;
o take any action that would cause the trust not to be either ignored or
treated as a "grantor trust" for United States Federal income tax
purposes;
o have any employees other than the Delaware trustee, the administrator
or any other persons necessary to conduct its business and enter into
transactions contemplated under the program documents;
14
o have an interest in any bank account other than (A) those accounts
contemplated by the program documents, and (B) those accounts
expressly permitted by the indenture trustee; provided that any such
further account or such interest of the trust therein shall be charged
or otherwise secured in favor of the indenture trustee on terms
acceptable to the indenture trustee;
o permit any affiliate, employee or officer of Allstate Life or any
agent of Allstate Life or Agent to be a trustee of the trust;
o issue the applicable series of notes unless Allstate Life has affirmed
in writing to the trust that it has made changes to its books and
records to reflect the grant of a security interest in, and the making
of an assignment for collateral purposes of, the relevant funding
agreement(s) by the trust to the indenture trustee in accordance with
the terms of such funding agreement(s) and the trust has taken such
other steps as may be necessary to cause the security interest in or
assignment for all collateral purposes of, the collateral to be
perfected for purposes of the UCC or effective against its creditors
and subsequent purchasers of the collateral pursuant to insurance or
other state laws;
o make any deduction or withholding from any payment of principal of or
interest on the notes (other than amounts that may be required to be
withheld or deducted from such payments under the Code or any other
applicable tax law) by reason of the payment of any taxes levied or
assessed upon any portion of the collateral except to the extent
specified in the applicable indenture or a note certificate or
supplemental indenture;
o commingle any of its assets with assets of any of the trust's
affiliates, or guarantee any obligation of any of the trust's
affiliates; or
o (A) permit the validity or effectiveness of the applicable indenture
or the security interest securing the applicable series of notes to be
impaired, or permit such security interest to be amended,
hypothecated, subordinated, terminated or discharged, (B) permit any
person to be released from any covenants or obligations under any
funding agreement securing the applicable series of notes, except as
expressly permitted thereunder, under the applicable indenture, the
applicable trust agreement, or each applicable funding agreement, (C)
create, incur, assume, or permit any lien or other encumbrance (other
than the security interest securing the applicable series of notes) on
any of its properties or assets, or any interest therein or the
proceeds thereof, or (D) permit a lien with respect to the applicable
collateral not to constitute a valid first priority perfected security
interest in the collateral securing the applicable series of notes.
Amendments of Depositor Trust Agreement
The depositor trust agreement may be amended from time to time by the
parties thereto by a written instrument executed by each of the parties, in any
way that is not inconsistent with the intent of the depositor trust agreement,
including, without limitation to: (i) cure any ambiguity, (ii) correct,
supplement or modify any provision of the depositor trust agreement that is
inconsistent with another provision of the depositor trust agreement or (iii)
modify, eliminate or add to any provisions of the depositor trust agreement to
the extent necessary to ensure that Global Funding will, at all times, for
United States Federal income tax purposes be either ignored or treated as a
"grantor trust" or to ensure that Global Funding will not be required to
register as an "investment company" under the Investment Company Act and no such
amendment shall require the consent of any other person, except to the extent
specified in the second and third paragraphs below.
So long as any funding note remains outstanding, except as provided in the
two paragraphs immediately following below, any amendment to the depositor trust
agreement that would adversely affect, in any material respect, the terms of any
funding note, other then any amendment of the type contemplated by clause (iii)
of the immediately preceding paragraph, shall require the prior consent of the
holders or holders of a majority of the outstanding principal amount of funding
notes.
So long as any funding note remains outstanding, the depositor trust
agreement may not be amended to (i) change the amount or timing of any payment
of any funding note or (ii) impair the right of the applicable trust to
institute suit for the enforcement of any right for principal and interest or
other distribution without the consent of each affected holder.
The Delaware trustee shall not be required to enter into any amendment to
the depositor trust agreement which adversely affects its own rights, duties or
immunities under the depositor trust agreement.
15
Amendments of Trust Agreements
The trust agreement of each issuing trust will provide that the trust
agreement may be amended from time to time by the Delaware trustee and the
administrator by a written instrument executed by the Delaware trustee and the
administrator, in any way that is not inconsistent with the intent of the trust
agreement, including, without limitation to: (i) cure any ambiguity, (ii)
correct, supplement or modify any provision of the trust agreement that is
inconsistent with another provision of the trust agreement or (iii) modify,
eliminate or add to any provisions of the trust agreement to the extent
necessary to ensure that the trust will, at all times, for United States Federal
income tax purposes be either ignored or treated as a grantor trust or to ensure
that the trust will not be required to register as an investment company under
the Investment Company Act and no such amendment shall require the consent of
any other person, except to the extent specified in the second and third
paragraphs below.
So long as any notes of the applicable series remain outstanding, except as
provided in the two paragraphs immediately following below, any amendment to the
applicable trust agreement that would adversely affect, in any material respect,
the terms of any notes of such series, other than any amendment of the type
contemplated by clause (iii) of the immediately preceding paragraph, shall
require the prior consent of the holders of a majority of the outstanding
principal amount of the notes of the applicable series.
So long as any notes of the applicable series remain outstanding, the
applicable trust agreement may not be amended to (i) change the amount or timing
of any payment of any notes of the applicable series or (ii) impair the right of
any holder thereof to institute suit for the enforcement of any right for
principal and interest or other distribution, in each case without the consent
of each affected holder.
The Delaware trustee shall not be required to enter into any amendment to
any trust agreement which adversely affects its own rights, duties or immunities
under the applicable trust agreement.
Relationships among Global Funding, the Trusts, Allstate Life and Allstate
Insurance Company
The following describes the relationships among Global Funding, the trusts,
Allstate Life and Allstate Insurance Company:
o pursuant to an amended and restated name licensing agreement, dated as
of -, 2007, Allstate Insurance Company has granted Global Funding, and
in connection with any issuance and sale of notes, pursuant to a
separate name licensing agreement Allstate Insurance Company will
grant the issuing trust, a non-exclusive license to use the name
"Allstate" and other licensed marks as provided therein;
o Allstate Life and Global Funding entered into an amended and restated
support and expenses agreement dated as of March 15, 2006, pursuant to
which Allstate Life agreed, among other things, to pay certain costs
and expenses relating to the offering, sale and issuance of each
funding note and certain costs, expenses and taxes incurred by Global
Funding, and to indemnify Global Funding with respect to certain
matters;
o in connection with the issuance of a series of notes, pursuant to a
separate support and expenses agreement, Allstate Life agrees, among
other things, to pay certain costs and expenses relating to the
offering, sale and issuance of the applicable series of notes and
certain costs, expenses and taxes incurred by the issuing trust, and
to indemnify the issuing trust with respect to certain matters; and
o Allstate Life, Global Funding and the applicable issuing trust enter
into the documents contemplated by the medium term note program or the
Allstate Life(R) CoreNotes(R) program in connection with the issue and
sale of each series of notes.
Except as set forth above, none of The Allstate Corporation, Allstate
Insurance Company, Allstate Life or any of their respective officers, directors,
subsidiaries or affiliates owns or will own any beneficial interest in Global
Funding or any trust nor has any of these persons or entities entered or will
enter into any agreement with Global Funding or any trust.
No trust will be affiliated with Allstate Life.
Neither The Allstate Corporation, Allstate Insurance Company, Allstate Life
nor any of their respective officers, directors, subsidiaries or affiliates
owns, or will own, any beneficial interest in the depositor or the trusts.
16
Neither The Allstate Corporation, Allstate Life nor any of their respective
officers, directors, subsidiaries or affiliates is affiliated with the Delaware
trustee, the trust beneficial owner or the administrator of any trust or Global
Funding, any indenture trustee or any funding note indenture trustee. Neither
The Allstate Corporation, Allstate Insurance Company, Allstate Life nor any of
their respective officers, directors, subsidiaries or affiliates is affiliated
with any beneficial owner of AMACAR Pacific Corp.
Costs and Expenses of Global Funding and the Trusts
Costs and expenses of Global Funding and each trust shall be paid by
Allstate Life pursuant to the applicable support agreement to the extent
provided therein. See "Description of Support and Expenses Agreements."
Records and Financial Statements of Global Funding and the Trusts
Each trust will:
o maintain separate and distinct records; and
o hold and account for its assets separately from the assets of Global
Funding and the assets of the other trusts.
17
DESCRIPTION OF ALLSTATE LIFE INSURANCE COMPANY
Allstate Life Insurance Company is the sponsor of the programs. Allstate
Life was organized in 1957 as a stock life insurance company under the laws of
the State of Illinois. It conducts substantially all of its life insurance
operations directly or through wholly owned United States subsidiaries. It is a
wholly owned subsidiary of Allstate Insurance Company ("AIC"), a stock
property-liability insurance company organized under the laws of the State of
Illinois. All of the outstanding stock of AIC is owned by The Allstate
Corporation, a publicly owned holding company incorporated under the laws of the
State of Delaware.
The Allstate Corporation, together with its subsidiaries, is the second
largest personal property and casualty insurer in the United States on the basis
of 2005 statutory premiums earned. Widely known through the "You're In Good
Hands With Allstate(R)" slogan, The Allstate Corporation, through its
subsidiaries, provides insurance products to approximately 17 million households
and has approximately 14,800 exclusive agencies and financial specialists in the
United States and Canada.
Allstate Life sells life insurance, retirement and investment products to
individual and institutional customers through several distribution channels.
The principal individual products are deferred and immediate fixed annuities,
and interest-sensitive, traditional and variable life insurance. Allstate Life
also distributes variable annuities through its bank distribution partners;
however, this product is fully reinsured. The principal institutional product is
funding agreements backing medium-term notes.
Allstate Life distributes its products to individuals through multiple
intermediary distribution channels, including Allstate exclusive agencies,
independent agents, banks, broker-dealers, and specialized structured settlement
brokers. Allstate Life sells funding agreements to unaffiliated trusts used to
back medium-term notes issued to institutional and individual investors.
Since 1999, Allstate Life has participated in four securitization programs
for the issuance of medium term notes secured by funding agreements. The first
program in which Allstate Life participated was a securitization program under
which notes were offered in private placement transactions by a Cayman Islands
limited liability company only to foreign investors, in reliance on Regulation S
under the Securities Act. Under this program, in connection with each offering
of notes, Allstate Life sells a funding agreement to the issuing entity, which
uses the proceeds of the note issuance to pay for the funding agreement and
holds the funding agreement as its principal asset. The notes are secured with a
lien on the funding agreement. Allstate Life makes payments under the funding
agreement which, in turn, are used by the issuing entity to pay interest and
principal when due under the applicable notes.
In September 2000, Allstate Life began participating in a securitization
program (the "GMTN I program") under which a Delaware limited liability company
issued funding agreement-backed medium term notes in private placement
transactions to both "qualified institutional buyers" in the United States in
reliance on Rule 144A under the Securities Act, and to foreign investors. In
addition to the notes, the issuing entity also offered auction market equity
securities ("AMES"). Under the GMTN I program, the future payment stream of
Allstate Life's funding agreements was used to back the issuing entity's
obligations under both the applicable series of notes and the AMES. In addition,
the notes of each series are secured with a lien on each applicable funding
agreement.
Since August 2003, Allstate Life has been participating in an additional
global funding agreement-backed medium term note program (the "GMTN II
program"). The GMTN II structure does not include the AMES feature. Under the
GMTN II program, notes are issued by a Delaware series trust which uses the
proceeds from each offering to acquire from Allstate Life a funding agreement
with pricing terms matching those of the underlying notes. Each funding
agreement is pledged by the issuing entity to the indenture trustee to secure
the issuing entity's obligations under the relevant series of notes.
Since April 2004, Allstate Life has been participating in the programs for
the issuance of secured medium term notes (including the Allstate Life(R)
CoreNotes(R) program) described in this prospectus and the applicable prospectus
supplements.
Under all of the above described securitization programs, Allstate Life is
responsible for certain fees and expenses of, and has certain indemnification
obligations with respect to, each of the issuing entities and their respective
service
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providers. Allstate Life also has certain indemnification obligations for
securities law liabilities to initial purchasers of notes issued under the above
described programs.
As of June 25, 2007, funding agreements having an aggregate principal
amount of $14,265,101,381 have been issued and were outstanding in connection
with the securitization programs described above.
Allstate Life is a "significant obligor" within the meaning of the
applicable SEC regulations. This prospectus and any accompanying prospectus
supplement and pricing supplement incorporate by reference the consolidated
financial statements of Allstate Life and its subsidiaries meeting the
requirements of the applicable SEC regulations for financial statements of
significant obligors.
Allstate Life's principal executive offices are located at 3100 Sanders
Road, Northbrook, Illinois 60062 and its telephone number is (847) 402-5000.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges for
Allstate Life and its subsidiaries for the periods indicated:
Three months
ended March 31, For the Year Ended December 31,
--------------- -------------------------------
2007 2006 2006 2005 2004 2003 2002
---- ---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges(1) 1.3x 1.2x 1.2x 1.3x 1.3x 1.3x 1.2x
- ---------------
(1) For purposes of this computation, earnings consist of income from
continuing operations before income taxes and the cumulative effect of
change in accounting principle plus fixed charges and dividends on
redeemable preferred securities. Fixed charges consist of the interest
on indebtedness, interest factor of annual rental expense, dividends
on redeemable preferred securities and interest credited to
contractholder funds.
USE OF PROCEEDS
In connection with the issuance and sale of each series of notes, the
issuing trust will use the net proceeds received from the offering of the
applicable series of notes to purchase a funding note from Global Funding.
Global Funding will use the proceeds received from the sale of such funding note
to purchase one or more funding agreements issued by Allstate Life. Allstate
Life intends to use the net proceeds from the sale of each funding agreement to
purchase investment assets.
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DESCRIPTION OF THE NOTES
This prospectus relates to:
o one or more series of secured medium term notes to be offered
primarily to retail investors which are referred to as Allstate
Life(R) CoreNotes(R); and
o one or more series of secured medium term notes to be offered
primarily to institutional investors, which one or more newly created
separate and distinct Delaware special purpose statutory trusts that
may be formed from time to time may offer.
Allstate Life(R) CoreNotes(R) will be offered from time to time to the
public, with payment of principal of, any premium and interest on, and any other
amounts due and owing with respect to, the Allstate Life(R) CoreNotes(R) to be
secured by one or more applicable funding agreements issued by Allstate Life and
assigned absolutely to, and deposited into, the issuing trust by Global Funding.
The terms of the secured medium term notes are identical in all material
respects to the terms of the Allstate Life(R) CoreNotes(R), except that the
secured medium term notes:
o may be issued as amortizing notes;
o may be denominated in one or more foreign currencies;
o will not contain a survivor's option, permitting optional repayment of
notes of a series, subject to certain limitations, prior to maturity,
if requested, following the death of the beneficial owner of notes of
that series; and
o may contain a provision providing for the redemption of the notes if
Allstate Life is required to pay additional amounts on the related
funding agreements pursuant to the applicable pricing supplement and
Allstate Life exercises its right to redeem the funding agreements.
The following is a general description of the terms of the notes. Specific
terms of a series of notes will be provided in the applicable pricing supplement
which will supplement this prospectus and the applicable prospectus supplement.
Notes will be issued in one or more series. The terms of each indenture (as
defined below) will not limit the amount of notes that the relevant trust may
issue. Unless otherwise specified in the applicable prospectus supplement or the
applicable pricing supplement, each series of notes will be secured by one or
more funding agreements relating to that series of notes.
Each trust may issue notes at a discount below their stated principal
amount, bearing no interest or interest at a rate that at the time of issuance
is below market rates.
None of the trusts will issue notes that may be repaid at the option of the
holders prior to the stated maturity date if such issuance would cause the
relevant trust to fail to satisfy the applicable requirements for exemption
under Rule 3a-7 under the Investment Company Act and all applicable rules,
regulations and interpretations thereunder.
Certain federal income tax considerations and other relevant considerations
are described in the applicable prospectus supplement or pricing supplement.
The decision to issue notes to investors and purchase funding agreements or
funding notes (in the case of an issuing trust) issued by Allstate Life (or
Global Funding in the case of funding notes) rests solely with Global Funding or
the issuing trust (in the case of funding notes). Global Funding and the trusts
are under no obligation to Allstate Life or any other person or entity to issue
any notes or purchase any funding agreements.
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DESCRIPTION OF THE INDENTURES
Each series of notes will be issued by a trust pursuant to a separate
indenture (each, an "indenture") to be entered into among the issuing trust and
the other parties specified therein, including The Bank of New York Trust
Company, N.A. ("The Bank of New York Trust Company") or another entity specified
in the applicable indenture, in its capacity as indenture trustee, (including,
in each case, any successor, the "indenture trustee"). Each indenture will be
subject to and qualified under the Trust Indenture Act. Each indenture will
adopt the standard indenture terms, which are filed as an exhibit with the SEC
and are incorporated into this prospectus by reference.
The following summary highlights some of the provisions included in the
standard indenture terms, but it may not contain all of the information that is
important to you. The standard indenture terms are not restated in their
entirety and you should read the standard indenture terms, which are attached as
an exhibit to the registration statement of which this prospectus forms a part.
Covenants
Under the applicable indenture, the issuing trust will make certain
covenants regarding payment of principal, interest (if any), premium (if any)
and other amounts (if any), maintenance of offices or agencies, holding in trust
money for note payments, protection of the collateral and delivery of an annual
statement as to compliance with conditions, performance of obligations and
adherence to covenants under the applicable indenture. Among other covenants,
the issuing trust will agree, so long as any notes of the applicable series are
outstanding, that such trust will comply with all of its covenants set forth
under "Description of Allstate Life Global Funding and the Trusts--Negative
Covenants of the Trusts".
Non-Petition
Under the applicable indenture in respect of a series of notes, the
indenture trustee, each other party to such indenture and each holder of notes
of such series will covenant and agree that, for a period of one year plus one
day after payment in full of all amounts payable under or in respect of the
applicable indenture and the notes of such series, it will not institute
against, or join any other person in instituting against, the applicable trust
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law. The immediately preceding sentence shall survive any termination of
the applicable indenture.
Notwithstanding the preceding paragraph, under the applicable indenture in
respect of a series of notes, the indenture trustee and each other party to such
indenture and each holder of notes of such series will covenant and agree that
it will not institute against, or join any other person in instituting against,
the applicable trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law, as a result of the failure to pay fees or expenses
pursuant the applicable indenture to any party entitled thereto.
Moreover, under the applicable indenture, each of the indenture trustee and
each other party to such indenture will covenant and agree that it will not
cause an Event of Default as a result of the applicable trust's failure to pay
any fees or expenses to any party entitled thereto under such indenture.
Events of Default
The following will be "Events of Default" with respect to the notes of a
particular series issued pursuant to the applicable indenture:
o default in the payment when due and payable of the principal of, or
any premium on, any note of such series;
o default in the payment when due and payable, of any interest on, or
any additional amounts with respect to, any note of such series and
continuance of such default for a period of five business days;
o any "Event of Default" (as defined in the funding agreement) by
Allstate Life under any funding agreement securing the notes of such
series or any Event of Default (as defined in the applicable funding
note indenture) under the applicable funding note;
o the issuing trust fails to observe or perform any covenant contained
in the notes of such series or in the applicable indenture for a
period of 30 days after the date on which written notice specifying
such failure,
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stating that such notice is a "Notice of Default" thereunder and
demanding that the issuing trust remedy the same, will have been given
by registered or certified mail, return receipt requested, to the
issuing trust by the indenture trustee, or to the issuing trust and
the indenture trustee by the holder or holders of at least 25% in
aggregate principal amount of the outstanding notes of such series
affected thereby;
o the applicable indenture for any reason shall cease to be in full
force and effect or shall be declared null and void, or the indenture
trustee shall fail to have or maintain a validly created and first
priority perfected security interest (or the equivalent thereof) in
the collateral required to secure the notes of such series; or any
person shall successfully claim, as finally determined by a court of
competent jurisdiction, that any lien on such collateral in favor of
the indenture trustee for the benefit of the holders of the notes of
such series and any other person for whose benefit the indenture
trustee is or will be holding the applicable collateral, is void or is
junior to any other lien or that the enforcement thereof is materially
limited because of any preference, fraudulent transfer, conveyance or
similar law;
o an involuntary case or other proceeding shall be commenced against the
issuing trust seeking liquidation, reorganization or other relief with
respect to the issuing trust or its debts under any bankruptcy,
insolvency, reorganization 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 issuing trust or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against the issuing
trust under the federal bankruptcy laws in effect at the date of the
applicable indenture or thereafter;
o the issuing trust commences a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency, reorganization
or other similar law or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the
issuing trust or any substantial part of its property, or consents to
any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced
against it, or makes a general assignment for the benefit of
creditors, or fails generally to pay its debts as they become due, or
takes any statutory trust action to authorize any of the foregoing; or
o any other Event of Default provided in any supplemental indenture or
in a note certificate representing the notes of such series.
If one or more Events of Default shall have occurred and be continuing with
respect to the notes of such series, then, and in every such event, unless the
principal of all of the notes of such series shall have already become due and
payable, either the indenture trustee or the holder or holders of not less than
25% in aggregate principal amount of the notes of such series then outstanding
under the applicable indenture by notice in writing to the issuing trust (and to
the indenture trustee if given by such holders), may declare the entire
principal of, and premium (if any), of all the notes of such series and any
interest accrued thereon and any other amounts due and owing with respect
thereto, to be due and payable immediately, and upon any such declaration the
same shall become immediately due and payable; provided that, if any Event of
Default specified in the sixth or seventh bullets above occurs with respect to
the issuing trust, or if any Event of Default specified in the third bullet
above that would cause any funding agreement securing the notes of such series
to become immediately due and payable occurs with respect to Allstate Life, then
without any notice to the issuing trust or any other act by the indenture
trustee or any holder of any notes of such series, the entire principal of, and
premium on (if any), all the notes of such series and the interest accrued
thereon and any other amounts due and owing with respect thereto, shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which will be waived by the issuing trust under the
applicable indenture.
Notwithstanding the previous paragraph, if at any time after the principal
of the notes of such series, any interest accrued thereon and any other amounts
due or owing with respect thereto shall have been so declared due and payable
and before any judgment or decree for the payment of the funds due shall have
been obtained or entered as hereinafter provided, the issuing trust shall pay or
shall deposit with the indenture trustee a sum sufficient to pay all due and
payable interest on all the notes of such series, any interest accrued thereon
and any other amounts due or owing with respect thereto and the principal of and
premium on (if any) any and all notes of such series which shall have become due
and payable otherwise than by acceleration (with interest on such principal and,
to the extent that payment of such interest is enforceable under applicable law,
on overdue interest and any other amounts payable, at the same rate as the rate
of interest specified in the note certificates representing the notes of such
series to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the indenture trustee and each
predecessor indenture trustee, their respective
22
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the indenture trustee and each predecessor indenture
trustee except as a result of negligence or bad faith, and if any and all Events
of Default under the applicable indenture, other than the non-payment of the
principal of and premium on (if any) the notes of such series which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then and in every such case the applicable holder
representative (as defined below), by written notice to the issuing trust and to
the indenture trustee, may waive all defaults 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 shall impair any right
consequent thereon.
Upon the occurrence and during the continuation of an Event of Default, the
claims of the indenture trustee for its fees and expenses will have priority
over the claims of holders of notes of such series with respect to any funds
collected by the indenture trustee during such Event of Default, subject to the
terms of the applicable indenture.
Except in the circumstances described in the third bullet point above, an
Event of Default under the notes of a series will not constitute an event of
default under any related funding agreement. In the absence of a contemporaneous
event of default under any applicable funding agreement, the issuing trust will
probably not have sufficient amounts to pay fully all amounts due to the holders
of the applicable series of notes upon the occurrence of an acceleration event
with respect to such series of notes. In such a case, the indenture trustee,
acting for the benefit of the holders of the applicable series of notes, will be
limited to a proceeding against each applicable funding agreement and the
related collateral. However, because under such circumstances Allstate Life
would not be under any obligation to accelerate its payment obligations under
any such funding agreement, the indenture trustee could only:
o continue to receive scheduled periodic payments under the collateral,
including any applicable funding agreement;
o dispose of the collateral, including any applicable funding agreement,
subject to obtaining the consent of Allstate Life; or
o exercise any combination of the foregoing.
Any such disposition of collateral could be made on unfavorable terms and
result in material losses to the holders of the applicable series of notes.
In addition, in the event of any acceleration under a series of notes, the
amounts of cash received under any applicable funding agreement(s), the
applicable support agreement and any other sources available to the issuing
trust may be insufficient to enable it to satisfy all of its support obligations
and other cash obligations. The failure to have sufficient cash to meet these
obligations could result in insolvency or other circumstances that could result
in material losses to the holders of the applicable series of notes.
Application of Proceeds
Any funds collected by the indenture trustee following an Event of Default,
and during the continuance thereof, under the applicable indenture in respect of
the notes of a series shall be held in trust in the applicable collection
account and be applied in the following order at the date or dates fixed by the
indenture trustee and, in case of the distribution of such funds on account of
principal, any premium and interest and any other amounts due and owing, upon
presentation of the global security or certificates representing the notes of
such series and the notation thereon of the payment if only partially paid or
upon the surrender thereof if fully paid:
First: to the payment of costs and expenses, including reasonable
compensation to the indenture trustee and each predecessor indenture
trustee and their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the indenture trustee and
each predecessor indenture trustee except as those adjudicated in a court
of competent jurisdiction to be the result of any such indenture trustee's
negligence or bad faith, in an aggregate amount of no more than $250,000
for all series of notes issued under the programs to the extent not paid
pursuant to the applicable support agreement;
Second: to the payment of principal, any premium and interest, any
additional amounts and any other amounts then due and owing on the notes of
such series, ratably, without preference or priority of any kind, according
to the aggregate amounts due and payable on such notes;
23
Third: to the payment of any other obligations then due and owing with
respect to such series of notes, ratably, without preference or priority of
any kind; and
Fourth: to the payment of any remaining balance to the issuing trust for
distribution by the Delaware trustee in accordance with the provisions of
the applicable trust agreement.
All money deposited with the indenture trustee pursuant to an indenture in
respect of notes of a series, except when an Event of Default has occurred and
is continuing, shall be held in trust in the applicable collection account and
applied by it, in accordance with the provisions of the notes of such series and
the applicable indenture, to the payment through any paying agent, to the
persons entitled thereto, of the principal, premium, if any, interest and
additional amounts, if any, for whose payment such money has been deposited with
or received by the indenture trustee. If no Event of Default with respect to the
notes of a series has occurred and is continuing, the following priority of
payments shall apply:
First: to the payment of principal, any premium and interest, any
additional amounts, and any other amounts then due and owing on the notes
of such series, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such notes;
Second: to the payment of any other obligations then due and owing with
respect to such series of notes, ratably, without preference or priority of
any kind; and
Third: to the payment of any remaining balance to the issuing trust for
distribution by the Delaware trustee in accordance with the provisions of
the applicable trust agreement.
The indenture trustee may make distributions under an indenture in cash or
in kind or, on a ratable basis, in any combination thereof.
Except as provided in the immediately following paragraph, all funds
received by the indenture trustee shall, until used or applied as provided in
the applicable indenture, be held in trust for the purposes for which they were
received. The indenture trustee (and each of its agents and affiliates) shall
deposit all cash amounts received by it (or any such agents or affiliates) that
are derived from the collateral for the benefit of the holders of the applicable
series of notes in a collection account. Neither the indenture trustee nor any
agent of the applicable trust or the indenture trustee shall be under any
liability for interest on any funds received by it under the applicable
indenture.
Any funds deposited with or paid to the indenture trustee or any paying
agent for the payment of the principal of, any interest or premium on, or any
additional amounts or any other amounts with respect to, any note of a series
and not applied but remaining unclaimed for three years after the date upon
which such principal, interest, premium, additional amounts or any other amount
shall have become due and payable, shall, upon the written request of the
applicable trust and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to the
applicable trust by the indenture trustee or such paying agent, and the holder
of any such note shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the applicable trust for any payment which such holder may be entitled to
collect, and all liability of the indenture trustee or any paying agent with
respect to such funds shall thereupon cease.
Trust Certificates of Compliance
Under each indenture, the trust will furnish to the indenture trustee on or
before May 15 of each year commencing with the first May 15 following the
issuance of a funding note or any notes, a brief certificate as to its knowledge
of the trust's compliance with all conditions and covenants under the applicable
indenture (which will be determined without regard to any period of grace or
requirement of notice provided under the indenture).
Reports on Assessment of Compliance With Servicing Criteria and Compliance
Statements; Attestation Reports of Independent Registered Public Accounting Firm
In connection with the filing of any annual report on Form 10-K of a trust
filed under the Exchange Act, each of the indenture trustee and each paying
agent (unless the indenture trustee is the only paying agent) shall (a) provide
to Allstate Life, the applicable trust and Global Funding (i) a report required
pursuant to Item 1122(a) of Regulation AB on an assessment of compliance with
the servicing criteria set forth in Item 1122(d) of Regulation AB (each a
"Compliance Report") and (ii) a statement of compliance required pursuant to
Item 1123 of Regulation AB, each of which shall be
24
filed as an exhibit to the applicable annual report; and (b) cause, at the
expense of Allstate Life, a registered public accounting firm to provide to
Allstate Life, the applicable trust and Global Funding an attestation report on
the applicable Compliance Report as required pursuant to Item 1122(b) of
Regulation AB, which shall be filed as an exhibit to the applicable Annual
Report.
Reports by Indenture Trustee
Within ten days following any distribution made or scheduled to be made on
the notes of a series, including any date specified in the applicable note
certificate(s) or in any supplement to the applicable indenture or the date at
which the notes of such series become due and payable, and only to the extent
the applicable trust is required to file reports under the Exchange Act, the
indenture trustee will deliver to Allstate Life and the holders of the notes of
such series a report regarding such distribution.
Within 60 days after May 15 of each year commencing with the first May 15
following the issuance of the notes of a series, if required by Section 313(a)
of the Trust Indenture Act, the indenture trustee shall transmit, pursuant to
Section 313(c) of the Trust Indenture Act, a brief report dated as of May 15
with respect to any of the events specified in Section 313(a) of the Trust
Indenture Act which may have occurred since the later of the immediately
preceding May 15 and the date of the applicable indenture. The indenture trustee
shall transmit the reports required by Section 313(a) of the Trust Indenture Act
at the time specified therein. The indenture trustee shall comply with Section
313(b) of the Trust Indenture Act. Such reports shall be transmitted in the
manner and to the persons required by Sections 313(c) and 313(d) of the Trust
Indenture Act. A copy of each such report shall, at the time of such
transmission to holders of the notes of such series, be filed by the indenture
trustee with each stock exchange upon which the notes of such series are listed,
with the SEC and the applicable trust. The applicable trust will notify the
indenture trustee whether the notes of such series are listed on any stock
exchange.
Reports by Trust
Pursuant to Section 314(a) of the Trust Indenture Act, each trust shall:
o file, or cause to be filed, with the indenture trustee, within 15 days
after the applicable trust or Global Funding is required to file the
same with the SEC and to the extent available to such trust, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may
from time to time by rules and regulations prescribe) which the
applicable trust or Global Funding may be required to file with the
SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if such trust is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file, or
cause to be filed, with the indenture trustee and the SEC, in
accordance with rules and regulations prescribed from time to time by
the SEC, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed form time to time in
such rules and regulations; provided that if, pursuant to any publicly
available interpretations of the SEC, the applicable trust or Global
Funding would not be required to make such filings under Section
314(a) of the Trust Indenture Act, then such trust or Global Funding
shall not be required to make such filings;
o file, or cause to be filed on its behalf, with the indenture trustee
and the SEC, in accordance with rules and regulations prescribed from
time to time by the SEC, such additional information, documents and
reports with respect to compliance by the applicable trust, with the
conditions and covenants of the applicable indenture as may be
required from time to time by such rules and regulations; and
o transmit within 30 days after the filing thereof with the indenture
trustee, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by or on behalf of the applicable
trust pursuant to the two immediately preceding paragraphs as may be
required by rules and regulations prescribed from time to time by the
SEC.
Fees and Expenses Payable Out of Cash Flows From Funding Agreements
It is expected that funding agreement(s) securing the obligations of any
issuing trust under a series of notes will constitute the sole source of
payments in respect of the notes of such series. Pursuant to each indenture, any
funds collected
25
by the indenture trustee under the applicable series of notes will be applied as
described under "--Application of Proceeds" and used in part to pay certain
costs and expenses as described in the table below:
- ---------------- ----------------- ------------------------------------ ---------------- ----------------- --------------------
Payment of Fees Party Receiving General Purpose Source of Funds Distribution Amount Payable
Fees and Priority
Expenses
- ---------------- ----------------- ------------------------------------ ---------------- ----------------- --------------------
Following Indenture Costs and expenses, including Funds First priority Actual expenses
Event of Trustee reasonable compensation of the collected by (prior to the (in an aggregate
Default indenture trustee, and each the indenture payment of any amount of no more
predecessor indenture trustee and trustee in other amounts, than $250,000 for
their respective agents and respect of the including any all series of
attorneys, and all expenses and applicable amounts due and notes issued under
liabilities incurred, and advances series of notes owing on the the programs)
made, by the indenture trustee and notes of the
each predecessor indenture applicable
trustee, excluding those resulting series)
from negligence or bad faith
- ---------------- ----------------- ------------------------------------ ---------------- ----------------- --------------------
Prior to and Indenture All costs and expenses (including Funds Third priority Actual expenses
Following Trustee attorneys' fees) incurred by the collected by (after the
Event of indenture trustee in realizing on the indenture payment of all
Default the applicable collateral trustee in amounts due and
respect of the owing under the
applicable notes of the
series of notes applicable
series)
- ---------------------------------------------------------------------------------------------------------------------------------
Certain Rights of Holders
The holder or holders of a majority in aggregate principal amount of the
notes of any series at the time outstanding shall have the right to elect a
holder representative ("holder representative") who shall have binding authority
upon all the holders and who shall direct the time, method, and place of
conducting any proceeding for any remedy available to the indenture trustee, or
exercising any trust or power conferred on the indenture trustee by the
applicable indenture, provided that:
o such direction shall not be otherwise than in accordance with law and
the provisions of the applicable indenture; and
o subject to certain limitations, the indenture trustee shall have the
right to decline to follow any such direction if the indenture
trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the indenture
trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or responsible officers
of the indenture trustee shall determine that the action or
proceedings so directed would involve the indenture trustee in
personal liability.
Nothing in an indenture shall impair the right of the indenture trustee in
its discretion to take any action deemed proper by the indenture trustee and
which is not inconsistent with such direction by the holder or holders of notes
of the applicable series.
No holder of any note of any series shall have any right by virtue or by
availing of any provision of the applicable indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to the applicable indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy under the applicable indenture, unless:
26
o such holder has previously given written notice to the indenture
trustee of a continuing Event of Default with respect to such series
of notes;
o the holder or holders of notes representing not less than 25% of the
aggregate principal amount of the outstanding notes of such series
shall have made written request to the indenture trustee to institute
proceedings in respect of such Event of Default in its own name as the
indenture trustee;
o such holder or holders have offered to the indenture trustee indemnity
or security satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request;
o the indenture trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
o no direction inconsistent with such written request has been given to
the indenture trustee during such 60-day period by the holder or
holders of notes representing at least 66 2/3% of the aggregate
principal amount of the outstanding notes of such series;
it being understood and intended, and being expressly covenanted by each holder
of a note of the relevant series with each other holder of a note of the
relevant series and the indenture trustee, that no holder or holders of notes of
a series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of the applicable indenture to affect, disturb or
prejudice the rights of any other holder of any note of the relevant series or
to obtain or to seek to obtain priority or preference over any other holder of
the relevant series to enforce any right under such indenture, except in the
manner therein provided and for the equal, ratable and common benefit of all the
holders of the notes of the relevant series. For the protection and enforcement
of the provisions described in this paragraph, each holder and the indenture
trustee shall be entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provisions in the applicable indenture, however,
the right of any holder of any note of the relevant series, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any),
and interest on, if any, and additional amounts with respect to, if any, such
note of the relevant series, on or after the respective due dates expressed in
such note of the relevant series, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such holder.
Since Allstate Life and Global Funding are registrants, purchasers of notes
may be able to proceed directly against Allstate Life and Global Funding to
enforce their rights under the Federal securities laws and their rights under
the Federal securities laws will be no different than if they purchased the
underlying funding agreements directly from Allstate Life or the underlying
funding notes directly from Global Funding.
Modifications and Amendments
Modifications and Amendments Without Consent of Holders
The issuing trust and the indenture trustee may from time to time and at
any time enter into an indenture or indentures supplemental to the applicable
indenture for one or more of the following purposes without the consent of any
holders of the applicable series of notes:
o for the issuing trust to convey, transfer, assign, mortgage or pledge
to the indenture trustee as security for the notes of the relevant
series any property or assets;
o to add to the issuing trust's covenants such further covenants,
restrictions, conditions or provisions as the issuing trust and the
indenture trustee shall consider to be for the protection of each
holder of notes of the applicable series, and to make the occurrence,
or the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in the relevant indenture, as described herein; provided
that, in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a
particular 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 an Event of Default or
may limit the remedies available to the indenture trustee upon such an
Event of Default or may limit the right of the applicable holder
representative to waive such an Event of Default;
27
o to cure any ambiguity or to correct or supplement any provision
contained in the relevant indenture or in any applicable supplemental
indenture or note certificate which may be defective or inconsistent
with any other provision contained in such indenture or in any
applicable supplemental indenture or note certificate; or to make such
other provisions in regard to matters or questions arising under the
relevant indenture or under any applicable supplemental indenture or
note certificate which shall not adversely affect the interests of the
holders in any material respect; or
o to evidence and provide for the acceptance of appointment under the
relevant indenture by a successor indenture trustee with respect to
the notes of the applicable series and to add to or change any of the
provisions of such indenture as shall be necessary to provide for or
facilitate the issuing trust's administration under the applicable
indenture by more than one indenture trustee.
The issuing trust shall advise all rating agencies that are then rating the
medium term note program, the Allstate Life(R) CoreNotes(R) program or the
relevant series of notes of any such supplemental indentures.
Modifications and Amendments With Consent of Holders
With the consent of the holder or holders of not less than 66 (2)/3% in
aggregate principal amount of the outstanding notes of the applicable series,
the issuing trust and the indenture trustee may, from time to time and at any
time, enter into a supplemental indenture for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the relevant indenture or of any applicable supplemental indenture or note
certificate or of modifying in any manner the rights of the holders of notes of
such series; provided, that no such supplemental indenture shall, without the
consent of the holder of each note of such series so affected:
o change the final maturity of such series of notes, or reduce the
principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or impair or affect the right of any
holder of notes of such series to institute suit for the payment
thereof or modify any redemption or repayment provisions applicable to
the notes of such series;
o permit the creation of any lien on the collateral or any part thereof
(other than the applicable security interest) or terminate the
applicable security interest as to any part of the collateral, except
as permitted by the applicable indenture; or
o modify the foregoing provisions of the relevant indenture except to
increase the percentage of notes of such series required to approve
any such supplemental indenture.
The issuing trust shall advise all rating agencies that are then rating the
medium term note program, the Allstate Life(R) CoreNotes(R) program or the
relevant series of notes of any such supplemental indentures.
Indenture Trustee
Under each indenture, if an Event of Default with respect to the applicable
series of notes has occurred and is continuing, the indenture trustee is
obligated to exercise such of the rights and powers vested in it by such
indenture, and to 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 or her own affairs.
Each indenture will provide that, except during the continuance of an Event
of Default, the indenture trustee will undertake to perform such duties and only
such duties with respect to the notes of the applicable series as are
specifically set forth in the applicable indenture. No implied covenants or
obligations shall be read into the applicable indenture against the indenture
trustee.
No provision of an indenture will be construed to relieve the indenture
trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
o this paragraph does not limit the effect of the preceding paragraph;
o in the absence of bad faith on its part, the indenture trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the
28
indenture trustee and conforming to the requirements of the applicable
indenture unless a responsible officer (as defined in the applicable
indenture) of the indenture trustee has actual knowledge that such
statements or opinions are false; provided that the indenture trustee
must examine such certificates and opinions to determine whether they
conform to the requirements of the applicable indenture;
o the indenture trustee will not be liable for any error of judgment
made in good faith by a responsible officer of the indenture trustee,
unless it is proved that the indenture trustee was negligent in
ascertaining the pertinent facts;
o the indenture trustee will not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with a
direction of the applicable holder representative relating to the
time, method and place of conducting any proceeding for any remedy
available to the indenture trustee, or exercising any trust or power
conferred upon the indenture trustee, under the applicable indenture
with respect to the notes of the applicable series; and
o no provision of the applicable indenture will require the indenture
trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
thereunder, or in the exercise of any of its rights or powers
thereunder, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
The indenture trustee may resign at any time under any indenture by giving
not less than 90 days' prior written notice thereof to the issuing trust and the
holders of the applicable series of notes. Upon receiving such notice of
resignation, the applicable trust shall promptly cause a successor trustee with
respect to the applicable series to be appointed by written instrument in
duplicate, executed by the applicable trust, one copy of which instrument shall
be delivered to the resigning indenture trustee and one copy to the successor
indenture trustee. If no successor indenture trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning indenture trustee will be permitted to
petition any court of competent jurisdiction for the appointment of a successor
indenture trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor indenture trustee.
If at any time:
o the indenture trustee shall cease to be eligible to serve as indenture
trustee under the requirements of the applicable indenture and shall
fail to resign after written request in accordance with the applicable
indenture;
o the indenture trustee shall become incapable of acting with respect to
the applicable series of notes or shall be adjudged as bankrupt or
insolvent, or a receiver or liquidator of the indenture trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the indenture trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation; or
o the indenture trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act with
respect to the applicable series of notes after written request
therefor by the issuing trust or any holder of such notes who has been
a bona fide holder of such notes for at least six months;
then, the issuing trust (except upon the occurrence and during the continuation
of an Event of Default) will be permitted to remove the indenture trustee with
respect to the applicable series of notes and appoint a successor indenture
trustee under and in accordance with the applicable indenture.
In addition to the right of petition given to the resigning indenture
trustee under an indenture and the right of removal given to the issuing trust
thereunder as described in the preceding two paragraphs, any holder who has been
a holder of notes of such series for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor indenture trustee under the
applicable indenture or the removal of the indenture trustee and the appointment
of a successor indenture trustee under the applicable indenture, as the case may
be.
The applicable holder representative may at any time remove the indenture
trustee with respect to the notes of such series and appoint a successor
indenture trustee with respect to the notes of such series by delivering to the
indenture trustee so removed, to the successor indenture trustee so appointed
and to the issuing trust the evidence required for such action by the relevant
indenture.
29
With respect to any series of notes as to which one or more affiliates of
The Bank of New York Trust Company, N.A. will serve as an Agent, the relevant
trust will appoint an eligible entity other than The Bank of New York Trust
Company, N.A. and unaffiliated with any other Agent participating in the
offering of such series of Notes to serve as indenture trustee.
Unless otherwise specified in the applicable pricing supplement, pursuant
to each indenture, The Bank of New York Trust Company, N.A. will perform the
functions of the servicer in respect of the programs. The Bank of New York Trust
Company, N.A. is a national banking association organized under the laws of the
United States.
The Bank of New York Trust Company has acted as indenture trustee and in
other capacities in connection with various types of securitization
transactions, including mortgage-backed securities, collateralized debt
obligations, asset-backed securities and funding agreement-backed notes programs
since 2004. The Bank of New York Trust Company and its affiliates have served as
indenture trustee on both registered and unregistered transactions involving the
securitization of funding agreements since 2004. The aggregate amount of
outstanding registered funding agreements managed by The Bank of New York Trust
Company in connection with funding agreement backed note programs is
approximately $6 billion as of March 31, 2007.
Meetings of Holders
A meeting of holders of notes of a series will be permitted to be called at
any time and from time to time pursuant to the relevant indenture to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by such indenture to be made, given or taken by such
holders of notes of such series.
Unless otherwise provided in a note certificate representing the notes of a
particular series, the indenture trustee may at any time call a meeting of
holders of notes of such series for any purpose specified in the preceding
paragraph, to be held at such time and at such place in the City of New York or
the city in which the Corporate Trust Office (as defined in the applicable
indenture) is located. Notice of every meeting of holders of notes of such
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, must be given not less
than 21 nor more than 180 days prior to the date fixed for the meeting.
Any resolution passed or decision taken at any meeting of holders of notes
of a series duly held in accordance with the relevant indenture will be binding
on all of the holders of notes of such series, whether or not such holders were
present or represented at the meeting.
Nonrecourse Enforcement
Notwithstanding anything to the contrary contained in an indenture or any
relevant note certificate or supplemental indenture, other than as described
below, none of Allstate Life, its officers, directors, affiliates, employees or
agents or any of the trustees of Global Funding or the trusts, beneficial owners
or agents, or any of their respective officers, directors, affiliates, employees
or agents, all of whom are collectively referred to in this prospectus as the
"nonrecourse parties," will be personally liable for the payment of any
principal, interest or any other sums at any time owing under the terms of any
notes. If any Event of Default shall occur with respect to any notes of any
series, the right of the holder or holders of notes of such series and the
indenture trustee for the benefit of such holder or holders in connection with a
claim related to such series of notes will be limited solely to a proceeding
against the relevant collateral.
Neither any such holder or holders nor the indenture trustee for the
benefit of such holder or holders will have the right to proceed against the
nonrecourse parties to enforce the notes of the relevant series (except that to
the extent they exercise their rights, if any, to seize the relevant funding
agreement(s), they may enforce the relevant funding agreement(s) against
Allstate Life) or for any deficiency judgment remaining after foreclosure of any
property included in the relevant collateral.
30
The limitations on the rights of the holders described in the previous two
paragraphs will not in any manner or way constitute or be deemed a release of
the debt or other obligations of the issuing trust evidenced by the notes of the
applicable series or otherwise affect or impair the enforceability against the
assets of the issuing trust of the liens, assignments, rights and security
interests created by the relevant indenture, the relevant collateral or any
other instrument or agreement evidencing, securing or relating to the
indebtedness or the obligations of the issuing trust evidenced by the notes of
the applicable series. The holders of notes of a series are not precluded from
foreclosing upon any property included in the relevant collateral or from any
other rights or remedies in law or in equity against the assets of the issuing
trust.
Since Allstate Life and Global Funding are registrants, purchasers of notes
may be able to proceed directly against Allstate Life and Global Funding to
enforce their rights under the Federal securities laws depending on the
particular facts and circumstances and their rights under the Federal securities
laws will be no different than if they purchased the underlying funding
agreements from Allstate Life or Global Funding.
Notices
All notices regarding notes of a series will be mailed to the registered
owners thereof as their names appear in the applicable note register maintained
by the indenture trustee.
Governing Law; Submission to Jurisdiction
Pursuant to Section 5-1401 of the General Obligations Law of the State of
New York, each indenture and the notes of each series shall (unless specified
otherwise in the applicable pricing supplement) be governed by, and construed in
accordance with, the laws of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity or
perfection of the ownership of and security interest in the relevant funding
agreements of the issuing trust or remedies under the applicable indenture in
respect thereof may be governed by the laws of a jurisdiction other than the
State of New York. All judicial proceedings brought against a trust or the
indenture trustee arising out of or relating to the relevant indenture, any note
of the applicable series or any portion of the relevant collateral may be
brought in any state or Federal court in the State of New York, provided that
the applicable pricing supplement may specify other jurisdictions as to which
the issuing trust may consent to the nonexclusive jurisdiction of courts with
respect to such series of notes.
31
DESCRIPTION OF THE FUNDING NOTES
Each trust will use the net proceeds received from the issuance of the
related series of notes to purchase a funding note. Global Funding will use the
net proceeds received from the sale of the related funding note to purchase one
or more funding agreements issued by Allstate Life. Pursuant to each funding
note indenture, Global Funding will immediately pledge and collaterally assign
each such funding agreement to and grant a security interest in each such
funding agreement and the related collateral in favor of the funding note
indenture trustee. Global Funding will immediately thereafter assign absolutely
to, and deposit into, the applicable trust each such funding agreement and, in
connection with such assignment and deposit, the relevant funding note will be
surrendered for cancellation by or on behalf of the applicable trust, and will
be cancelled by the funding note indenture trustee, and the pledge and
collateral assignment of each funding agreement to, and the security interest in
favor of, the funding note indenture trustee will be terminated. Such
cancellation will act as a redemption and satisfaction of the funding note.
The funding note will have a principal amount equal to the principal amount
of the related funding agreement(s) and the related series of notes. Each
funding note will otherwise have payment and other terms substantially similar
to the related funding agreement(s) and the related series of notes, except that
the terms of each funding note will provide that it will be cancelled
immediately upon the sale of, and deposit into, the issuing trust by Global
Funding of the related funding agreement(s).
32
DESCRIPTION OF THE FUNDING AGREEMENTS
This section provides a summary of the material terms and conditions of the
funding agreements issued under the programs. Specific terms of the funding
agreement(s) issued with respect to a series of notes and the extent to which
these general provisions apply to such funding agreement(s) will be provided in
the applicable prospectus supplement and pricing supplement to this prospectus.
This summary is not complete and you should read the detailed provisions of the
funding agreements. A copy of the form of funding agreement is filed with the
SEC and is incorporated into this prospectus by reference.
General
In connection with the issuance of a series of notes, Global Funding will
use the proceeds received from the issuance and sale of the applicable funding
note to purchase one or more funding agreements issued by Allstate Life. Global
Funding will immediately pledge and collaterally assign each such funding
agreement to the funding note indenture trustee as collateral to secure the
obligations under the applicable series of notes and immediately thereafter
assign absolutely to, and deposit into, the issuing trust each such funding
agreement.
Each such funding agreement will be held separately as collateral by the
indenture trustee for the benefit of the holders of the applicable series of
notes. Each funding agreement will represent Allstate Life's unsecured
obligation. Under the funding agreement(s) securing the obligations of a trust
under its series of notes, the applicable trust shall pay Allstate Life one or
more deposit(s) in an aggregate amount equal to the issue price of the
applicable series of notes plus accrued interest, if any, less any commission or
compensation payments due to any person. Such deposit(s) shall be made in the
currency in which such notes are denominated. Upon receipt of such deposit(s),
Allstate Life shall be obligated to establish one or more general account
records, each of which is referred to as a "funding account", which will
evidence its obligation under the funding agreement(s). Unless otherwise
specified in the applicable pricing supplement, the deposit(s) of such
obligation(s) will be deemed to be equal to the aggregate face amount of the
notes of the applicable series of notes and interest, if any, will accrue on
such balance at such rate and upon such terms as is accruing on the applicable
series of notes. See "Description of the Notes" in the applicable prospectus
supplement. Unless otherwise specified in the applicable pricing supplement, for
each funding agreement securing a series of notes other than discount notes, the
deposits received pursuant to the funding agreement (as specified in the pricing
annex to such funding agreement), less any withdrawals to make payments under
such funding agreement (other than additional amounts, if applicable), plus any
interest accrued pursuant to such funding agreement, all as set forth in the
pricing annex to such funding agreement, is referred to as the "funding account
balance". Unless otherwise specified in the applicable pricing supplement, for
each funding agreement securing a series of notes that are discount notes, the
deposit received pursuant to the funding agreement (as specified in the pricing
annex to such funding agreement), less any withdrawals to make payments under
such funding agreement (other than additional amounts, if applicable), plus any
accrual of discount (determined in accordance with the applicable series of
notes), plus, if applicable, any interest accrued pursuant to such funding
agreement, all as set forth in the pricing annex to such funding agreement, is
referred to as "funding account balance". The obligations of Allstate Life under
each funding agreement will constitute its general account obligations and shall
not be obligations of any of its separate accounts.
Under each funding agreement issued under the program, Allstate Life will
be obligated to make or cause to be made certain payments as are necessary to
permit the issuing trust to meet in full its scheduled payment obligations under
the relevant series of notes. Therefore, the currency of denomination, maturity,
redemption, repayment and interest rate provisions of the funding agreement(s)
issued by Allstate Life to the issuing trust shall be structured so that the
payments made by or at the direction of Allstate Life will enable the issuing
trust to meet its requisite obligations under the relevant series of notes. The
repayment of principal on such funding agreement(s) will occur at the stated
date of maturity of the funding agreement(s), or, under certain circumstances
specified by the terms of the funding agreement(s), at a date or dates prior to
maturity. Amounts received by the issuing trust in respect of interest or
principal on the funding agreement(s) held by it will be applied to all payments
due the holders of notes of the related series of notes. Additional terms of
each applicable funding agreement will be described in the applicable prospectus
supplement and pricing supplement.
A funding agreement is a type of insurance company product in which the
purchaser, usually an institutional investor, pays the insurance company a
deposit and, in turn, receives scheduled payments of principal and interest. The
deposit Allstate Life receives on the issuance of a funding agreement under the
programs will be part of its general account and not allocated to any of its
separate accounts. Allstate Life's general account is the account which contains
all of its assets and liabilities other than those held in its separate
accounts. Separate accounts are segregated accounts which are established for
certain products that Allstate Life sells. A separate account holds assets and
liabilities specifically related to one or more products and segregates these
assets and liabilities from the assets and liabilities of all other separate
accounts and the assets and liabilities of Allstate Life's general account.
Since the deposit made under any funding agreement issued by Allstate Life
33
under the programs will be part of its general account, Allstate Life's
obligations under each such funding agreement will be the obligations of its
general account, rather than the obligations of any separate account. As such,
Allstate Life will invest the proceeds from the sale of funding agreements under
the programs in a portfolio of assets which along with its other general account
assets will be used to meet its contractual obligations under the funding
agreements and its other general account obligations. Allstate Life will earn
the spread differential, if any, between the cost of its obligations under such
funding agreements and the yield on its invested assets.
Allstate Life has established internal procedures to ensure that it
performs all of its payment obligations under the funding agreements. A specific
group of Allstate Life employees will monitor performance of Allstate Life's
payment obligations under the funding agreements and will promptly notify the
indenture trustee in the event it has not timely made payments under any funding
agreement. Under the applicable indenture, the calculation agent will notify
Allstate Life of the amount of interest due on any notes of the applicable
series prior to any interest payment date. Additionally, in the event that
Allstate Life fails timely to make any payment under the applicable funding
agreement(s), the indenture trustee will notify Allstate Life of such failure
and will have the right to enforce the rights of holders of the applicable
series of notes contained in the applicable indenture.
Priority of Funding Agreements
The funding agreements are unsecured obligations of Allstate Life, an
Illinois stock life insurance company. In the event of insolvency of an Illinois
insurance company, claims against the insurer's estate are prioritized pursuant
to Section 5/205 of the Illinois Insurance Code. Under Section 5/205(1)(d) of
the Illinois Insurance Code, claims by "policyholders, beneficiaries, and
insureds, under insurance policies, annuity contracts, and funding agreements"
receive payment prior to any distribution to general creditors not falling
within any other priority class under the Illinois Insurance Code.
In a properly prepared and presented case in a delinquency proceeding under
Article XIII of the Illinois Insurance Code, 215 ILCS Section 5/187 et seq. (the
"Illinois Liquidation Act"), the timely and properly filed claims of an owner
under the funding agreement (with the possible exception of claims for
Additional Amounts, as discussed below) would be entitled to distribution pari
passu with claims made by other policyholders, beneficiaries, and insureds under
other insurance policies, insurance contracts, annuities and funding agreements
issued by Allstate Life, and the claims of the Illinois Life and Health
Insurance Guaranty Association, and any similar organization in another state,
in accordance with Section 5/205(1)(d) of the Illinois Liquidation Act, and an
owner's claims under the funding agreement should not be recharacterized as
other than the claims of a policyholder, beneficiary, or insured under an
insurance policy, insurance contract, annuity or funding agreement.
If a funding agreement so provides, Allstate Life may be required to pay
Additional Amounts (as such term is defined therein) to the indenture trustee as
collateral assignee of the funding agreement. For a discussion regarding payment
of Additional Amounts, see "Description of the Notes--Withholding Tax and
Payment of Additional Amounts." The language of Section 205(1)(d) that
specifically refers to claims under "funding agreements" has not been
interpreted in any Illinois judicial decision. Specifically, there is no
authority addressing whether claims under funding agreements for Additional
Amounts would be accorded priority under Section 205(1)(d) as claims made by
other policyholders, beneficiaries and insureds under other policies, insurance
contracts, annuities and funding agreements. Accordingly, although such payments
could be viewed as a claim under the funding agreements within the meaning of
Section 5/205(1)(d), they may also be argued to be a separate payment
obligation. Therefore, while in a proceeding before a court of competent
jurisdiction the court might find that a claim for an Additional Amount
constitutes a claim under a funding agreement, it also might find that such a
claim is not a claim entitled to the priority afforded by Section 5/205(1)(d).
If a claim for an Additional Amount does not constitute a claim entitled to the
priority afforded by Section 5/205(1)(d), then in a properly prepared and
presented case any claim for an Additional Amount would be entitled to the same
priority as claims of general creditors of Allstate Life under Section
5/205(1)(g).
As insurance contracts under Illinois law, funding agreements rank senior
to unsecured indebtedness of Allstate Life. Therefore, if Allstate Life were to
offer notes directly to investors, holders of such notes would receive an
effectively subordinated obligation because of the relative priority of
insurance contracts and funding agreements over unsecured indebtedness.
With respect to any issuance of the notes of a series, the aggregate amount
of Allstate Life's liabilities that would rank pari passu with each funding
agreement securing such series of notes is disclosed in the financial statements
of Allstate Life contained in Allstate Life's most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q filed with the SEC, in each case as of the
date of such financial statements. This amount appears in the Consolidated
Statements of Financial Position as a liability under the line item entitled
"Contractholder funds."
34
The statutory authorizations for the uses of funding agreements under the
Illinois Insurance Code (the "Illinois Insurance Code") are severely limited.
The form of funding agreement has been filed with the Illinois Department of
Insurance and has been accepted as a funding agreement that is a type of annuity
contract without life contingency permitted by Section 5/226.1 of the Illinois
Insurance Code. Under that provision, the permitted uses are limited to funding
of: (a) ERISA employee benefit plans, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"); (b) an activity of
an Internal Revenue Code Section 501(c) organization; (c) a program of a
government entity or instrumentality; (d) structured settlement claims; and (e)
a program of an institution with assets in excess of $25,000,000. Thus, the
market for direct sales of funding agreements is very narrow, essentially
limited to large institutional investors under Rule 144A or foreign investors
under Regulation S promulgated under the Securities Act, as amended. Moreover,
in contrast to medium term notes, funding agreements have no secondary market to
provide investors with liquidity or mark-to-market valuation and, therefore, the
funding agreement market is much narrower than the universe of investors who can
purchase medium term notes.
In addition, funding agreements are insurance contracts authorized by
Section 5/226.1 of the Illinois Insurance Code. Only licensed insurance agents
or the issuing insurance company may sell such contracts. Thus, not only is the
market for direct funding agreement sales limited by the specified classes of
buyers, but it is restricted also by the limits on the agency force.
The Illinois Department of Insurance has confirmed that it does not
consider the sale of publicly offered funding agreement backed medium term notes
to violate the Illinois Insurance Code. In addition, the Illinois Department of
Insurance has approved the form of funding agreement to be used in connection
with the medium term note program and the Allstate Life(R) CoreNotes(R) program.
Ratings
The rating by any rating agency of the financial strength of Allstate Life
does not mean that such rating agency will rate a funding agreement or the
related series of notes. However, unless otherwise indicated in the applicable
pricing supplement, each series of notes, the related funding note and the
funding agreement(s) securing such series of notes will have an issue credit
rating of "AA" from Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("Standard & Poor's"). We expect the program to be
rated "Aa2" by Moody's Investors Service, Inc. ("Moody's") and "AA" by Standard
& Poor's. If Moody's or Standard & Poor's changes the program rating, the new
program rating will be specified in the applicable pricing supplement. Notes of
a series will be issued under the program only in the event that, at the time of
issuance of such series of notes, at least one nationally recognized rating
agency would assign an investment grade rating to such series of notes, the
related funding note and the funding agreement(s) securing such series of notes.
Insolvency of Allstate Life
In the event of insolvency of an Illinois insurance company, claims against
the insurer's estate are prioritized pursuant to Section 5/205 of the Illinois
Insurance Code. Under Section 5/205(1)(d) of the Illinois Insurance Code, claims
by "policyholders, beneficiaries, and insureds, under insurance policies,
annuity contracts, and funding agreements" receive payment prior to any
distribution to general creditors not falling within any other priority class
under the Illinois Insurance Code. The funding agreements are unsecured
obligations of Allstate Life.
Lord, Bissell & Brook LLP, special Illinois insurance regulatory counsel of
Allstate Life, has opined that, subject to the limitations, qualifications and
assumptions set forth in its opinion letter, in a properly prepared and
presented case, (1) in a delinquency proceeding under Article XIII of the
Illinois Insurance Code, 215 ILCS Section 5/187 et seq. (the "Illinois
Liquidation Act"), the timely and properly filed claims of an owner under the
funding agreement (with the possible exception of claims for Additional Amounts,
as discussed below) would be entitled to distribution pari passu with claims
made by other policyholders, beneficiaries, and insureds under other insurance
policies, insurance contracts, annuities and funding agreements issued by
Allstate Life, and the claims of the Illinois Life and Health Insurance Guaranty
Association, and any similar organization in another state, in accordance with
Section 5 /205(1)(d) of the Illinois Liquidation Act, and (2) an owner's claims
under the funding agreement should not be recharacterized as other than the
claims of a policyholder, beneficiary, or insured under an insurance policy,
insurance contract, annuity or funding agreement.
If a funding agreement so provides, Allstate Life may be required to pay
Additional Amounts (as such term is defined therein) to the indenture trustee as
collateral assignee of the funding agreement. Although such payments could be
viewed as a claim under the funding agreements within the meaning of Section
5/205(1)(d), it may also be argued to be a separate payment obligation.
Therefore, while in a proceeding before a court of competent jurisdiction the
court might find that a claim for an Additional Amount constitutes a claim under
a funding agreement, it also might find that such a claim is
35
not a claim entitled to the priority afforded by Section 5 /205(1)(d). Lord,
Bissell & Brook LLP has opined that if a claim for an Additional Amount does not
constitute a claim entitled to the priority afforded by Section 5/205(1)(d),
then in a properly prepared and presented case any claim for an Additional
Amount would be entitled to the same priority as claims of general creditors of
Allstate Life under Section 5/205(1)(g).
In the absence of controlling judicial precedents, the opinion of Lord,
Bissell & Brook LLP is based on a reasoned analysis of Illinois statutes, as
well as application of other states' judicial decisions involving similar or
analogous circumstances, and is subject to the limitations, qualifications and
assumptions set forth in its opinion letter. Investors should note that in the
event of the insolvency of an insurance company, however, the judicial
application of statutes governing the distribution of the insurer's general
assets has typically proceeded on a case-by-case basis.
The scope of the Lord, Bissell & Brook LLP opinion regarding a liquidation
proceeding with respect to Allstate Life is limited to an Illinois liquidation
proceeding and only those claims that are made in domiciliary proceedings in an
Illinois court. The opinion of Lord, Bissell & Brook LLP recites basic facts
with respect to the funding agreement, the transaction in which the funding
agreement is to be issued and the parties to the transaction, and those facts
are implicitly assumed in connection with the rendering of the opinion.
The assumptions, limitations and qualifications in the opinion include,
without limitation:
o that it is limited to the application of the law of the State of
Illinois;
o that the opinion is rendered solely as of the date thereof;
o that limited documents were reviewed in issuing the opinion and that
no opinion is expressed as to such documents;
o that the funding agreement may be issued with a life contingency;
o that the opinion assumes the veracity and accuracy of the form of the
funding agreement reviewed and the funding agreement's enforceability
under and compliance with applicable laws, as well as the adherence to
the proper legal formalities of and separate corporate distinctions
between Allstate Life and the holders of the notes;
o that there is no Illinois statutory or case law guidance as to the
definition of "annuity contract;" and
o that the terms "policyholders," "beneficiaries" and "insureds" are not
defined in the Illinois Liquidation Act.
Payments under Funding Agreements
Under the terms of each funding agreement securing the obligations under a
series of notes, Allstate Life will be obligated to make payments in the amounts
necessary to permit the issuing trust to meet in full its scheduled payment
obligations under the applicable series of notes.
Unless otherwise specified in the applicable pricing supplement, the
issuing trust will not pay any additional amounts to holders of the notes of a
series in the event that any withholding or deduction for or on account of any
United States taxes or other governmental charges is required. If the applicable
prospectus supplement or the applicable pricing supplement specifies that the
issuing trust will pay additional amounts to holders of the notes of the
applicable series in the event of certain changes in tax law, including the
repeal of the "Portfolio Interest Exemption" from United States Federal
withholding taxes for payments to non-U.S. Holders, the relevant funding
agreement(s) will provide that Allstate Life will make payments to the issuing
trust in the amounts necessary to permit it to pay additional amounts, if any,
required to be paid to holders of the particular series of notes. If the payment
of additional amounts to holders of a particular series of notes is required as
a result of a change in tax law, Allstate Life will be obligated to pay such
additional amounts to the issuing trust under the relevant funding agreement(s).
Events of Default
The following will be "Events of Default" under each funding agreement:
o default in the payment when due and payable of any principal amount
under the funding agreement;
36
o default in the payment of any interest accrued when such amounts
become due and payable, and continuance of such default for a period
of five business days;
o Allstate Life fails, is unable, or Allstate Life admits in writing its
inability, generally to pay its debts as such debts become due; or the
board of directors of Allstate Life adopts any action to approve or
for the purpose of effecting any of the actions referred to in this
paragraph;
o default in the performance or breach of any one or more of the other
covenants of Allstate Life under such funding agreement, and
continuance of such default or breach for a period of 45 days after
there has been given notice thereof to Allstate Life;
o a court having jurisdiction in the premises has entered a decree or
order for relief in respect of Allstate Life in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect in the United States of America or any other
applicable jurisdiction which decree or order is not stayed; or any
other similar relief has been granted under any applicable law;
o an insolvency case has been commenced against Allstate Life under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect in the United States of America or any other
applicable jurisdiction and such case shall not have been dismissed or
stayed, in each case within 45 days, or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, rehabilitator, conservator, sequestrator, trustee,
custodian or other officer having similar powers over Allstate Life,
or over all or a substantial part of its property, has been entered;
or there has occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Allstate Life, for all or a
substantial part of its property; or a court having jurisdiction in
the premises has entered a decree or order declaring the dissolution
of Allstate Life; or a warrant of attachment, execution or similar
process has been issued against any substantial part of the property
of Allstate Life;
o the Director of the Illinois Department of Insurance or any other
insurance supervisor having jurisdiction over Allstate Life shall have
filed a petition seeking any order under the Illinois Insurance Code
or other applicable insurance law to rehabilitate, liquidate, or
conserve the assets of, or take other similar action with respect to,
Allstate Life; or
o Allstate Life commences a voluntary case or other proceeding seeking
liquidation, dissolution, reorganization or other relief with respect
to itself or its debts under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect in the United States of
America (or any state thereof) or any other applicable jurisdiction,
or seeking the appointment of a receiver, liquidator, rehabilitator,
sequestrator, conservator or other similar officer of Allstate Life or
any substantial part of its property, or consents to the entry of an
order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or consents
to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or
Allstate Life makes any general assignment for the benefit of
creditors.
If one or more Events of Default shall have occurred and be continuing
(other than an Event of Default specified in the third, fourth, fifth, sixth,
seventh and eighth bullets above), the indenture trustee as collateral assignee
of the funding agreement may, by written notice to Allstate Life, declare the
principal of, plus accrued but unpaid interest on and any other amounts then due
and owing with respect to, such funding agreement to be due and payable and such
amounts will become due and payable on the date the written declaration is given
to Allstate Life; provided that if an Event of Default specified in the third,
fourth, fifth, sixth, seventh and eighth bullets above occurs, such amounts will
be automatically and immediately due and payable without any declaration or
other act on the part of the indenture trustee as collateral assignee of the
funding agreement; provided further that, without affecting the obligation of
Allstate Life to repay such amounts, no such repayment shall be made in
preference to other policyholders of Allstate Life.
Representations and Warranties in the Funding Agreement
In each funding agreement, each party will represent and warrant as
follows:
o the representing party has the power to enter into the funding
agreement and to consummate the transactions contemplated thereby;
37
o the funding agreement has been duly authorized, executed and delivered
by the representing party;
o assuming the due authorization, execution and delivery thereof by the
other party thereto, the funding agreement constitutes a legal, valid
and binding obligation of the representing party; and
o the funding agreement is enforceable against the representing party in
accordance with the terms thereof, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights and subject,
as to enforceability, to general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
Restrictions on Transfer
Each funding agreement will contain provisions prohibiting any transfer or
assignment of the funding agreement or any right to receive payments under the
funding agreement without the express written consent of Allstate Life and the
written affirmation of Allstate Life that it has changed its books and records
to reflect the transfer or assignment or right to receive payments under the
funding agreement. In connection with the issuance of a series of notes,
Allstate Life will consent to the sale and deposit of each relevant funding
agreement from the depositor to the issuing trust and the pledge and collateral
assignment of, and the grant of a security interest in, each such funding
agreement to the indenture trustee, and will affirm that it has changed its
books and records to reflect the foregoing.
Termination of Funding Agreements by Allstate Life
If the applicable pricing supplement specifies that the issuing trust will
pay additional amounts to holders of its notes in the event of certain changes
in tax law, including the repeal of the "Portfolio Interest Exemption" from
United States Federal withholding taxes for payments to non-U.S. Holders, the
funding agreement(s) securing such series of notes will provide that Allstate
Life may terminate the relevant funding agreement(s) upon the occurrence of
certain specified tax events. Unless otherwise specified in the applicable
Pricing Supplement, Allstate Life will not be able to unilaterally terminate any
funding agreements under any other circumstances. In order to terminate the
relevant funding agreement(s) in the event of a certain change in tax law,
Allstate Life must give not less than 30 and no more than 75 days prior written
notice to the issuing trust and pay such issuing trust the outstanding principal
of and accrued but unpaid interest, including any additional amounts due and
owing, on the notes of such series or such other amount as is specified in the
applicable pricing supplement for such notes. However, Allstate Life may not
give notice of termination earlier than 90 days prior to the earliest day when
Allstate Life would become obligated to pay any such additional amounts were a
payment in respect of the funding agreement(s) then due.
Governing Law
Each funding agreement will be governed by, and construed in accordance
with, the laws of the State of Illinois without regard to conflict of law
principles.
38
DESCRIPTION OF THE SUPPORT AND EXPENSES AGREEMENTS
Support and Expenses Agreements of the Trusts
This section provides a summary of the material terms and conditions of
each support and expenses agreement to be entered into by Allstate Life and the
applicable issuing trust (each, a "support agreement"). Each support agreement
will incorporate by reference the standard support and expenses agreement terms.
The form of support and expenses agreement is included in the form of series
instrument. This summary is not complete and you should read the detailed
provisions of the standard support and expenses agreement terms, and the
applicable support agreement. Copies of the support and expenses agreement terms
and the form of series instrument have been filed as exhibits to the
registration statement of which this prospectus is a part and are incorporated
into this prospectus by reference.
Under each support agreement, Allstate Life will agree to pay the costs and
expenses relating to the offering, sale and issuance of the applicable series of
notes, including in connection with the acquisition of the applicable funding
agreement(s), and costs, expenses and taxes incurred by the issuing trust other
than certain excluded amounts described below, and to indemnify the indenture
trustee, the Delaware trustee, the administrator and each other service
provider, as well as the issuing trust, with respect to certain matters. No
expenses will be payable from the applicable offering proceeds.
Under each support agreement, Allstate Life will not be obligated to pay
any costs, expenses, taxes or other amounts that are considered excluded
amounts. Excluded amounts include:
o any obligation Global Funding or any trust may have to make any
payment in accordance with the terms of any funding notes or any
notes;
o any obligation or expense of Global Funding or any trust to the extent
that such obligation or expense has actually been paid utilizing funds
available from payments under the applicable funding agreement(s) and
funding notes, as applicable;
o any cost, loss, damage, claim, action, suit, expense, disbursement,
tax, penalty and liability of any kind or nature whatsoever resulting
from or relating to any insurance regulatory or other governmental
authority asserting that:
o the funding notes or the notes are, or are deemed to be,
participations in the funding agreements or contracts of
insurance, or
o the offer, purchase, sale and/or transfer of the funding notes or
the notes and/or the pledge and collateral assignment of, or the
grant of a security interest in, any funding agreement,
constitute the conduct of the business of insurance or
reinsurance in any jurisdiction or require Global Funding, any
trust or any holder to be licensed as an insurer, insurance agent
or broker in any jurisdiction;
o any obligation of Global Funding or any trust to pay additional
amounts to indemnify any holder of the funding notes or the notes
against potential withholding tax liabilities;
o any cost, loss, damage, claim, expense, tax, penalty or liability of
any kind imposed on a service provider to the trust resulting from the
bad faith, misconduct or negligence of such service provider;
o any income taxes or overhead expenses of any service provider; or
o any withholding taxes imposed with respect to payments made under any
funding agreement or any notes, or any obligation to pay additional
amounts.
With respect to any support obligation owed to the Delaware trustee and the
administrator, excluded amounts specified in the third bullet point above shall
not apply.
Support and Expenses Agreement of Global Funding
Allstate Life and Global Funding entered into an amended and restated
support and expenses agreement dated as of March 15, 2006 (the "depositor
support agreement"). Pursuant to the depositor support agreement Allstate Life
agreed to pay the costs and expenses relating to the offering, sale and issuance
of each funding note and costs, expenses and taxes
39
incurred by Global Funding other than the excluded amounts (as described under "
- --Support and Expenses Agreements of the Trusts" above). Pursuant to the
depositor trust agreement Allstate Life also agreed to indemnify the indenture
trustee, the Delaware trustee, the administrator and each other service
provider, as well as Global Funding, with respect to certain matters.
Under the depositor trust agreement, Allstate Life will not be obligated to
pay any costs, expenses, taxes or other amounts that are considered excluded
amounts.
DESCRIPTION OF THE ADMINISTRATIVE SERVICES AGREEMENTS
Administrative Services Agreements of the Trusts
This section provides a summary of the material terms and conditions of
each administrative services agreement to be entered into between the
administrator and each trust to be formed in connection with the issuance of a
series of notes (each, an "administrative services agreement"). The form of
administrative services agreement is included in the form of series instrument.
Each administrative services agreement will incorporate by reference the
standard administrative services terms. This summary is not complete and you
should read the detailed provisions of the standard administrative services
terms and the applicable administrative services agreement. Copies of the
standard administrative services terms and the form of series instrument have
been filed as exhibits to the registration statement of which this prospectus is
a part and are incorporated into this prospectus by reference.
Pursuant to each administrative services agreement, the administrator will
perform various financial, statistical, accounting and other services for the
issuing trust, including maintenance of books and records, preparation, upon
request, of amendments to and waivers under certain documents, holding,
maintaining and preserving executed copies of certain documents; upon receipt of
notice, taking certain actions to enforce agreements as to which the issuing
trust is a party, preparing certain documents for signature by the issuing
trust, obtaining services of outside counsel, accountants and/or other outside
service providers, other actions incidental or reasonably necessary to
accomplish the foregoing and certain other actions specifically directed by the
issuing trust. In addition, the administrator will prepare and file with the SEC
and, if necessary, execute, on behalf of the issuing trust such documents,
forms, certifications or filings as may be required by the Exchange Act.
Each administrative services agreement will be governed by, and construed
in accordance with, the laws of the State of New York.
Administrative Services Agreement of Global Funding
Global Funding and the administrator executed the amended and restated
administrative services agreement of Global Funding, dated as of March 15, 2006
(as amended, supplemented, modified, restated or replaced from time to time, the
"depositor administrative services agreement").
Pursuant to the depositor administrative services agreement, the
administrator agreed to perform various financial, statistical, accounting and
other services for Global Funding, including maintenance of books and records,
preparation, upon request, of amendments to and waivers under certain documents,
holding, maintaining and preserving executed copies of certain documents; upon
receipt of notice, taking certain actions to enforce agreements as to which
Global Funding is a party, preparing certain documents for signature by Global
Funding, obtaining services of outside counsel, accountants and/or other outside
service providers, other actions incidental or reasonably necessary to
accomplish the foregoing and certain other actions specifically directed by
Global Funding. In addition, the administrator will prepare and file with the
SEC and, if necessary, execute on behalf of Global Funding such documents,
forms, certifications or filings as may be required by the Exchange Act.
The depositor administrative services agreement is governed by, and will be
construed in accordance with, the laws of the State of New York.
40
ERISA CONSIDERATIONS
ERISA imposes certain requirements on "employee benefit plans" (as defined
in Section 3(3) of ERISA) subject to ERISA, including entities such as
collective investment funds whose underlying assets include the assets of such
plans (collectively, "ERISA Plans"), and on those persons who are fiduciaries
with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA's
general fiduciary requirements, including the requirement of investment prudence
and diversification and the requirement that an ERISA Plan's investments be made
in accordance with the documents governing the ERISA Plan. Each fiduciary of an
ERISA Plan should consider the fiduciary standards of ERISA in the context of
the ERISA Plan's particular circumstances before authorizing an investment in
the notes. Accordingly, among other factors, the fiduciary should consider
whether the investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the ERISA Plan.
Under U.S. Department of Labor regulations at 29 C.F.R. 2510.3-101, as in
effect from time to time (the "Plan Asset Regulations"), as modified by Section
3(42) of ERISA, assets of a trust may be deemed to be "plan assets" of an ERISA
Plan or a "plan" such as an individual retirement account or a Keogh plan (as
defined in Section 4975(e)(1) of the Code, other than a governmental or church
plan described in Section 4975(g)(2) or (3) of the Code) (together with ERISA
Plans, "Plans") for purposes of ERISA and Section 4975 of the Code if a Plan or
a person investing plan assets of a Plan acquires an equity interest in a trust
and none of the exceptions contained in the Plan Asset Regulations, as modified
by Section 3(42) of ERISA, are applicable. An equity interest is defined under
the Plan Asset Regulations as an interest other than an instrument that is
treated as indebtedness under applicable local law and has no substantial equity
features. There is very little pertinent authority on the issue of what
constitutes an equity interest for purposes of the Plan Asset Regulations.
Accordingly, whether the notes would be treated as debt or equity for purposes
of the Plan Asset Regulations is unclear. Since, however, the holders of notes
of a series will have recourse only to the relevant collateral that secures such
series of notes, if the notes were treated as equity interests, the related
funding agreements would be treated as assets of any Plan holding a note.
Even if the notes were treated as equity interests for purposes of the Plan
Asset Regulations, because (a) each trust expects that the funding agreements
will be treated as debt, rather than equity, for federal tax purposes and (b)
the funding agreements should not be deemed to have any substantial equity
features, none of the assets underlying the funding agreements should be treated
as plan assets for purposes of the Plan Asset Regulations. Those conclusions are
based, in part, upon the traditional debt features of the funding agreements,
including the reasonable expectation of purchasers of the notes that the
payments due under the funding agreements will be paid when due, as well as the
absence of conversion rights, warrants and other typical equity features.
Moreover, since the Delaware trustee has no discretionary authority with
respect to the funding agreements, even if the funding agreements are treated as
assets of a Plan holding a note, the Delaware trustee should not be treated as
having acted in a fiduciary capacity with respect to the funding agreements and
the treatment of the funding agreements as plan assets should not, absent other
factors that do not appear to be present, give rise to a violation of the
prohibited transaction rules of ERISA or Section 4975 of the Code.
Therefore, subject to the considerations described herein, the notes are
eligible for purchase by Plans, any entity whose underlying assets include plan
assets by reason of any Plan's investment in the entity ("Plan Asset Entity")
and any person investing plan assets of any Plan.
Section 406 of ERISA and Section 4975 of the Code also prohibit Plans from
engaging in certain transactions involving plan assets with persons who are
"parties in interest" under ERISA or "disqualified persons" under the Code with
respect to such Plans (together, "Parties in Interest"). For example, if either
Global Funding, a trust or Allstate Life is a Party in Interest with respect to
a Plan (either directly or by reason of its ownership of its subsidiaries), the
purchase of the notes of the applicable series by or on behalf of the Plan would
likely be a prohibited transaction under Section 406(a)(1) of ERISA and/or
Section 4975(c)(1) of the Code, unless exemptive relief were available under an
applicable statutory or administrative exemption (see below). A Party in
Interest that engages in a prohibited transaction may be subject to excise taxes
and other penalties and liabilities under ERISA and the Code.
The U.S. Department of Labor has issued five prohibited transaction class
exemptions ("PTCEs") that may provide exemptive relief for direct or indirect
prohibited transactions resulting from the purchase and holding of the notes by
or on behalf of a Plan. Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts) and PTCE
84-14 (for certain transactions determined by independent qualified professional
asset managers). In addition to the foregoing, the Pension Protection Act of
2006 contained a new statutory exemption, codified in Section 408(b)(17) of
ERISA and Section 4975(d)(20) of the Code and together with any related
regulations promulgated by the U.S. Department of Labor (referred to as the
"Service Provider Exemption") that may provide exemptive relief. Any ERISA Plan
fiduciary relying on the Service Provider Exemption and purchasing the notes on
behalf of an ERISA Plan will have to make a determination that (x) the ERISA
Plan is paying no more than, and is receiving no less than, adequate
consideration in connection with the transaction and (y) neither Allstate Life,
Globing Funding or any of their affiliates directly or indirectly exercise any
discretionary authority or control or render investment advice with respect to
the assets of the ERISA Plan which such fiduciary is using to purchase the
notes, both of which are necessary preconditions to utilizing the Service
Provider Exemption. There can be no assurances that any of these class
exemptions or any other exemptions will be available with respect to any
41
particular transaction involving the notes. In addition, a purchaser of the
notes should be aware that even if the conditions specified in one or more of
the above referenced or other exemptions are met, the scope of the exemptive
relief provided by the exemption might not cover all acts which might be
construed as prohibited transactions.
Accordingly, the notes may not be purchased or held by any Plan, any Plan
Asset Entity or any person investing plan assets of any Plan, unless the
purchase and holding of the notes is exempt under PTCE 96-23, 95-60, 91-38,
90-1, 84-14 or similar exemption. Any purchaser of the notes or any interest
therein, including in the secondary market, will be deemed to have represented
that, among other things, either it is not a Plan or other Plan Asset Entity and
is not purchasing the notes on behalf of or with plan assets of any Plan or
other Plan Asset Entity; or its purchase and holding of the notes is exempt
under PTCE 96-23, 95-60, 91-38, 90-1, 84-14, the Service Provider Exemption or
similar exemption, and that such representations shall be deemed to be made each
day from the date on which the purchaser purchases through and including the
date on which the purchaser disposes of the notes.
Moreover, the notes may not be purchased or held by any Plan, any Plan
Asset Entity or any person investing plan assets of any Plan if Global Funding,
any trust or any of their respective affiliates (a) have investment or
administrative discretion with respect to the assets of the Plan used to effect
such purchase; (b) have authority or responsibility to give, or regularly give,
investment advice with respect to such assets, for a fee and pursuant to an
agreement or understanding that such advice (1) will serve as a primary basis
for investment decisions with respect to such assets, and (2) will be based on
the particular investment needs of such Plan; or (c) unless PTCE 95-60, 91-38 or
90-1 applies, are an employer maintaining or contributing to such Plan.
Any insurance company proposing to invest assets of its general account in
the notes should consider the implications of the United States Supreme Court's
decision in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings
Bank, 510 U.S. 86, 114 S. Ct. 517 (1993), in which the United States Supreme
Court held that in certain circumstances assets in a life insurance company's
general account are treated as assets of a Plan that owns a policy or other
contract with such insurance company, as well as the effect of Section 401(c) of
ERISA as interpreted by regulations issued by the U.S. Department of Labor in
January 2000.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing notes on
behalf of or with plan assets of any Plan or Plan Asset Entity consult with
their counsel regarding the potential consequences under ERISA and the Code and
the availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1,
84-14, the Service Provider Exemption or similar exemption.
Governmental plans (as defined in Section 3(32) of ERISA) and certain
church plans (as defined in Section 3(33) of ERISA), if no election has been
made under Section 410(d) of the Code, while not subject to the fiduciary
responsibility provisions of ERISA or the provisions of Section 4975 of the
Code, may nevertheless be subject to state, local or other federal laws that are
substantially similar to the foregoing provisions of ERISA and the Code such as
Section 503 of the Code. No view is expressed as to whether an investment in the
notes (and any continued holding of the notes), or the operation and
administration of Global Funding or any trust, is appropriate or permissible for
any governmental plan or church plan under Section 503 of the Code, or under any
state, local or other federal law respecting such plan. Any purchaser of the
notes or any interest therein, including in the secondary market, will be deemed
to have represented that, among other things either (a) it is not a government
plan or a church plan or any entity the assets of which are treated as including
assets of such plans and it is not purchasing the notes on behalf of or with
assets of any such plan or entity or (b) its purchase, holding and disposition
of the notes is not in violation of the laws applicable to any such governmental
plan or church plan, and such representations shall be deemed to be made each
day from the date on which the purchaser purchases, through and including the
date on which the purchaser disposes of the notes. Fiduciaries of any such plans
should consult with their counsel before purchasing any notes.
The sale of any notes to a Plan is in no respect a representation by any
party or entity that such an investment meets all relevant legal requirements
with respect to investments by Plans generally or any particular Plan, or that
such an investment is appropriate for Plans generally or any particular Plan.
Notwithstanding the above, with regard to a particular trust, the sale of
notes of the applicable series to Plans, or a person utilizing the plan assets
of Plans, might not be allowed, or might only be allowed subject to certain
additional conditions, in which case the applicable pricing supplement to this
prospectus will disclose the prohibition or such additional conditions.
42
THE EMPLOYEE BENEFIT PLAN CONSIDERATIONS SET FORTH ABOVE ARE ONLY INTENDED
AS A SUMMARY AND MAY NOT BE APPLICABLE DEPENDING UPON A PLAN'S SPECIFIC FACTS
AND CIRCUMSTANCES. PLAN FIDUCIARIES SHOULD CONSULT THEIR OWN ADVISORS WITH
RESPECT TO THE ADVISABILITY OF AN INVESTMENT IN THE NOTES, AND POTENTIALLY
ADVERSE CONSEQUENCES OF SUCH INVESTMENT, INCLUDING WITHOUT LIMITATION THE
POSSIBLE EFFECTS OF CHANGES IN APPLICABLE LAWS.
43
PLAN OF DISTRIBUTION
The trusts will offer the notes from time to time for sale to or through
the agents identified in the applicable prospectus supplement (collectively, the
"Agents"). The trusts may also offer the notes from time to time for sale
directly to investors and other purchasers. The distribution of the notes
offered under this prospectus may occur in one or more transactions at fixed
prices, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices, all of which may change
over time.
Each trust will use the net proceeds received from the issuance of the
related series of notes to purchase a funding note from Global Funding. Each
funding note will be cancelled immediately upon the assignment and deposit by
Global Funding of the related funding agreement(s) to the issuing trust.
Each trust will use the net proceeds received from the issuance of the
related series of notes to purchase a funding note from Global Funding. Global
Funding will use the net proceeds received from the sale of such funding note to
purchase one or more funding agreements issued by Allstate Life. Global Funding
will immediately assign absolutely to, and deposit into, the issuing trust each
such funding agreement and the related funding note will be cancelled
immediately upon the assignment and deposit by Global Funding of such funding
agreement(s) to and into the issuing trust.
In connection with any sale of the notes, the Agents may receive
compensation in the form of discounts, concessions or commissions from the
issuing trust or from purchasers of the notes for whom they may act as agents.
The Agents may sell the notes to or through dealers, and those dealers may
receive compensation in the form of discounts, concessions, or commissions from
the purchasers for whom they may act as agents. Any Agents that participate in
the offering of the notes will be identified and their compensation will be
described in the applicable prospectus supplement or the applicable pricing
supplement. The applicable prospectus supplement or the applicable pricing
supplement will also describe the other terms of the offering, including any
discounts or concessions allowed or reallowed or paid to dealers.
The Agents participating in the distribution of notes will be
"underwriters," with respect to the notes being distributed by them and the
funding agreements being purchased by the issuing trust, and any discounts or
commissions received by them on the sale or resale of notes may be deemed to be
underwriting discounts and commissions under the Securities Act. The Agents may
be entitled under agreements entered into with a trust, Global Funding and
Allstate Life to indemnification against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that the Agents may be required to make in respect of such liabilities.
Global Funding is a statutory issuer of the notes and the funding notes
under the Securities Act, and Allstate Life is a statutory issuer of the funding
agreements under the Securities Act.
With respect to any series of notes as to which one or more affiliates of
The Bank of New York Trust Company, N.A. will serve as an Agent, the relevant
trust will appoint an eligible entity other than The Bank of New York Trust
Company, N.A. and unaffiliated with any other Agent participating in the
offering of such series of Notes to serve as indenture trustee.
In the ordinary course of its business, the Agents and their affiliates
have engaged, and may in the future engage, in investment and commercial banking
transactions with Allstate Life and certain of its affiliates.
44
LEGAL OPINIONS
Certain matters regarding the notes, funding notes and funding agreements,
and their offering will be passed upon:
o for Allstate Life by Counsel of Allstate Life (as to Illinois law,
including the validity of the funding agreements thereunder);
o for Global Funding and Allstate Life by LeBoeuf, Lamb, Greene & MacRae
LLP (as to New York law and United States Federal securities law,
including the validity of the notes and the funding notes thereunder,
and as to tax law and certain insurance regulatory matters);
o for Global Funding and Allstate Life by Lord, Bissell & Brook LLP (as
to certain Illinois regulatory matters);
o for Global Funding and Wilmington Trust Company by Richards, Layton &
Finger, P.A. (as to Delaware law, including, organization, authority
and certain regulatory matters related to Global Funding, the trusts
and the Delaware trustee, certain security interest matters, the
enforceability of the trust agreements and the valid issuance of the
notes and the funding notes); and
o for the Agents by Sidley Austin LLP (as to United States Federal
securities law).
LeBoeuf, Lamb, Greene & MacRae LLP has from time to time represented, and
continues to represent, one or more of the Agents. Sidley Austin LLP has from
time to time represented, and continues to represent Allstate Life.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedules incorporated in this prospectus by reference from
the Allstate Life Insurance Company Annual Report on Form 10-K for the year
ended December 31, 2006 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report (which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to a change in method of accounting for certain nontraditional
long-duration contracts and for separate accounts in 2004, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended March 31, 2007 and 2006, which is incorporated herein by reference,
Deloitte & Touche LLP, an independent registered public accounting firm, have
applied limited procedures in accordance with the standards of the Public
Company Accounting Oversight Board (United States) for a review of such
information. However, as stated in their report included in the Company's
Quarterly Reports on Form 10-Q for the quarter ended March 31, 2007, and
incorporated by reference herein, they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche LLP are
not subject to the liability provisions of Section 11 of the Securities Act of
1933 for their report on the unaudited interim financial information because
that report is not a "report" or a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Act.
45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses to be incurred in
connection with the offering described in this registration statement. Except
for the Securities and Exchange Commission registration fee, all amounts shown
are estimates.
Securities and Exchange Commission registration fee $ 245,600
Fees and expenses of Trustees 25,000
Printing expenses 2,500
Accountant's fees and expenses 46,000
Legal fees and expenses 140,000
Rating Agency fees 984,000
Miscellaneous expenses 25,000
------
$ 1,468,100
Item 15. Indemnification of Directors and Officers.
Allstate Life Insurance Company
Under Section 8.75 of the Illinois Business Corporation Act of 1983,
Allstate Life Insurance Company is empowered, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any threatened, pending or
completed action, suit or proceeding to which such person is made a party or
threatened to be made a party by reason of his being or having been a director,
officer, employee or agent of Allstate Life Insurance Company, or serving or
having served at the request of Allstate Life Insurance Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. Section 8.75 further provides that indemnification to
which a person may be entitled under any by-law, agreement, vote of stockholders
or disinterested directors, or otherwise, and that such indemnification to which
a person may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, officer, employee or agent of Allstate Life Insurance
Company who has ceased to serve in such capacity, and shall inure to the benefit
of the heirs, executors and administrators of such a person.
Article VI, Section 1 of the by-laws of Allstate Life Insurance Company
provides that Allstate Life Insurance Company will indemnify all of its
directors, former directors, officers and former officers, to the fullest extent
permitted under law, who were or are a party or are threatened to be made party
to any proceeding by reason of the fact that such persons were or are directors
or officers of Allstate Life Insurance Company, against liabilities, expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by them. The indemnity shall not be deemed exclusive of any other rights to
which directors or officers may be entitled by law or under any articles of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise. In addition, the indemnity shall inure to the benefit of
the legal representatives of directors and officers or of their estates, whether
such representatives are court appointed or otherwise designated, and to the
benefit of the heirs of such directors and officers. The indemnity shall extend
to and include claims for such payments arising out of any proceeding commenced
or based on actions of such directors and officers taken prior to the
effectiveness of this indemnity; provided that payment of such claims had not
been agreed to or denied by Allstate Life Insurance Company before such date.
Article IV of the by-laws of The Allstate Corporation provides similar rights of
indemnification to all directors, former directors, officers and former officers
of Allstate Life Insurance Company, as a subsidiary of The Allstate Corporation.
The directors and officers of Allstate Life Insurance Company have been
provided liability insurance for certain losses arising from claims or charges
made against them while acting in their capacities as directors or officers of
Allstate Life Insurance Company.
II-1
Allstate Life Global Funding
Pursuant to an amended and restated support and expenses agreement between
Allstate Life Insurance Company and Allstate Life Global Funding to be dated on
or about the date of effectiveness of this registration statement, Allstate Life
Insurance Company will agree to indemnify Wilmington Trust Company as Delaware
trustee and AMACAR Pacific Corp. as administrator of Allstate Life Global
Funding with respect to certain matters related to the performance of such
functions.
Allstate Life Global Funding will agree, pursuant to an amended and
restated administrative services agreement of Allstate Life Global Funding to be
dated on or about the date of effectiveness of this registration statement (the
"depositor administrative services agreement"), to indemnify AMACAR Pacific
Corp., as administrator, and to hold the administrator harmless, from and
against certain losses arising out of, in connection with, or resulting from the
administrator's right and/or performance of the administrator's duties by the
administrator or its agents and employees pursuant to the depositor
administrative services agreement. Allstate Life Global Funding will also agree,
pursuant to an amended and restated indemnity agreement with Wilmington Trust
Company, to indemnify, protect, save and keep harmless Wilmington Trust Company,
as Delaware trustee, and its officers, directors, successors, assigns, legal
representatives, agents, and servants, from and against certain liabilities
relating to or arising out of the amended and restated trust agreement of
Allstate Life Global Funding, to be dated on or about the date of effectiveness
of this registration statement (as the same may be further amended, restated or
modified) or any other agreements to which Allstate Life Global Funding is a
party or to which Allstate Life Global Funding becomes a party.
Item 16. Exhibits.
(a) Exhibits
Exhibit No. Description
1.1 Form of Distribution Agreement.
*1.2 Form of Terms Agreement (included in Part E to the Form of Series Instrument).
1.3 Form of Representations and Indemnity Agreement.
3.1 Articles of Amendment to the Articles of Incorporation of Allstate Life Insurance Company dated
December 29, 1999 (incorporated by reference to Form 10 dated April 24, 2002 (File No. 000-31248)).
3.2 Allstate Life Insurance Company Amended and Restated Bylaws effective March 15, 2007 (incorporated by reference
to Form 8-K filed March 20, 2007 (File No. 0-31248)).
3.3 Certificate of Trust of Allstate Life Global Funding, dated as of June 24, 2002 (incorporated by
reference to Registration Statement (File No. 333-101424)).
*3.4 Amended and Restated Certificate of Trust of Allstate Life Global Funding, dated as of April 20, 2004.
*3.5 Form of Certificate of Trust of an Allstate Life Global Funding Trust.
*4.1 Form of Amended and Restated Trust Agreement of Allstate Life Global Funding entered into as of March 15, 2006 by
Wilmington Trust Company, as Delaware trustee, and AMACAR Pacific Corp., in its capacities as
Administrator and Trust Beneficial Owner.
**4.2 Amended Standard Trust Agreement Terms.
**4.3 Form of Trust Agreement of each Issuing Trust to be entered into among Wilmington Trust Company,
AMACAR Pacific Corp. and Allstate Life Global Funding (included in Part A to the Amended Form of Series
Instrument).
**4.4 Amended Standard Indenture Terms.
II-2
Exhibit No. Description
**4.5 Form of Indenture to be entered into between each Issuing Trust and The Bank of New York Trust Company, N.A.
(included in Part G to the Amended Form of Series Instrument).
**4.6 Amended Standard Funding Note Indenture Terms.
**4.7 Form of Funding Note Indenture to be entered into between Allstate Life Global Funding and The Bank of New York
Trust Company, N.A. (included in Part H to the Amended Form of Series Instrument).
4.8 Form of Global Security for Secured Medium Term Notes Program.
4.9 Form of Definitive Security for Secured Medium Term Notes Program.
4.10 Form of Global Security for Allstate Life(R) CoreNotes(R) Program.
4.11 Form of Definitive Security for Allstate Life(R) CoreNotes(R) Program.
**4.12 Amended Form of Series Instrument.
**4.13 Amended Form of Closing Instrument.
***5.1 Opinion of Counsel of Allstate Life Insurance Company.
***5.2 Opinion of LeBoeuf, Lamb, Greene & MacRae LLP.
***8 Opinion of LeBoeuf, Lamb, Greene & MacRae LLP, as Tax Counsel.
10.1 Form of Funding Agreement between Allstate Life Insurance Company and Allstate Life Global Funding
(incorporated by reference to Registration Statement (File No. 333-101424)).
10.2 Form of Funding Note related to Secured Medium Term Notes issued under the Allstate Life(R)
CoreNotes(R) Program.
10.3 Form of Funding Note related to Secured Medium Term Notes issued under the Secured Medium Term
Notes Program.
*10.4 Form of Amended and Restated Support and Expenses Agreement entered into as of March 15, 2006 between Allstate
Life Insurance Company and Allstate Life Global Funding.
*10.5 Standard Support and Expenses Agreement Terms.
**10.6 Form of Support and Expenses Agreement (included in Part C to the Amended Form of Series Instrument).
*10.7 Form of Amended and Restated Administrative Services Agreement entered into as of March 15, 2006 between Allstate
Life Global Funding and AMACAR Pacific Corp.
**10.8 Amended Standard Administrative Services Agreement Terms.
**10.9 Form of Administrative Services Agreement of each Issuing Trust to be entered into between each
Issuing Trust and AMACAR Pacific Corp. (included in Part B to the Amended Form of Series Instrument).
10.10 Form of Amended and Restated Name Licensing Agreement between Allstate Insurance Company and Allstate
Life Global Funding.
**10.11 Form of Name Licensing Agreement of each Issuing Trust (included in Part D to the Amended Form of Series
Instrument).
10.12 Standard Name Licensing Agreement Terms.
10.13 Indemnity Agreement, dated as of June 24, 2002, between Allstate Life Global Funding and Wilmington Trust
Company (incorporated by reference to Registration Statement (File No. 333-101424)).
II-3
Exhibit No. Description
10.14 Form of Amended and Restated Indemnity Agreement to be entered into between Allstate Life Global
Funding and Wilmington Trust Company (incorporated by reference to Registration Statement (File
No. 333-112249)).
12 Ratio of Earnings to Fixed Charges of Allstate Life Insurance Company.
23.1 Consent of Independent Registered Public Accounting Firm.
***23.2 Consent of Counsel of Allstate Life Insurance Company (included in Exhibit 5.1).
***23.3 Consent of LeBoeuf, Lamb, Greene & MacRae LLP.
***23.4 Consent of Lord, Bissell & Brook LLP.
***23.5 Consent of Richards, Layton & Finger, P.A.
***24 Power of Attorney
***25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Trust Company, N.A.
as Indenture Trustee under the Indenture.
***25.2 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Trust Company, N.A.
as Funding Note Indenture Trustee under the Funding Note Indenture.
* Incorporated by reference to Registration Statement (File No. 333-129157).
** Incorporated by reference to Form 8-K filed October 5, 2006 (File No.
1-32192).
*** Previously filed.
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from low or high end estimated offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b), if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
Provided, however, That:
(A) The undertakings set forth in paragraphs (i), (ii) and (iii) above do
not apply if the registration statement is on Form S-3 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the registrants pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b)
that is part of this registration statement.
(B) Provided, further, however, that the undertakings set forth in
paragraphs (i) and (ii) do not apply if the registration statement is for an
offering of asset-backed securities on Form S-1 or Form S-3, and the information
required to be included in a post-effective amendment is provided pursuant to
Item 1100(c) of Regulation AB.
II-4
(2) That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser, if the registrants are relying on Rule 430(B):
(A) Each prospectus filed by the registrants pursuant to Rule 424(b)(3)
shall be deemed to be part of this registration statement as of the date the
filed prospectus was deemed part of and included in this registration statement;
and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of this registration statement in reliance on Rule
430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x)
for the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in this
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430(B), for liability purposes of the issuer and any person that is at the date
an underwriter, such date shall be deemed to be a new effective date of this
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided ,
however, that no statement made in this registration statement or prospectus
that is part of this registration statement or made in a document incorporated
or deemed incorporated by reference into this registration statement or
prospectus that is part of this registration statement will, as to a purchaser
with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in this registration statement or prospectus
that was part of this registration statement or made in any such document
immediately prior to such effective date.
(3) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrants undertake that in a primary offering of
securities of the undersigned registrants pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrants will be
sellers to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrants
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrants or used or referred to by the undersigned
registrants;
(iii) The portion of any other free writing prospectus relating to the
offering containing materials information about the undersigned registrants or
their securities provided by or on behalf of the undersigned registrants; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrants to the purchaser.
(4) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrants hereby further undertake that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
any annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be
II-5
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned registrants hereby undertake to file an application for
the purposes of determining eligibility of the trustee to act under Subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions discussed in Item 15 above, or
otherwise, the undersigned registrants have been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Allstate Life of expenses incurred or paid by its director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, Allstate Life will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
(e) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 of a third party that is incorporated by reference in the
registration statement in accordance with Item 1100(c)(1) of Regulation AB (17
CFR 229.1100(c)(1)) shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(f) The undersigned registrants hereby undertake to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Allstate Life Global Funding certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this amendment no. 1 to the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Charlotte, State of
North Carolina, on June 26, 2007.
ALLSTATE LIFE GLOBAL FUNDING
By: AMACAR Pacific Corp.,
not in its individual capacity,
but solely as administrator
By: /s/ JULIANA C. JOHNSON
--------------------------
Name: Juliana C. Johnson
Title: Chief Financial Officer, Principal Accounting Officer
and Director of AMACAR Pacific Corp.
Pursuant to the requirements of the Securities Act of 1933, this amendment
no. 1 to the registration statement has been signed on behalf of Allstate Life
Global Funding by AMACAR Pacific Corp., not in its individual capacity, but
solely as the administrator, on June 26, 2007 by the following persons solely in
the capacities indicated.
Signature Title
/s/ Douglas K. Johnson Chief Executive Officer and Director of AMACAR Pacific Corp.
- ---------------------- (Principal Executive Officer)
Douglas K. Johnson
/s/ Juliana C. Johnson Chief Financial Officer, Principal Accounting Officer and Director of
- ---------------------- AMACAR Pacific Corp.
Juliana C. Johnson (Principal Financial Officer and Principal Accounting Officer)
/s/ Evelyn Echevarria Vice President, Secretary and Director of AMACAR Pacific Corp.
- ----------------------
Evelyn Echevarria
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Pursuant to the requirements of the Securities Act of 1933, as amended,
Allstate Life Insurance Company certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this amendment no. 1 to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the Township of
Northfield, and State of Illinois, on June 26, 2007.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ James E. Hohmann
---------------------------
James E. Hohmann, President,
Chief Executive Officer,
and Director of Allstate Life
Pursuant to the requirements of the Securities Act of 1933, this amendment
no. 1 to the registration statement has been signed on June 26, 2007 by the
following persons in the capacities indicated.
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Signature Title
* Senior Vice President and Director of Allstate Life
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David A. Bird
* Senior Vice President and Director of Allstate Life
- -----------------------
Michael B. Boyle
* Director of Allstate Life
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Danny L. Hale
/s/ James E. Hohmann President, Chief Executive Officer, and Director of Allstate Life
- ----------------------- (Principal Executive Officer)
James E. Hohmann
* Senior Vice President and Director of Allstate Life
- -----------------------
John C. Lounds
* Group Vice President and Controller of Allstate Life
- ----------------------- (Principal Accounting Officer)
Samuel H. Pilch
* Senior Vice President, Chief Financial Officer and Director of Allstate Life
- ----------------------- (Principal Financial Officer)
John C. Pintozzi
* Director of Allstate Life
- -----------------------
George E. Ruebenson
* Senior Vice President, Chief Investment Officer and Director of Allstate Life
- -----------------------
Eric A. Simonson
* Senior Vice President and Director of Allstate Life
- -----------------------
Kevin R. Slawin
/s/ Michael J. Velotta Senior Vice President, General Counsel, Secretary and Director of Allstate Life
- -----------------------
Michael J. Velotta
* Senior Vice President and Director of Allstate Life
- -----------------------
Douglas B. Welch
* Chairman of the Board and Director of Allstate Life
- ------------------------
Thomas J. Wilson, II
* By: /s/ MICHAEL J. VELOTTA
------------------------
Michael J. Velotta
Attorney in fact
II-9
EXHIBIT INDEX
Exhibit No. Description
1.1 Form of Distribution Agreement.
*1.2 Form of Terms Agreement (included in Part E to the Form of Series Instrument).
1.3 Form of Representations and Indemnity Agreement.
3.1 Articles of Amendment to the Articles of Incorporation of Allstate Life Insurance Company dated
December 29, 1999 (incorporated by reference to Form 10 dated April 24, 2002 (File No. 000-31248)).
3.2 Allstate Life Insurance Company Amended and Restated Bylaws effective March 15, 2007 (incorporated by reference
to Form 8-K filed March 20, 2007 (File No. 0-31248)).
3.3 Certificate of Trust of Allstate Life Global Funding, dated as of June 24, 2002 (incorporated by
reference to Registration Statement (File No. 333-101424)).
*3.4 Amended and Restated Certificate of Trust of Allstate Life Global Funding, dated as of April 20, 2004.
*3.5 Form of Certificate of Trust of an Allstate Life Global Funding Trust.
*4.1 Form of Amended and Restated Trust Agreement of Allstate Life Global Funding entered into as of March 15, 2006 by
Wilmington Trust Company, as Delaware trustee, and AMACAR Pacific Corp., in its capacities as
Administrator and Trust Beneficial Owner.
**4.2 Amended Standard Trust Agreement Terms.
**4.3 Form of Trust Agreement of each Issuing Trust to be entered into among Wilmington Trust Company,
AMACAR Pacific Corp. and Allstate Life Global Funding (included in Part A to the Amended Form of Series
Instrument).
**4.4 Amended Standard Indenture Terms.
**4.5 Form of Indenture to be entered into between each Issuing Trust and The Bank of New York Trust Company, N.A.
(included in Part G to the Amended Form of Series Instrument).
**4.6 Amended Standard Funding Note Indenture Terms.
**4.7 Form of Funding Note Indenture to be entered into between Allstate Life Global Funding and The Bank of New York
Trust Company, N.A. (included in Part H to the Amended Form of Series Instrument).
4.8 Amended Form of Global Security for Secured Medium Term Notes Program.
4.9 Amended Form of Definitive Security for Secured Medium Term Notes Program.
4.10 Amended Form of Global Security for Allstate Life(R) CoreNotes(R) Program.
4.11 Amended Form of Definitive Security for Allstate Life(R) CoreNotes(R) Program.
**4.12 Amended Form of Series Instrument.
**4.13 Amended Form of Closing Instrument.
***5.1 Opinion of Counsel of Allstate Life Insurance Company.
***5.2 Opinion of LeBoeuf, Lamb, Greene & MacRae LLP.
***8 Opinion of LeBoeuf, Lamb, Greene & MacRae LLP, as Tax Counsel.
10.1 Form of Funding Agreement between Allstate Life Insurance Company and Allstate Life Global Funding
(incorporated by reference to Registration Statement (File No. 333-101424)).
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10.2 Amended Form of Funding Note related to Secured Medium Term Notes issued under the Allstate Life(R)
CoreNotes(R) Program.
10.3 Form of Funding Note related to Secured Medium Term Notes issued under the Secured Medium Term
Notes Program.
*10.4 Form of Amended and Restated Support and Expenses Agreement entered into as of March 15, 2006 between Allstate
Life Insurance Company and Allstate Life Global Funding.
*10.5 Standard Support and Expenses Agreement Terms.
**10.6 Form of Support and Expenses Agreement (included in Part C to the Amended Form of Series Instrument).
*10.7 Form of Amended and Restated Administrative Services Agreement entered into as of March 15, 2006 between Allstate
Life Global Funding and AMACAR Pacific Corp.
**10.8 Amended Standard Administrative Services Agreement Terms.
**10.9 Form of Administrative Services Agreement of each Issuing Trust to be entered into between each
Issuing Trust and AMACAR Pacific Corp. (included in Part B to the Amended Form of Series Instrument).
10.10 Form of Amended and Restated Name Licensing Agreement between Allstate Insurance Company and Allstate
Life Global Funding.
**10.11 Form of Name Licensing Agreement of each Issuing Trust (included in Part D to the Amended Form of Series
Instrument).
10.12 Standard Name Licensing Agreement Terms.
10.13 Indemnity Agreement, dated as of June 24, 2002, between Allstate Life Global Funding and Wilmington Trust
Company (incorporated by reference to Registration Statement (File No. 333-101424)).
10.14 Form of Amended and Restated Indemnity Agreement to be entered into between Allstate Life Global
Funding and Wilmington Trust Company (incorporated by reference to Registration Statement (File
No. 333-112249)).
12 Ratio of Earnings to Fixed Charges of Allstate Life Insurance Company.
23.1 Consent of Independent Registered Public Accounting Firm.
***23.2 Consent of Counsel of Allstate Life Insurance Company (included in Exhibit 5.1).
***23.3 Consent of LeBoeuf, Lamb, Greene & MacRae LLP.
***23.4 Consent of Lord, Bissell & Brook LLP.
***23.5 Consent of Richards, Layton & Finger, P.A.
***24 Power of Attorney.
***25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Trust Company, N.A.
as Indenture Trustee under the Indenture.
***25.2 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Trust Company, N.A.
as Funding Note Indenture Trustee under the Funding Note Indenture.
* Incorporated by reference to Registration Statement (File No. 333-129157).
** Incorporated by reference to Form 8-K filed October 5, 2006 (File No.
1-32192).
*** Previously filed.
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ALLSTATE LIFE GLOBAL FUNDING
$[__________]
SECURED MEDIUM TERM NOTE PROGRAM
DISTRIBUTION AGREEMENT
[__________], 2007
Merrill Lynch, Pierce, Fenner & Smith
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A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital Inc.
Bear, Stearns & Co. Inc.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Greenwich Capital Markets, Inc.
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
Ladies and Gentlemen:
Allstate Life Global Funding, a Delaware statutory trust (“Global Funding”), formed pursuant to a Trust Agreement, dated June 24, 2002, as amended, restated or modified from time to time (the “Global Funding Trust Agreement”), between Wilmington Trust Company, as Delaware trustee (the “Global Funding Delaware Trustee”), and AMACAR Pacific Corp., as trust beneficial owner, in connection with the Allstate Life Global Funding Secured Medium Term Note Program (the “Institutional Program”) and the Allstate Life(r) CoreNotes(r) Program (the “Retail Program” and, together with the Institutional Program, the “Programs”), confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated and each other institution named on Schedule 1 hereto (each, an “Agent”) with respect to the issue and sale, from time to time by separate and distinct Delaware statutory trusts formed and beneficially owned by Global Funding (each, an “Issuing Trust” and, collectively, the “Issuing Trusts”), of notes due between nine months and thirty years from the date of issuance (the “Notes”). As of the date
________________________
Allstate Life(r) is a registered service mark of Allstate Insurance Company.
CoreNotes(r) is a registered service mark of Merrill Lynch & Co.
hereof, the Issuing Trusts are authorized to issue collectively up to U.S. $[___________] aggregate initial offering price of Notes (or its equivalent as determined in Section 4(s)).
From time to time, upon the formation of a new Issuing Trust, in connection with the offer and sale of Notes by such Issuing Trust, upon execution and delivery by such Issuing Trust and the applicable Agent or Agents of the terms agreement (the “Terms Agreement”) set forth in Part E of the series instrument to be executed by Global Funding, such Issuing Trust and the applicable Agent or Agents, among others (the “Series Instrument”), such Issuing Trust shall become a party hereto in relation to its Notes (the time of such execution and delivery referred to herein as such Issuing Trust’s “Trust Effective Time”), with all the authority, rights, powers, duties and obligations of an Issuing Trust as if originally named as an Issuing Trust hereunder. Any agreement, covenant, acknowledgment, representation or warranty made by an Issuing Trust hereunder shall be deemed to have been made by each Issuing Trust at its Trust Effective Time and at the Applicable Time (as defined in the applicable Terms Agreement for such Issuing Trust, the “Applicable Time”) unless another time or times are specified herein, in which case such specified time or times shall instead apply.
The Notes of each Issuing Trust will be issued pursuant to an indenture, as amended or modified from time to time, which will adopt and incorporate the standard indenture terms (each, an “Indenture” and, collectively, the “Indentures”) between the relevant Issuing Trust and The Bank of New York Trust Company, N.A. (or another entity specified as Indenture Trustee in the applicable Indenture), as indenture trustee (the “Indenture Trustee”). Each Issuing Trust shall issue only one series of Notes.
Each Issuing Trust will immediately use the proceeds from the sale of its Notes to purchase a funding note (each a “Funding Note”) from Global Funding. Each Funding Note will be issued pursuant to a funding note indenture, as amended or modified from time to time, which will adopt and incorporate the standard funding note indenture terms (each, a “Funding Note Indenture”) between Global Funding and The Bank of New York Trust Company, N.A. (or another entity specified as Funding Note Indenture Trustee in the applicable Funding Note Indenture), as the funding note indenture trustee (the “Funding Note Indenture Trustee”). Global Funding will immediately use the net proceeds received from the sale of the Funding Note to purchase one or more funding agreements (the “Funding Agreement(s)”) issued by Allstate Life Insurance Company, an Illinois stock life insurance company (the “Company”). Global Funding will immediately assign absolutely to, and deposit into the relevant Issuing Trust, the relevant Funding Agreement(s) and the relevant Funding Note will be surrendered. The Notes of the Issuing Trust will be secured by the relevant Funding Agreement(s). The Issuing Trust will immediately collaterally assign, and grant a first priority perfected security interest in, the Funding Agreement(s) to the Indenture Trustee for the benefit of the holders of the Notes of the Issuing Trust pursuant to the terms of the Indenture. In connection with the sale of its Notes, the Issuing Trust will prepare a Pricing Supplement (the “Pricing Supplement”) including or incorporating by reference a description of the terms of the Notes and the terms of the offering.
The Agents include those institutions named from time to time in Schedule 1 hereto and any institution appointed as an Agent pursuant to Section 20 below. If any institution is
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appointed as an Agent only with respect to the Notes of a particular Issuing Trust, such institution shall only be an Agent with respect to Notes of such Issuing Trust.
This Agreement specifies the terms and conditions on which Notes may be sold by an Issuing Trust (i) to one or more Agents as principal for resale to investors, (ii) directly to investors through the applicable Agent as an agent of such Issuing Trust in soliciting offers for the purchase of Notes and (iii) to such other investors in compliance with all applicable securities laws as such Issuing Trust may determine from time to time.
The Company has registered shares of its common stock with the Securities and Exchange Commission (the “Commission”) pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), on Form 10 under the 1934 Act. Pursuant to Rule 429 of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the “1933 Act Regulations”), the Company and Global Funding have filed with the Commission (i) a registration statement on Form S-3 (No. 333-143541) and pre-effective amendment No.1 under the Securities Act of 1933, as amended (the “1933 Act”), for the registration of the Funding Agreement(s), the Funding Notes, and the Notes, and the offering thereof in accordance with Rule 415 of the 1933 Act Regulations; (ii) the related prospectus dated [__________], 2007 covering the Notes offered under the Programs (the “Base Prospectus”); (iii) the prospectus supplement to the Base Prospectus, dated [__________], 2007, covering the Notes offered under the Institutional Program (the “Institutional Prospectus Supplement” and together with the Base Prospectus, the “Institutional Base Prospectus”); and (iv) the prospectus supplement to the Base Prospectus, dated [__________], 2007, covering the Notes offered under the Retail Program (the “Retail Prospectus Supplement” and, together with the Base Prospectus, the “Retail Base Prospectus”). Such registration statement (as so amended, if applicable), is also the first post-effective amendment to registration statement on Form S-3 (No. 333-129157) filed by the Company and Global Funding. The registration statement on Form S-3 (No. 333-143541) (as so amended, if applicable) has been declared effective by the Commission, and the form of Indenture and the form of Funding Note Indenture have been duly qualified under the Trust Indenture Act of 1939, as amended (the “1939 Act”), and the Company and Global Funding have filed such post-effective amendments thereto as may be required prior to the acceptance by Global Funding and any Issuing Trust of any offer for the purchase of Notes and each such post-effective amendment has been declared effective by the Commission. Such registration statement on Form S-3 (No. 333-143541), at any relevant time, including the amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or included therein by the 1933 Act Regulations is referred to herein as the “Registration Statement”. If the Company or Global Funding file a registration statement with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the “Rule 462(b) Registration Statement”), then, after such filing, all references to the “Registration Statement” shall also be deemed to include the Rule 462(b) Registration Statement. With respect to the offering of a series of Notes under the Institutional Program, the Institutional Base Prospectus, and with respect to the offering of a series of Notes under the Retail Program, the Retail Base Prospectus, in each case including the Pricing Supplement relating to the offering of such series of Notes, in the form first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations (or in the form first made available to the applicable Agent(s) by the Company and the applicable Issuing Trust to meet
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requests of purchasers pursuant to Rule 173 under the 1933 Act Regulations), are referred to herein as the “Prospectus.” The term “preliminary prospectus” means any preliminary form of the Prospectus. For all purposes of this Agreement, the term “free writing prospectus” has the meaning set forth in Rule 405 under the 1933 Act Regulations and the term “Time of Sale Prospectus” means (i) with respect to the offer and sale of any series of Notes under the Institutional Program, the Institutional Base Prospectus; (ii) with respect to the offer and sale of any series of Notes under the Retail Program, the Retail Base Prospectus in each case as amended or supplemented from time to time, together with any other preliminary prospectus relating to the offer and sale of such series of Notes, any Pricing Supplement relating to the offer and sale of such series of Notes filed with the Commission prior to the Applicable Time and each free writing prospectus (including any final term sheet relating to such series of Notes) attached as, or identified in, Exhibit A to the applicable Terms Agreement and any other information identified in Exhibit A to the applicable Terms Agreement; and (iii) under either Program, any electronic road show approved or prepared by the Company and made available by the Company and reviewed by the applicable investor(s) in connection with an offering of Notes that is not required to be filed pursuant to Rule 433(d)(8)(i). All references to the “Registration Statement”, the “Institutional Base Prospectus”, the “Retail Base Prospectus”, any “preliminary prospectus”, the “Time of Sale Prospectus” and the “Prospectus” shall also be deemed to include all amendments and supplements thereto and all documents incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, Time of Sale Prospectus, Prospectus, any preliminary prospectus or free writing prospectus, or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).
All references in this Agreement to financial statements and schedules and other information which is “disclosed”, “contained”, “included” or “stated” (or other references of like import) in the Registration Statement, Time of Sale Prospectus, Prospectus, any preliminary prospectus or free writing prospectus shall be deemed to include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the Registration Statement, Time of Sale Prospectus, Prospectus, any preliminary prospectus or free writing prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, Time of Sale Prospectus, Institutional Base Prospectus, Retail Base Prospectus, Prospectus, any preliminary prospectus or free writing prospectus shall be deemed to include all documents subsequently filed with the Commission pursuant to the 1934 Act which are incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be part of or included in the Registration Statement, Time of Sale Prospectus, Institutional Base Prospectus, Retail Base Prospectus, Prospectus, any preliminary prospectus or free writing prospectus, as the case may be.
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein, Global Funding and the relevant Issuing Trust hereby agree that the Notes of such Issuing Trust will be sold to or through the Agents pursuant to the terms of this Agreement. Global Funding and the relevant Issuing Trust agree that they will not appoint any other agents to act on an Issuing Trust’s behalf or to assist an Issuing Trust, in the placement of the Notes; provided, however that with respect to transactions in which the sales of Notes will be targeted to institutional purchasers under the Institutional Program, Global Funding and an Issuing Trust may enter into arrangements with
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other agent(s) not a party to this Agreement provided that such agent(s) enter into an agreement with terms substantially identical to those contained herein. Global Funding and each Issuing Trust agree that they hereby appoint only Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Purchasing Agent”) to act on an Issuing Trust’s behalf or to assist an Issuing Trust in connection with transactions in which the sale of Notes will be targeted to retail purchasers under the Retail Program. For purposes of this Agreement, all references to any Agent shall be deemed to include the Purchasing Agent.
(b) Sale of Notes. Each Issuing Trust shall not sell or approve the solicitation of offers for the purchase of Notes in excess of the aggregate initial offering price of Notes registered pursuant to the Registration Statement. The Agents shall have no responsibility for maintaining records with respect to the aggregate initial offering price of Notes sold, or of otherwise monitoring the availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to purchase Notes issued through any Issuing Trust as principal. However, absent an agreement by and between Global Funding and the relevant Issuing Trust, on the one hand, and an Agent, on the other hand, for such Agent to act as an agent for the relevant Issuing Trust, such Agent shall be deemed to be acting as principal in connection with any offering of Notes by such Issuing Trust. Accordingly, the Agents, individually or in a syndicate, may agree from time to time to purchase Notes from an Issuing Trust as principal for resale to investors determined by such Agents. Any purchase of Notes from an Issuing Trust by an Agent as principal shall be made in accordance with Section 3(a) hereof.
(d) Solicitations as Agent. If agreed upon between an Agent, on the one hand, and Global Funding and an Issuing Trust, on the other hand, then such Agent, acting solely as an agent for such Issuing Trust and not as principal, will solicit offers for the purchase of Notes. Such Agent will communicate to such Issuing Trust, orally, each offer for the purchase of Notes solicited by it on an agency basis other than those offers rejected by such Agent. Such Agent shall have the right, in its discretion reasonably exercised, to reject any offer for the purchase of Notes, in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. Such Issuing Trust may accept or reject any offer for the purchase of Notes, in whole or in part. Such Agent shall make reasonable efforts to assist such Issuing Trust in obtaining performance by each purchaser whose offer for the purchase of Notes has been solicited by it on an agency basis and accepted by such Issuing Trust. Such Agent shall not have any liability to such Issuing Trust in the event that any such purchase is not consummated for any reason. If such Issuing Trust shall default on its obligation to deliver Notes to a purchaser whose offer has been solicited by an Agent on an agency basis and accepted by such Issuing Trust, then (i) such Issuing Trust shall hold such Agent harmless against any loss, claim or damage arising from or as a result of such default by such Issuing Trust and (ii) the Issuing Trust shall be responsible to pay to such Agent any commission to which such Agent would otherwise be entitled absent such default.
(e) Reliance. Each Issuing Trust and Global Funding, on the one hand, and the Agents, on the other hand, agree that any Notes purchased from an Issuing Trust by one or more Agents as principal shall be purchased, and any Notes the placement of which an Agent arranges as an agent of such Issuing Trust shall be placed by such Agent, in reliance on the
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representations, warranties, covenants and agreements of Global Funding and such Issuing Trust contained herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) Representations and Warranties of Global Funding. Global Funding represents and warrants to each Agent as of the date hereof, to the applicable Agent(s) as of the Applicable Time for the relevant Issuing Trust, to the applicable Agent(s) as of the date of each delivery of Notes (whether to such Agent as principal or through such Agent as agent) (the date of each such delivery is referred to herein as a “Settlement Date”), to each Agent as of any time the Time of Sale Prospectus shall be amended or supplemented and to each Agent as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (each of the times referenced above is referred to herein as a “Global Funding Representation Date”), as follows:
(i) Due Formation and Good Standing of Global Funding. Global Funding is a statutory trust, duly formed under Delaware law pursuant to the Global Funding Trust Agreement and the filing of a certificate of trust with the Delaware Secretary of State, which is validly existing and in good standing as a statutory trust under the laws of the State of Delaware.
(ii) Registration Statement, Preliminary Prospectuses, Time of Sale Prospectus, and Prospectus; Filing Status. Global Funding meets the requirements for use of Form S-3 under the 1933 Act; the Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of Global Funding, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with; the form of Indenture has been duly qualified under the 1939 Act; the form of Funding Note Indenture has been duly qualified under the 1939 Act; at the respective times that each part of the Registration Statement became effective and at each Global Funding Representation Date, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the “1934 Act Regulations”) and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the “1939 Act Regulations”) and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; each preliminary prospectus and Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act Regulations, complied when so filed in all material respects with the 1933 Act and the 1933 Act Regulations; each preliminary prospectus and the Prospectus delivered to an Agent for use in connection with the offering of Notes are identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T; and at the date hereof, at the date of the Base Prospectus and each amendment or supplement thereto and at each Global Funding Representation Date, neither the Base Prospectus nor any amendment or supplement thereto included or will include an untrue
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statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Time of Sale Prospectus does not, and at the Applicable Time and at the applicable Settlement Date, the Time of Sale Prospectus, as then amended or supplemented by Global Funding, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to (i) statements in or omissions from the Registration Statement, the Base Prospectus, the Time of Sale Prospectus or the Prospectus made in reliance upon and in conformity with information furnished to Global Funding in writing by the applicable Agents concerning such Agents expressly for use in the Registration Statement, the Base Prospectus, the Time of Sale Prospectus or the Prospectus or (ii) the parts of the Registration Statement which constitute the Statement of Eligibility and Qualification (Form T-1) of the Indenture Trustee and the Funding Note Indenture Trustee under the 1939 Act.
(iii) Incorporated Documents; 1934 Act Filings. The documents incorporated or deemed to be incorporated by reference in the Time of Sale Prospectus or the Base Prospectus, as amended or supplemented, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and, when read together with the other information in the Time of Sale Prospectus or the Base Prospectus, at the date hereof, at the date of the Time of Sale Prospectus or the Base Prospectus and at each Global Funding Representation Date, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Any reports, filings or other documents, exhibits or schedules filed by Global Funding and each Issuing Trust pursuant to the 1934 Act comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations.
(iv) Free Writing Prospectuses. At the time of initial filing of the Registration Statement, at the earliest time thereafter that Global Funding or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of any Notes and at each Global Funding Representation Date, Global Funding was not and is not an “ineligible issuer,” as defined in Rule 405 of the 1933 Act Regulations. Any free writing prospectus that Global Funding is required to file pursuant to Rule 433(d) under the 1933 Act Regulations has been, or will be, filed with the Commission in accordance with the requirements of the 1933 Act and the 1933 Act Regulations. Each free writing prospectus that Global Funding has filed, or is required to file, pursuant to Rule 433(d) under the 1933 Act Regulations or that was prepared by or on behalf of or used by Global Funding complies or will comply in all material respects with the requirements of the applicable 1933 Act Regulations. Except with respect to the offering of any series of Notes, the free writing prospectuses attached as, or identified in, Exhibit A to the applicable Terms Agreement, Global Funding and the Issuing Trusts have not prepared, used or referred to, and will not, without the prior consent of the applicable Agents, prepare, use or refer to, any free writing prospectus or any other
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marketing materials other than the preliminary prospectus relating to or to be used in connection with any offer or sale of the Notes. No free writing prospectus used in connection with the offering of a series of Notes will conflict with either the Registration Statement or the Base Prospectus.
(v) Independent Registered Public Accounting Firm. The accounting firm which certified the financial statements and any supporting schedules thereto included in the Registration Statement and the Base Prospectus, as amended or supplemented, is an independent registered public accounting firm to the extent required by the 1933 Act and the 1933 Act Regulations.
(vi) Global Funding Financial Statements. The consolidated financial statements of Global Funding, if any, included in any report or filing under the 1934 Act, together with the related schedules and notes present fairly the consolidated financial position of Global Funding at the dates indicated to the extent required under the 1934 Act; such financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved; the supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated therein; the selected financial data and the summary financial information included in the Registration Statement and the Time of Sale Prospectus present fairly the information shown therein.
(vii) No Material Changes. Since the respective dates as of which information is given in the Registration Statement and the Time of Sale Prospectus, except as otherwise stated therein, (1) there has been no event or occurrence that would result in a material adverse effect on the condition (financial or otherwise) of Global Funding or on the power or ability of Global Funding to perform its obligations under this Agreement, the Global Funding Trust Agreement, any Funding Note or the Administrative Services Agreement (the “Global Funding Administration Agreement”), dated June 24, 2002, as amended, restated or modified from time to time, between the Global Funding Delaware Trustee, on behalf of Global Funding, and AMACAR Pacific Corp., as administrator (the “Global Funding Administrator”), or to consummate the transactions to be performed by it as contemplated in the Time of Sale Prospectus (a “Global Funding Material Adverse Effect”) and (2) there have been no transactions entered into by Global Funding, other than those in the ordinary course of business, which are material with respect to Global Funding.
(viii) Authorization of this Agreement, each Funding Agreement, Global Funding Trust Agreement, Global Funding Administration Agreement, the Funding Note Indenture and the Funding Notes. This Agreement, the Global Funding Trust Agreement and Global Funding Administration Agreement have been, and each Funding Note Indenture, Funding Note and relevant Funding Agreement will be, duly authorized, executed and delivered by Global Funding and this Agreement, each relevant Funding Agreement, the Global Funding Trust Agreement, the Global Funding Administration Agreement, the Funding Note Indenture and the Funding Notes will each be a valid and legally binding agreement of Global Funding enforceable against Global Funding in accordance with its terms, as applicable, except as enforcement thereof may be limited by
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bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law), and except further as enforcement thereof may be limited by requirements that a claim with respect to any Funding Note that is payable in a foreign or composite currency (or a foreign or composite currency judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or by governmental authority to limit, delay or prohibit the making of payments outside the United States. The holder of the Funding Notes will be entitled to the benefits of the Funding Note Indenture.
(ix) Absence of Defaults and Conflicts. Global Funding is not in violation of its certificate of trust or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan or credit agreement, note, lease or other agreement or instrument to which Global Funding is a party or by which it may be bound or to which any of the property or assets of Global Funding is subject (the “Global Funding Agreements and Instruments”), except for such violations or defaults that would not result in a Global Funding Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Global Funding Trust Agreement, the Funding Agreement(s), Global Funding Administration Agreement and each Funding Note and any other agreement or instrument entered into or issued or to be entered into or issued by Global Funding in connection with the transactions contemplated by the Time of Sale Prospectus (collectively, the “Global Funding Program Documents”), the consummation of the transactions contemplated in the Time of Sale Prospectus (including the issuance and sale of the Notes by an Issuing Trust and the use of proceeds therefrom as described in the Time of Sale Prospectus) and the compliance by Global Funding with its obligations hereunder and under Global Funding Program Documents, have been duly authorized by all necessary action and do not and will not, whether with or without the giving of notice or the passage of time or both, conflict with or constitute a breach of, or default or event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by Global Funding under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of any Issuing Trust or Global Funding pursuant to, any Global Funding Agreements and Instruments, nor will such action result in any violation of Global Funding’s certificate of trust, the Global Funding Trust Agreement or Global Funding Administration Agreement which may reasonably be expected to result in a Global Funding Material Adverse Effect and Global Funding is not in default in the performance or observance of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over Global Funding or any of its assets, properties or operations, except for such defaults which would not reasonably be expected to result in a Global Funding Material Adverse Effect.
(x) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of Global Funding threatened, against or
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affecting Global Funding which is required to be disclosed in the Registration Statement and the Base Prospectus, as amended or supplemented (other than as stated therein), or which may reasonably be expected to result in a Global Funding Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which Global Funding is a party or of which any of its assets, properties or operations is the subject which are not described in the Registration Statement and the Base Prospectus, as amended or supplemented, including ordinary routine litigation incidental to the business, may not reasonably be expected to result in a Global Funding Material Adverse Effect.
(xi) Possession of Licenses and Permits. Global Funding possesses such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by it; Global Funding is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Global Funding Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not result in a Global Funding Material Adverse Effect. Except as set forth in the Time of Sale Prospectus, Global Funding has not received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Global Funding Material Adverse Effect.
(xii) No Filings, Regulatory Approvals etc. No filing with, or approval, authorization, consent, license, registration, qualification, order or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by Global Funding of Global Funding Program Documents or for the performance by Global Funding of the transactions contemplated in Global Funding Program Documents, except such as have been previously made, obtained or rendered, as applicable.
(xiii) Investment Company Act. Neither Global Funding nor any Issuing Trust is, and upon any sale of Funding Notes and the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Time of Sale Prospectus, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”).
(xiv) Ratings. The Programs are (A) expected to be rated Aa2 by Moody’s Investors Service, Inc. (“Moody’s”) and (B) rated AA by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s”) (Moody’s and Standard & Poor’s are referred to herein as the “Ratings Agencies”), or, in each case, such other rating as to which Global Funding shall have most recently notified the Agents pursuant to Section 4(u) hereof.
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(xv) Notes Listed on any Stock Exchange. If specified in a Pricing Supplement, the Notes described in such Pricing Supplement shall be listed on the securities exchange designated in the Pricing Supplement.
(xvi) Relationship between Global Funding and the Agents. Global Funding acknowledges and agrees that (i) the purchase and sale of the Notes pursuant to this Agreement, including the determination of the offering price of the Notes and any related discounts and commissions, is an arm’s-length commercial transaction between Global Funding, on the one hand, and the several Agents, on the other hand, (ii) in connection with the offerings contemplated hereby and the process leading to such transactions each Agent is and has been acting solely as a principal and is not the agent or fiduciary of Global Funding, or its stockholders, creditors, employees or any other party, (iii) no Agent has assumed or will assume an advisory or fiduciary responsibility in favor of Global Funding with respect to the offerings contemplated hereby or the process leading thereto (irrespective of whether such Agent has advised or is currently advising Global Funding on other matters) and no Agent has any obligation to Global Funding with respect to the offerings contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Global Funding, and (v) the Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offerings contemplated hereby and Global Funding has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
(b) Representations and Warranties of the relevant Issuing Trust. Each Issuing Trust represents and warrants, only as to itself, to each applicable Agent as of the such Issuing Trust’s Trust Effective Time, as of its Applicable Time and as of the date of each delivery of its Notes (whether to each such Agent as principal or through each such Agent as agent) (the date of each such delivery is referred to herein as a “Settlement Date”) (each of the times referenced above is referred to herein as an “Issuing Trust Representation Date”), as follows:
(i) Due Formation and Good Standing of the Issuing Trust. Such Issuing Trust is a statutory trust, duly formed under Delaware law pursuant to the trust agreement between Wilmington Trust Company, as Delaware trustee (the “Relevant Issuing Trust Trustee”) and Global Funding (the “Issuing Trust Agreement”) and the filing of a certificate of trust with the Delaware Secretary of State, which is validly existing and in good standing as a statutory trust under the laws of the State of Delaware.
(ii) No Material Changes. Since the respective dates as of which information is given in the Registration Statement and the Time of Sale Prospectus or the Trust Effective Time, whichever is later, except as otherwise stated therein, (1) there has been no event or occurrence that would result in a material adverse effect on the condition (financial or otherwise) of such Issuing Trust or on the power or ability of such Issuing Trust to perform its obligations under this Agreement, the Issuing Trust Agreement, its Notes, any Funding Agreement, the Indenture or the Issuing Trust Administrative Services Agreement (the “Issuing Trust Administration Agreement”), as amended or modified from time to time, between the Relevant Issuing Trust Trustee, on behalf of such Issuing Trust, and AMACAR Pacific Corp., as administrator (the “Issuing Trust
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Administrator”), or to consummate the transactions to be performed by it as contemplated in the Time of Sale Prospectus (an “Issuing Trust Material Adverse Effect”) and (2) there have been no transactions entered into by such Issuing Trust, other than those in the ordinary course of business, which are material with respect to such Issuing Trust.
(iii) Authorization of this Agreement, the Issuing Trust Agreement, the Issuing Trust Administration Agreement, the Indenture and the Notes. This Agreement, the Issuing Trust Agreement, the Issuing Trust Administration Agreement and the relevant Indenture have been or will be, duly authorized, executed and delivered by such Issuing Trust and each is or will be a valid and legally binding agreement of the Issuing Trust enforceable against the Issuing Trust in accordance with its terms, as applicable, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law), and except further as enforcement thereof may be limited by requirements that a claim with respect to any Notes issued under the Indenture that are payable in a foreign or composite currency (or a foreign or composite currency judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or by governmental authority to limit, delay or prohibit the making of payments outside the United States; the Notes have been duly authorized by such Issuing Trust for offer, sale, issuance and delivery pursuant to this Agreement and, when issued, authenticated and delivered in the manner provided for in the Indenture and delivered against payment of the consideration therefor, will constitute valid and legally binding obligations of such Issuing Trust, enforceable against such Issuing Trust in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law); the Notes will be substantially in a form previously certified to the Agents and contemplated by the Indenture; and each holder of Notes will be entitled to the benefits set forth in the Indenture.
(iv) Absence of Defaults and Conflicts. Such Issuing Trust is not in violation of its certificate of trust or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan or credit agreement, note, lease or other agreement or instrument to which such Issuing Trust is a party or by which it may be bound or to which any of the property or assets of such Issuing Trust is subject (the “Issuing Trust Agreements and Instruments”), except for such violations or defaults that would not result in an Issuing Trust Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Issuing Trust Agreement, the Issuing Trust Administration Agreement, its Notes and the Indenture and any other agreement or instrument entered into or issued or to be entered into or issued by such Issuing Trust in connection with the transactions contemplated by the Time of Sale Prospectus, the consummation of the transactions contemplated in the Time of Sale Prospectus (including the issuance and sale of the Notes by an Issuing Trust and the use of proceeds therefrom as described in the Time of Sale Prospectus)
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(collectively, the “Issuing Trust Program Documents”) and the compliance by such Issuing Trust with its obligations hereunder and under the Issuing Trust Program Documents, have been duly authorized by all necessary action and do not and will not, whether with or without the giving of notice or the passage of time or both, conflict with or constitute a breach of, or default or event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by such Issuing Trust under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of any Issuing Trust or such Issuing Trust pursuant to, any Issuing Trust Agreements and Instruments, nor will such action result in any violation of such Issuing Trust’s certificate of trust, the Issuing Trust Agreement or the Issuing Trust Administration Agreement which may reasonably be expected to result in an Issuing Trust Material Adverse Effect and such Issuing Trust is not in default in the performance or observance of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over such Issuing Trust or any of its assets, properties or operations, except for such defaults which would not reasonably be expected to result in an Issuing Trust Material Adverse Effect.
(v) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of such Issuing Trust threatened, against or affecting such Issuing Trust which is required to be disclosed in the Registration Statement and the Base Prospectus, as amended or supplemented (other than as stated therein), or which may reasonably be expected to result in an Issuing Trust Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which such Issuing Trust is a party or of which any of its assets, properties or operations is the subject which are not described in the Registration Statement and the Time of Sale Prospectus, including ordinary routine litigation incidental to the business, may not reasonably be expected to result in an Issuing Trust Material Adverse Effect.
(vi) Possession of Licenses and Permits. Such Issuing Trust possesses such Governmental Licenses issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by it; such Issuing Trust is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in an Issuing Trust Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not result in an Issuing Trust Material Adverse Effect. Except as otherwise set forth in the Time of Sale Prospectus, such Issuing Trust has not received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in an Issuing Trust Material Adverse Effect.
(vii) No Filings, Regulatory Approvals etc. Other than the filing of the applicable financing statements, if any, no filing with, or approval, authorization,
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consent, license, registration, qualification, order or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by such Issuing Trust of the Issuing Trust Program Documents or for the performance by such Issuing Trust of the transactions contemplated in the Issuing Trust Program Documents, except such as have been previously made, obtained or rendered, as applicable.
(viii) Investment Company Act. Such Issuing Trust is not, and upon any sale of Notes by such Issuing Trust as herein contemplated and the application of the net proceeds therefrom as described in the Time of Sale Prospectus will not be, an “investment company” within the meaning of the 1940 Act.
(ix) Notes Listed on any Stock Exchange. If specified in a Pricing Supplement, such Issuing Trust’s Notes described in such Pricing Supplement shall be listed on the securities exchange designated in the Pricing Supplement.
(c) Additional Certifications. Any certificate signed by any officer of the Global Funding Delaware Trustee, on behalf of Global Funding or any officer of the Delaware Issuing Trustee, on behalf of the applicable Issuing Trust, and delivered to one or more Agents or to counsel for the Agents in connection with an offering of Notes to one or more Agents as principal or through an Agent as agent shall be deemed a representation and warranty by Global Funding or Issuing Trust (as applicable) to such Agent(s) as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent; Other Sales.
(a) Purchases as Principal. Notes purchased from an Issuing Trust by the Agents, individually or in a syndicate, as principal shall be made in accordance with terms agreed upon between such Agent(s), on one hand, and Global Funding and such Issuing Trust, on the other hand, specified in the Terms Agreement. An Agent’s commitment to purchase Notes as principal shall be deemed to have been made on the basis of the representations and warranties of Global Funding and Issuing Trust herein contained and shall be subject to the terms and conditions herein set forth. Unless the context otherwise requires, references herein to “this Agreement” shall include the applicable Terms Agreement Each purchase of Notes by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Purchasing Agent, unless otherwise agreed, shall be at a discount from the principal amount of each such Note equivalent to the applicable commission set forth in Schedule 2 hereto. Any other purchase of Notes, unless otherwise agreed, shall be at a discount from the principal amount of each such Note equivalent to the applicable commission set forth in Schedule 3 hereto. The Agents may engage the services of any broker or dealer in connection with the resale of the Notes purchased by them as principal and may allow all or any portion of the discount received by them in connection with such purchases to any broker or dealer.
If Global Funding and an Issuing Trust, on one hand, and two or more Agents, on the other hand, enter into a Terms Agreement pursuant to which such Agents agree to purchase Notes from such Issuing Trust as principal and one or more of such Agents shall fail at the
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Settlement Date to purchase the Notes which it or they are obligated to purchase (the “Defaulted Notes”), then the nondefaulting Agents shall have the right, within 24 hours thereafter, to make arrangements for one of them or one or more other Agents or underwriters to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if such arrangements shall not have been completed within such 24-hour period, then:
(i) if the aggregate principal amount of Defaulted Notes does not exceed 10% of the aggregate principal amount of Notes to be so purchased by all of such Agents on the Settlement Date, the nondefaulting Agents shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective initial underwriting obligations bear to the underwriting obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes exceeds 10% of the aggregate principal amount of Notes to be so purchased by all of such Agents on the Settlement Date, such agreement shall terminate without liability on the part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent from liability in respect of its default. In the event of any such default which does not result in a termination of such Terms Agreement, either the nondefaulting Agents, on one hand, or Global Funding and such Issuing Trust, on the other hand, shall have the right to postpone the Settlement Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the Time of Sale Prospectus or the Prospectus or in any other documents or arrangements.
(b) Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, when agreed by an Issuing Trust, on one hand, and an Agent, on the other hand, such Agent, as an agent of the such Issuing Trust, will use its reasonable efforts to solicit offers for the purchase of such Issuing Trust’s Notes upon the terms set forth in the Registration Statement. Unless the context otherwise requires, references herein to “this Agreement” shall include the applicable Terms Agreement. Such Agent is authorized to appoint any sub-agent with respect to solicitations of offers to purchase Notes; provided, however, that any such appointment of a sub-agent shall be subject to the prior consent of the Company and such Issuing Trust. All Notes sold through such Agent as agent will be sold at one hundred percent (100%) of their principal amount unless otherwise agreed upon between the relevant Issuing Trust, on one hand, and such Agent, on the other hand.
An Issuing Trust reserves the right, in its sole discretion, to suspend solicitation of offers for the purchase of Notes through an Agent, as an agent of such Issuing Trust, commencing at any time for any period of time or permanently. As soon as practicable after receipt of instructions from such Issuing Trust, such Agent will suspend solicitation of offers for the purchase of Notes issued through such Issuing Trust until such time as such Issuing Trust has advised such Agent that such solicitation may be resumed.
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Each Issuing Trust agrees to pay Merrill Lynch, Pierce, Fenner & Smith Incorporated, for acting as the Purchasing Agent, as consideration for soliciting offers to purchase its Notes as an agent of such Issuing Trust, a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by such Issuing Trust as a result of any such solicitation made by the Purchasing Agent, as set forth in Schedule 2 hereto.
Each Issuing Trust agrees to pay the Agent, as consideration for soliciting offers to purchase Notes as an agent of such Issuing Trust, a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by such Issuing Trust as a result of any such solicitation made by such Agent, as set forth in Schedule 3 hereto.
(c) Administrative Procedures. The purchase price, interest rate or formula, maturity date and other terms of the Notes shall be agreed upon between Global Funding and the relevant Issuing Trust, on one hand, and the applicable Agent(s), on the other hand, and specified in a Pricing Supplement prepared in connection with each sale of Notes. Except as otherwise specified in the applicable Pricing Supplement, the Notes will be issued in denominations of U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000. Administrative procedures with respect to the issuance and sale of the Notes (the “Administrative Procedures”) shall be agreed upon from time to time among Global Funding, the relevant Issuing Trust, the Agent(s), the relevant Issuing Trust Administrator and the Indenture Trustee. The Agents, Global Funding and each Issuing Trust agree to perform and Global Funding agrees to cause the Company, and the Issuing Trust agrees to cause the Issuing Trust Administrator and the Indenture Trustee to agree to perform, their respective duties and obligations specifically provided to be performed by them in the Administrative Procedures.
(d) Obligations Several. Global Funding and each Issuing Trust acknowledge that the obligations of the Agents under this Agreement are several and not joint.
(e) Other Sales. Subject to the terms and conditions of Sections 1(a), 4(n) and 4(o), Global Funding and each Issuing Trust reserves the right, to be exercised in their sole discretion, to sell Notes of such Issuing Trust, in compliance with all applicable securities laws, to other investors without the assistance of any Agent.
SECTION 4. Covenants of Global Funding.
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Global Funding covenants and agrees with each Agent as follows: |
(a) Notice of Certain Events. Global Funding will notify the Agents immediately, and confirm such notice in writing of (i) the effectiveness of any post-effective amendment to the Registration Statement or the filing of any amendment or supplement to the Time of Sale Prospectus or the Prospectus (other than any amendment or supplement thereto providing solely for the determination of the variable terms of the Notes), (ii) the receipt of any comments from the Commission with respect to the Registration Statement, any preliminary prospectus and the Prospectus, (iii) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Base Prospectus, in each case as amended or supplemented, (iv) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or of any order preventing or suspending the use of
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any preliminary prospectus or Prospectus, or of the initiation of any proceedings for that purpose or (v) the failure of the Notes of any Issuing Trust to be qualified for offer and sale under the securities or blue sky laws of such jurisdiction as the Agents may request pursuant to Section 4(t). With respect to the Registration Statement, any preliminary prospectus and the Prospectus, Global Funding will make every reasonable effort to prevent the issuance of any stop order (or any similar order under blue sky laws) and, if any stop order (or any similar order under blue sky laws) is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing or Use of Amendments. Global Funding will give each Agent advance notice of its intention to file or prepare any additional registration statement with respect to the registration of additional Notes, any amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus, or to the Prospectus (other than an amendment or supplement thereto providing solely for the determination of the variable terms of the Notes), whether pursuant to the 1933 Act, the 1934 Act or otherwise, and will provide immediate notice to each relevant Agent of any intention to prepare an amendment or supplement to the Time of Sale Prospectus and, if applicable to file such amendment or supplement pursuant to the 1933 Act, and will furnish to such Agents copies of any such document a reasonable amount of time prior to such proposed filing or the use of such material, as the case may be, and will not file or use any such document to which an Agent or counsel for the Agents shall object.
(c) Revisions of Registration Statement. If at any time during the term of this Agreement any event shall occur or condition shall exist as a result of which it is necessary, in the reasonable opinion of counsel for the Agents or counsel for Global Funding, to amend the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend the Registration Statement in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, Global Funding shall give immediate notice, confirmed in writing, to the Agents to cease the solicitation of offers for the purchase of Notes and to cease sales of any Notes they may then own, and Global Funding will promptly prepare and file with the Commission, subject to Section 4(b) hereof, such amendment as may be necessary to correct such statement or omission or to make the Registration Statement comply with such requirements, and Global Funding will furnish to the Agents, without charge, such number of copies of such amendment as the Agents may reasonably request.
(d) Use of Free Writing Prospectuses. Global Funding and the Issuing Trusts will not take any action that would result in an Agent being required to file with the Commission pursuant to Rule 433(d) of the 1933 Act Regulations a free writing prospectus prepared by or on behalf of an Agent that such Agent otherwise would not have been required to file thereunder.
(e) Revisions of Time of Sale Prospectuses. If the Time of Sale Prospectus is being used to solicit offers to buy any Notes of a series at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition shall exist as a result of which it is necessary, in the reasonable opinion of counsel for the applicable Agent(s) or counsel for Global Funding, to amend or supplement the Time of Sale Prospectus in writing in order that the Time of Sale Prospectus will not include an untrue statement of a material fact or
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omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time the Time of Sale Prospectus is conveyed to a prospective purchaser, or if, in the reasonable opinion of either such counsel, it is necessary to amend or supplement the Time of Sale Prospectus to comply with the 1933 Act or 1933 Act Regulations, Global Funding shall give notice, confirmed in writing, to each of the applicable Agents and Global Funding will promptly prepare and, if applicable, file with the Commission such amendment or supplement as may be necessary to correct such statement or omission or to make the Time of Sale Prospectus comply with such requirements, and Global Funding will furnish to each of the applicable Agents, without charge, such number of copies of such amendment or supplement, as the relevant Agents may reasonably require.
(f) Revisions of Prospectus. If at any time when, in the reasonable opinion of counsel to the Agents or counsel to the Company, the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the 1933 Act Regulations) is required to be delivered, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Agents or counsel for Global Funding, to amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time the Prospectus or in lieu thereof, the notice referred to in Rule 173(a) of the 1933 Act Regulations, is delivered to a purchaser, or if it shall be necessary, in the opinion of any such counsel, to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, as applicable, Global Funding shall give immediate notice, confirmed in writing, to the Agents to cease the solicitation of offers for the purchase of Notes in their capacity as agent and to cease sales of any Notes they may then own as principal, and Global Funding will promptly prepare and file with the Commission, subject to Section 4(b) hereof, such amendment or supplement as may be necessary to correct such statement or omission or to make the Prospectus comply with such requirements, and Global Funding will furnish to the Agents, without charge, such number of copies of such amendment or supplement as the Agents may reasonably request. In addition, Global Funding will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of each offering of Notes.
(g) Delivery of the Registration Statement. Global Funding will furnish to the Agents and to counsel for the Agents, without charge, signed and conformed copies of the Registration Statement and conformed copies of all consents and certificates of experts. The Registration Statement furnished to an Agent will be identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(h) Delivery of the Preliminary Prospectus and Time of Sale Prospectus. Global Funding will deliver to each applicable Agent, without charge, as many copies of each preliminary prospectus as such Agent may reasonably request, and Global Funding hereby consents to the use of such copies for purposes permitted by the 1933 Act. Global Funding will furnish to each applicable Agent, without charge, such number of copies of the applicable Time of Sale Prospectus (as amended or supplemented) as such Agent may reasonably request. Each such document furnished to the applicable Agents will be identical to any electronically
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transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(i) Delivery of Free Writing Prospectuses. Global Funding will deliver to each applicable Agent and, without charge, as many copies of each free writing prospectus, prepared by or on behalf of, used by, or referred to by Global Funding. To the extent applicable, each such document furnished to the Agents will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(j) Delivery of the Prospectus. Global Funding will deliver to each applicable Agent, without charge, as many copies of the Base Prospectus (as amended or supplemented) as such Agent may reasonably request, and Global Funding hereby consents to the use of such copies for purposes permitted by the 1933 Act. It is hereby acknowledged that Global Funding intends to rely on the provisions of Rule 172 of the 1933 Act Regulations with respect to the delivery of the Prospectus. The Prospectus and any amendments or supplements thereto furnished to such Agent will be identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(k) Preparation of Pricing Supplements. Global Funding will prepare, with respect to any Notes to be sold pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a form previously approved by the Agents. Global Funding will deliver such Pricing Supplement no later than 11:00 a.m., New York City time, on the business day following the Applicable Time for the relevant Issuing Trust and will file such Pricing Supplement pursuant to Rule 424(b) under the 1933 Act Regulations.
(l) Reporting Requirements. Global Funding will file, or cause to be filed, all documents required to be filed on its behalf or on behalf of the Issuing Trusts with the Commission pursuant to the 1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(m) Restrictions on the Offer and Sale of Securities to Institutional Purchasers. Unless otherwise agreed upon between one or more Agents, on one hand, and the Company and Global Funding, on the other hand, from the date of the agreement by such Agent(s) to purchase Notes from an Issuing Trust to and including the Settlement Date with respect thereto, Global Funding will not, and will cause all Issuing Trusts not to, without the prior written consent of such Agent(s), issue, sell, offer or contract to sell, grant any option for the sale of, or otherwise dispose of, any substantially similar debt securities of each such Issuing Trust to the same potential institutional investors (other than Notes to be offered and/or sold to or through such Agent(s)).
(n) Restrictions on the Offer and Sale of Securities to Retail Purchasers. Unless otherwise agreed upon between the Purchasing Agent, on the one hand, and the Company and Global Funding, on the other hand, from the date the retail pricing levels are posted out to the selling group members through and including the applicable Settlement Date with respect thereto, Global Funding will not, and will cause all Issuing Trusts not to, without the prior written consent of the Purchasing Agent, issue, sell, offer or contract to sell, grant any option for
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the sale of, or otherwise dispose of, any substantially similar debt securities of each such Issuing Trust to the same potential retail investors (other than Notes to be offered and/or sold to or through the Purchasing Agent).
(o) Use of Proceeds. Global Funding shall cause each Issuing Trust to use the net proceeds received by it from the issuance and sale of the Notes in the manner specified in the Time of Sale Prospectus.
(p) Listing. Global Funding shall use reasonable efforts to obtain and maintain approval for the listing of at least one series of Notes of an Issuing Trust on a national securities exchange as defined in Section 18(a)(3)(B) of the 1933 Act as long as Notes of any Issuing Trust are outstanding.
(q) Outstanding Aggregate Principal Amount of Notes. Global Funding will promptly, upon request by an Agent notify such Agent of the aggregate principal amount of Notes from time to time outstanding under the Programs in their currency of denomination and (if so requested) expressed in United States dollars. For the purpose of determining the aggregate principal amount of Notes outstanding (i) the principal amount of Notes, denominated in a currency other than United States dollars shall be converted into United States dollars using the spot rate of exchange for the purchase of the relevant currency against payment of United States dollars being quoted by the Paying Agent or Calculation Agent, as applicable (each as defined in the Indenture), on the date on which the relevant Notes were initially offered, (ii) any Notes which provide for an amount less than the principal amount thereof to be due and payable upon redemption following an Event of Default as defined in the Indenture in respect of such Notes, shall have a principal amount equal to their redemption amount, (iii) any zero coupon (and any other Notes issued at a discount or premium) shall have a principal amount equal to their issue amount and (iv) the currency in which any Notes are payable, if different from the currency of their denomination, shall be disregarded.
(r) Blue Sky Qualifications. Global Funding shall endeavor, and shall cause the applicable Issuing Trust, to qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Agents shall reasonably request and to maintain such qualifications for as long as such Agents shall reasonably request.
(s) Depository Trust Company. Global Funding shall endeavor to assist the Agents in arranging to cause the Notes to be eligible for settlement through the facilities of the Depository Trust Company (“DTC”).
(t) Notice of Amendment to Global Funding Trust Agreement. Global Funding will give the Agents at least three (3) business days’ prior notice in writing of any proposed amendment to the Global Funding Trust Agreement and, except in accordance with the applicable provisions of the Global Funding Trust Agreement, not make or permit to become effective any amendment to Global Funding Trust Agreement which may adversely affect the interests of the Agents or any holder of any outstanding Notes without the consent of the affected party.
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(u) Authorization to Act on Behalf of Global Funding. Global Funding will, from time to time, without request, deliver to the Agents a certificate as to the names and signatures of those persons authorized to act on behalf of Global Funding in relation to the Programs if such information has changed.
(v) Notice of Meeting. Global Funding will furnish to the Agents, at the same time as it is dispatched, a copy of notice of any meeting of the holders of Notes which is called to consider any matter which is material in the context of Global Funding.
(w) Notices Regarding Ratings. Global Funding will notify the Agents immediately, and confirm such notice in writing, of any change in the rating assigned by Moody’s or Standard & Poor’s to the Program or the Notes issued pursuant to the Registration Statement as applicable.
SECTION 5. Covenants of the Issuing Trusts.
Each Issuing Trust, only with respect to itself, covenants and agrees with each Agent as follows:
(a) Use of Proceeds. Such Issuing Trust shall use the net proceeds received by it from the issuance and sale of the Notes in the manner specified in the Time of Sale Prospectus.
(b) Blue Sky Qualifications. Such Issuing Trust shall endeavor to qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Agents shall reasonably request and to maintain such qualifications for as long as such Agents shall reasonably request.
(c) Depository Trust Company. Such Issuing Trust shall endeavor to assist the Agents in arranging to cause the Notes to be eligible for settlement through the facilities of DTC.
(d) Notice of Amendment to Indenture and Issuing Trust Agreement. Such Issuing Trust will give the Agents at least three (3) business days’ prior notice in writing of any proposed amendment to the relevant Indenture and relevant Issuing Trust Agreement and, except in accordance with the applicable provisions of the relevant Indenture and relevant Issuing Trust Agreement, not make or permit to become effective any amendment to such Indenture or such Issuing Trust Agreement which may adversely affect the interests of the Agents or any holder of any outstanding Notes without the consent of the affected party.
(e) Authorization to Act on Behalf of the Issuing Trust. Such Issuing Trust will, from time to time, without request, deliver to the Agents a certificate as to the names and signatures of those persons authorized to act on behalf of such Issuing Trust in relation to the Programs if such information has changed.
(f) Notice of Meeting. Such Issuing Trust will furnish to the Agents, at the same time as it is dispatched, a copy of notice of any meeting of the holders of Notes which is called to consider any matter which is material in the context of such Issuing Trust.
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SECTION 6. Covenants of the Agents. Each Agent covenants with Global Funding:
(a) Delivery of Free Writing Prospectuses and Other Marketing Materials. Except as otherwise provided in the applicable Terms Agreement, such Agent will, prior to its first use, furnish Global Funding with a copy of each proposed free writing prospectus that is required to be filed pursuant to Rule 433(d) under the 1933 Act Regulations or is or will be part of the Time of Sale Prospectus and any other marketing materials (other than (x) any free writing prospectus that is not required to be filed or will not be part of the Time of Sale Prospectus or (y) any marketing material that complies with Rule 134 of the 1933 Act Regulations) relating to or to be used in connection with any offer or sale of the Notes, in each case prepared by or on behalf of such Agent and will not use any such free writing prospectus or other marketing materials to which Global Funding reasonably objects.
(b) Use of Free Writing Prospectuses and Other Marketing Materials. Such Agent may use a free writing prospectus or any other marketing materials prepared by or on behalf of such Agent, only if such free writing prospectus or such marketing materials complies in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(c) Distribution of Free Writing Prospectuses and Other Marketing Materials. Such Agent will not distribute any free writing prospectus or any other marketing materials (other than any marketing material that complies with Rule 134 of the 1933 Act Regulations) used or referred to by such Agent in a manner reasonably designed to lead to its broad unrestricted dissemination; provided that this covenant shall not apply to any free writing prospectus or such marketing materials forming part of the Time of Sale Prospectus or any free writing prospectus or such marketing materials prepared or approved by Global Funding for broad unrestricted dissemination.
SECTION 7. Conditions of Agent’s Obligations.
The obligations of one or more Agents to purchase Notes from an Issuing Trust as principal, the obligations of an Agent to solicit offers for the purchase of Notes as an agent of an Issuing Trust and the obligations of any purchasers of Notes sold through an Agent as an agent of an Issuing Trust, will be subject to the accuracy of the representations and warranties on the part of Global Funding and such Issuing Trust herein contained, and the accuracy of the representations and warranties on the part of the Company contained in the Representations and Indemnity Agreement entered into, as of even date herewith, by and among the Company and the Agents, as amended, restated or modified from time to time (the “Representations and Indemnity Agreement”) or contained in any certificate of an officer or trustee of Global Funding, Issuing Trust or the Company delivered pursuant to the provisions hereof and thereof, as applicable, to the performance and observance by Global Funding and such Issuing Trust of its covenants and other obligations hereunder or the performance and observance by the Company of its covenants and other obligations under the Representations and Indemnity Agreement, and to the following additional conditions precedent:
(a) Effectiveness of the Registration Statement. The Registration Statement has become effective under the 1933 Act and the 1934 Act, as applicable, and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933
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Act or the 1934 Act, as applicable, and no proceedings for that purpose shall have been instituted or shall be pending or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Agents.
(b) Legal Opinions, Memoranda and Negative Assurance Letters. On the date hereof (or in the case of the negative assurance and opinion letters specified in clauses (ii), (viii) and (xi) below, prior to the Applicable Time for the first issuance of Notes following the date of this Agreement), the Agents shall have received the following legal opinions, memoranda and negative assurance letters dated as of the date hereof (or in the case of the negative assurance and opinion letters specified in clauses (ii), (viii) and (xi) below, as of the date of such negative assurance letter or opinion letter, as the case may be) and in form and substance satisfactory to the Agent:
(i) Opinion of Internal Counsel for the Company. The opinion of internal Counsel for the Company, to the effect set forth in Exhibit A hereto and to such further effect as the Agents may reasonably request;
(ii) Negative Assurance Letter of Company’s Internal Counsel or Other Legal Counsel for the Company. The negative assurance letter of the General Counsel of the Company or other legal counsel selected by the Company and reasonably satisfactory to the Agents to the effect set forth in Exhibit B hereto and to such further effect as the Agents may reasonably request;
(iii) Opinion of Counsel for the Company Concerning Certain Insolvency, Funding Agreement Authority and Funding Agreement Enforceability Matters. The opinion of Lord, Bissell & Brook or other legal counsel selected by the Company and reasonably satisfactory to the Agents to the effect set forth in Exhibit C hereto and to such further effect as the Agents may reasonably request;
(iv) Opinion of Counsel for the Company Concerning Certain Illinois Security Interest Matters. The opinion of Lord, Bissell & Brook, counsel for the Company, to the effect set forth in Exhibit D hereto and to such further effect as the Agents may reasonably request;
(v) Opinion of Counsel for the Company Concerning Certain Federal Securities and New York Matters. The opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P. or other legal counsel selected by the Company and reasonably satisfactory to the Agents (“Company Counsel”) to the effect set forth in Exhibit E hereto and to such further effect as the Agents may reasonably request;
(vi) Opinion of Counsel for the Company Concerning Certain Tax Matters. The opinion of Company Counsel to the effect set forth in Exhibit F hereto and to such further effect as the Agents may reasonably request;
(vii) Memorandum of Counsel for the Company Concerning Certain Insurance Matters. The memorandum of Company Counsel to the effect set forth in Exhibit G hereto and to such further effect as the Agents may reasonably request;
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(viii) Negative Assurance Letter of Counsel for the Agents. The negative assurance letter of Sidley Austin LLP or other legal counsel selected by the Agents and reasonably satisfactory to Global Funding and the Company, with respect to the matters set forth in Exhibit H hereto;
(ix) Opinion of Counsel for the Global Funding Delaware Trustee and the Relevant Issuing Trust Trustee. The opinion of Richards, Layton & Finger, counsel for the Global Funding Delaware Trustee, to the effect set forth in Exhibit I hereto and to such further effect as the Agents may reasonably request;
(x) Opinion of Counsel for Global Funding Administrator and Issuing Trust Administrator. The opinion of counsel for Global Funding Administrator, to the effect set forth in Exhibit J hereto and to such further effect as the Agents may reasonably request;
(xi) Opinion of Counsel for the Indenture Trustee. The opinion of counsel for the Indenture Trustee to the effect set forth in Exhibit K hereto and to such further effect as the Agents may reasonably request;
(xii) Opinion of Counsel for Global Funding and relevant Issuing Trust Concerning Certain Delaware Security Interest Matters. The opinion of Richards, Layton & Finger or other legal counsel selected by the Global Funding Delaware Trustee and reasonably satisfactory to the Agents, to the effect set forth in Exhibit L hereto and to such further effect as the Agents may reasonably request;
(xiii) Opinion of Counsel for Global Funding. The opinion of Richards, Layton & Finger or other legal counsel selected by the Global Funding Delaware Trustee and reasonably satisfactory to the Agents, to the effect set forth in Exhibit M hereto and to such further effect as the Agents may reasonably request; and
(xiv) Opinion of Counsel for the relevant Issuing Trust. The opinion of Richards, Layton & Finger or other legal counsel selected by the Global Funding Delaware Trustee and reasonably satisfactory to the Agents, to the effect set forth in Exhibit N hereto and to such further effect as the Agents may reasonably request.
Unless otherwise agreed among the relevant Issuing Trust and the Agents, each of the opinions set forth in Section 7(b) above, except for the letter set forth in Section 7(b)(viii) above, will be delivered as of each June 30th, commencing June 30, 2008 (each, an “Annual Delivery Requirement”), modified as necessary to relate to such time of delivery; provided, however, that the delivery of each opinion letter or memorandum as required by this Section 7(b) due to each Annual Delivery Requirement shall only be required to be delivered to each Agent prior to the pricing date for such Issuing Trust’s Notes issued immediately after each such Annual Delivery Requirement.
(c) Global Funding Certificate. Global Funding shall have furnished to the Agents a certificate of Global Funding, signed by Global Funding Administrator of Global Funding, dated the date of such certificate, to the effect that:
(i) the representations and warranties of Global Funding and, if applicable, the relevant Issuing Trust in this Agreement are true and correct on and as of the date of
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such certificate with the same effect as if made on the date hereof and Global Funding and, if applicable, relevant Issuing Trust have complied with all agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date of such certificate;
(ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to Global Funding’s knowledge, threatened; and
(iii) since the date of the Prospectus there has occurred no event required to be set forth in an amendment or supplement to the Registration Statement or Prospectus, and there has been no document required to be filed under the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations which, upon filing, would be deemed to be incorporated by reference in the Prospectus which has not been so filed.
(d) Company Officer’s Certificate. The Company shall have furnished to the Agents a certificate of the Company, signed by either the Chairman of the Board, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Secretary, General Counsel or Treasurer of the Company, dated the date of such certificate, to the effect set forth in Section 4(c) of the Representations and Indemnity Agreement.
(e) Comfort Letter of Accountants to the Company. Prior to the first issuance of Notes under the Program, the Agents shall have received a letter from Deloitte & Touche LLP or its successor, as the independent registered public accounting firm to the Company (the “Accountants”), , and in form and substance satisfactory to the Agent, to the effect set forth in Exhibit O hereto.
(f) Additional Documents. On the date hereof, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and Global Funding in connection with the issuance and sale of the Notes as herein contemplated shall be satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the applicable Agent(s) by notice to Global Funding or relevant Issuing Trust at any time and any such termination shall be without liability of any party to any other party except as provided in Section 12 hereof and except that Sections 10, 11, 13, 16 and 17 hereof shall survive any such termination and remain in full force and effect.
SECTION 8. Delivery of and Payment for Notes Sold through an Agent as Agent.
Delivery of Notes sold through an Agent as an agent of an Issuing Trust shall be made by the Issuing Trust to such Agent for the account of any purchaser only against payment therefor in immediately available funds. In the event that a purchaser shall fail either to accept delivery of or
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to make payment for a Note on the date fixed for settlement, such Agent shall promptly notify such Issuing Trust and deliver such Note to such Issuing Trust and, if such Agent has theretofore paid such Issuing Trust for such Note, such Issuing Trust will promptly return such funds to such Agent. If such failure has occurred for any reason other than default by such Agent in the performance of its obligations hereunder, such Issuing Trust will reimburse such Agent on an equitable basis for its loss of the use of the funds for the period such funds were credited to such Issuing Trust’s account.
SECTION 9. Additional Covenants of Global Funding and Issuing Trust.
Global Funding and each Issuing Trust (only with respect to itself) further covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by an Issuing Trust of an offer for the purchase of Notes (whether to one or more Agents as principal or through one or more Agents as agent), and each delivery of Notes (whether to one or more Agents as principal or through an Agent as agent) shall be deemed to be an affirmation that the representations and warranties of Global Funding and such Issuing Trust contained in any certificate theretofore delivered to such Agent pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to such Agent(s) or to the purchaser or its agent, as the case may be, of the Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (it being understood that such representations and warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. At (i) each time that the Registration Statement or Base Prospectus shall be amended or supplemented (other than by (A) an amendment or supplement providing solely for the determination of the variable terms of the Notes and (B) an amendment deemed to have occurred as a result of a periodic filing by the Company, Global Funding or any Issuing Trust under the 1934 Act or the 1934 Act Regulations, except any quarterly report of the Company on Form 10-Q or any annual report of the Company on Form 10-K (any such report, an “SEC Periodic Report”)), and (ii) each Settlement Date, Global Funding shall, and agrees to cause the Company to, furnish or cause to be furnished to the Agents, forthwith a certificate dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form satisfactory to the Agents to the effect that the statements contained in the certificate referred to in Sections 7(c) and 7(d) hereof which were last furnished to the Agents are true and correct at the time of the filing or effectiveness of such amendment or supplement, as applicable, or the time of such sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Sections 7(c) and 7(d) hereof, modified as necessary to relate to the Registration Statement as amended and supplemented to the time of delivery of such certificate (it being understood that, in the case of clause (ii) above, any such certificate shall also include a certification that there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its
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subsidiaries considered as one enterprise or of Global Funding or any Issuing Trust since the date of the agreement by such Agent to purchase Notes from such Issuing Trust as principal); provided, however, that any delivery of certificates as required by this Section 9(b) due to the filing of an SEC Periodic Report shall only be required to be delivered prior to the pricing date for such Issuing Trust’s Notes issued immediately after such SEC Periodic Report.
(c) Subsequent Delivery of Legal Opinions. As agreed to from time to time by the Agents and Global Funding, Global Funding shall furnish or cause to be furnished to the Agents legal opinions of internal counsel for the Company, counsel for the Company, counsel for the Global Funding Delaware Trustee and the Relevant Issuing Trust Trustee, counsel for Global Funding and the relevant Issuing Trust, counsel for the Indenture Trustee and counsel for Global Funding Administrator and the Issuing Trust Administrator, as applicable, dated the date agreed to by the Agents and Global Funding, in form and substance reasonably satisfactory to the Agents, of substantially the same tenor as the legal opinions referred to in Section 7(b)(i), Section 7(b)(iii), Section 7(b)(iv), Section 7(b)(v), Section 7(b)(vi), Section 7(b)(viii), Section 7(b)(ix), Section 7(b)(x), Section 7(b)(xi), Section 7(b)(xii), Section 7(b)(xiii) and Section 7(b)(xiv) hereof, as applicable, modified as necessary to relate to any report filed by the Company under Section 14 or Section 16(d) of the 1934 Act, to the time of delivery of such legal opinions or, in lieu of such legal opinions, counsel last furnishing such legal opinions to the Agents shall furnish such Agents with a letter substantially to the effect that the Agents may rely on such last legal opinions to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last legal opinions shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Negative Assurance Letter of Internal Counsel or Other Counsel for the Company. Each time that (i) the Registration Statement or Prospectus shall be amended or supplemented (other than by (A) an amendment or supplement providing solely for the determination of the variable terms of the Notes and (B) an amendment deemed to have occurred as a result of a periodic filing by the Company, Global Funding or any Issuing Trust under the 1934 Act or the 1934 Act Regulations, except any SEC Periodic Report), (ii) (if required in connection with the purchase of Notes from an Issuing Trust by one or more Agents as principal) an Issuing Trust sells Notes to one or more Agents as principal or (iii) an Issuing Trust sells Notes in a form not previously certified to the Agents by such Issuing Trust, Global Funding agrees to cause the Company to furnish or cause to be furnished forthwith to the Agents and to counsel to the Agents, a negative assurance letter of the General Counsel of the Company or other legal counsel for the Company selected by the Company and reasonably satisfactory to the Agents dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form and substance satisfactory to the Agent, of the same tenor as the negative assurance letter referred to in Section 7(b)(ii) hereof, but modified, as necessary, to relate to the Registration Statement and the Base Prospectus, as amended and supplemented, to the time of delivery of such negative assurance letter or, in lieu of such negative assurance letter, counsel last furnishing such negative assurance letter to the Agents shall furnish such Agents with a letter substantially to the effect that the Agents may rely on such last negative assurance letter to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last negative assurance letter shall be deemed to relate to the Registration Statement and the Base
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Prospectus, as amended and supplemented, to the time of delivery of such letter authorizing reliance); provided, however, that any negative assurance letter to be delivered pursuant to Section 9(d)(ii) in connection with the proposed issuance of a series of Notes will be further modified, as necessary, to also relate to the applicable Time of Sale Prospectus, and provided, further, that any delivery of a negative assurance letter as required by this Section 9(d) due to the filing of an SEC Periodic Report shall only be required to be delivered prior to the pricing date for an Issuing Trust’s Notes to be issued immediately after such SEC Periodic Report. Global Funding agrees to furnish or cause to be furnished forthwith to the Agents the negative assurance letter of Sidley Austin LLP, counsel to the Agents, or such other counsel reasonably satisfactory to the Agents, dated within ten (10) days of the date of the filing of the Company’s Form 10-K with the Commission, of the same tenor as the opinion referred to in Section 7(b)(viii) hereof, but modified, as necessary, to relate to the Registration Statement and Prospectus as amended and supplemented to the time of delivery of such negative assurance letter; provided, further, that any delivery of a negative assurance letter of Sidley Austin LLP as required by this Section 9(d) due to such filing of the Company’s Form 10-K with the Commission shall only be required to be delivered to each Agent prior to the pricing date for an Issuing Trust’s Notes to be issued immediately after such filing of the Company’s Form 10-K.
(e) Delivery of Legal Opinions or Reliance Letters Upon Issuance of Notes. Unless otherwise agreed to among the Company, Global Funding and the applicable Agent(s), Global Funding shall furnish or cause to be furnished to the applicable Agent(s) in connection with each issuance of Notes by an Issuing Trust (i) an opinion of internal counsel for the Company (or a reliance letter authorizing reliance by such Agent(s) on an opinion of like tenor) as to the validity and enforceability of the Funding Agreement(s) being issued in connection therewith and (ii) an opinion of counsel for the Company (or a reliance letter authorizing reliance by such Agent(s) on an opinion of like tenor) as to the validity and enforceability of the Funding Notes of Global Funding and of the Notes of the relevant Issuing Trust, in each case, dated the date of such issuance, and in form and substance reasonably satisfactory to the Agents.
(f) Subsequent Delivery of Comfort Letters. Each time that (i) the Registration Statement or the Base Prospectus shall be amended or supplemented to include additional financial information (other than by an amendment deemed to have occurred as a result of a periodic filing by the Company, Global Funding or any Issuing Trust under the 1934 Act or the 1934 Act Regulations, except any SEC Periodic Report) or (ii) (if required in connection with the purchase of Notes from an Issuing Trust by one or more Agents as principal) an Issuing Trust sells Notes to one or more Agents as principal, such Issuing Trust agrees to cause the Company to cause the Accountants forthwith to furnish to the Agents a letter, dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form satisfactory to the Agents, of the same tenor as the letter referred to in Section 7(e) hereof but modified to relate to the Registration Statement and Prospectus as amended and supplemented to the date of such letter; provided, however, that any comfort letter to be delivered pursuant to Section 9(f)(ii) in connection with the proposed issuance of a series of Notes will be further modified, if applicable, to also relate to the applicable Time of Sale Prospectus, and provided, further, that any delivery of any letter as required by this Section 9(f) due to the filing of an SEC Periodic Report shall only be required to be delivered prior to the pricing date for an Issuing Trust’s Notes issued immediately after such SEC Periodic Report.
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SECTION 10. Indemnification.
(a) Indemnification of the Agent. With respect to any series of Notes, Global Funding and the relevant Issuing Trust (only as to itself in connection with the issuance of its Notes and without respect to any other Issuing Trust) agree to indemnify and hold harmless each applicable Agent, its directors and officers and each person, if any, who controls such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of an untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to Section 10(d) hereof) any such settlement is effected with the written consent of Global Funding and the relevant Issuing Trust; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by such Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of (i) an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to Global Funding by the applicable Agents concerning such Agents expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto), (ii) any use of the Prospectus by the Agents to sell Notes or solicit offers for the purchase of Notes (x) after such time as Global Funding shall have provided written notice pursuant to Section 4(f) hereunder or the Company shall have provided written notice pursuant to Section 2(f) of the Representations and Indemnity Agreement, to the Agents to cease the sale of Notes and solicitation of offers for the purchase of Notes and (y) before such time as the relevant Issuing Trust shall have advised such Agent as the case may be, that such solicitation may be
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resumed or (iii) a claim for indemnity made under the Representations and Indemnity Agreement, only to the extent such claim has previously been satisfied by the Company pursuant to the terms of the Representations and Indemnity Agreement.
(b) Indemnification of Global Funding and Issuing Trusts. With respect to any series of Notes, each Agent agrees, severally but not jointly, to indemnify and hold harmless Global Funding and each Issuing Trust, their administrator, directors, officers and trustees (if applicable) who signed the Registration Statement and each person, if any, who controls Global Funding and any Issuing Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 10(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to Global Funding by such Agent concerning such Agent expressly for use in the Registration Statement (or any amendment thereto) or Registration Statement Amendment (or any amendment thereto) or such preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 10(a) hereof or Section 5(a) of the Representations and Indemnity Agreement, counsel to the indemnified parties shall be selected by the applicable Agent(s) and, in the case of parties indemnified pursuant to Section 10(b) hereof or Section 5(b) of the Representations and Indemnity Agreement, counsel to the indemnified shall be selected by Global Funding, the relevant Issuing Trust and the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties (collectively with any other indemnifying parties in connection with the Representations and Indemnity Agreement), whether such indemnity is claimed hereunder or under the Representations and Indemnity Agreement, be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party under this Agreement or the Representations and Indemnity Agreement shall, without the prior written consent of the indemnified parties under this Agreement and the Representations and Indemnity Agreement, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 10 or Section 11 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such
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settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested in writing an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 10(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 11. Contribution.
If the indemnification provided for in Section 10 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by Global Funding and the relevant Issuing Trust, on one hand, and the applicable Agent(s), on the other hand, from the offering of the Notes that were the subject of the claim for indemnification or (ii) if the allocation provided by clause (i) 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 Global Funding and the relevant Issuing Trust, on one hand, and the applicable Agent(s), on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by Global Funding and the relevant Issuing Trust, on the one hand, and the applicable Agent(s), on the other hand, in connection with the offering of the Notes that were the subject of the claim for indemnification shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Notes (before deducting expenses) received by the relevant Issuing Trust and the total discount or commission received by the applicable Agent(s), as the case may be, bears to the aggregate initial offering price of such Notes.
The relative fault of Global Funding and the relevant Issuing Trust, on one hand, and the applicable Agent(s), on the other hand, shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by Global Funding and the relevant Issuing Trust, on one hand, or by the applicable Agent(s), on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
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The parties agree that it would not be just and equitable if contribution pursuant to this Section 11 were determined by pro rata allocation (even if the Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 11. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 11 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any applicable untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 11, (i) no Agent shall be required to contribute any amount in excess of the amount by which the total discount or commission received by such Agent in connection with the offering of the Notes that were the subject of the claim for indemnification exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of any applicable untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In addition, in connection with an offering of Notes purchased from an Issuing Trust by two or more Agents as principal, the respective obligations of such Agents to contribute pursuant to this Section 11 are several, and not joint, in proportion to the aggregate principal amount of Notes that each such Agent has agreed to purchase from such Issuing Trust.
For purposes of this Section 11, each director, officer and person, if any, who controls an Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Agent, and each director, officer and trustee (if applicable) of Global Funding and relevant Issuing Trust, and each person, if any, who controls Global Funding and the relevant Issuing Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as Global Funding and relevant Issuing Trust.
SECTION 12. Payment of Expenses.
Global Funding will pay all expenses incident to the performance of the obligations of the Company, Global Funding and the relevant Issuing Trust under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration Statement as originally filed and all amendments thereto and any preliminary prospectus, free writing prospectus, Time of Sale Prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of Global Funding Program Documents and the Issuing Trust Program Documents;
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32 |
(c) The preparation, issuance and delivery of the Notes, including any fees and expenses relating to the eligibility and issuance of Notes in book-entry form and the cost of obtaining CUSIP or other identification numbers for the Notes;
(d) The fees and disbursements of the Company’s, Global Funding’s and each Issuing Trust’s accountants, counsel and other advisors or agents (including any calculation agent or exchange rate agent) and of the Global Funding Delaware Trustee, Relevant Issuing Trust Trustee, Global Funding Administrator, Issuing Trust Administrator, Indenture Trustee and Funding Note Indenture Trustee and their counsel;
(e) The reasonable fees and disbursements of counsel to the Agents incurred in connection with the maintenance of the Programs and, unless otherwise agreed, incurred from time to time in connection with the transactions contemplated hereby;
(f) The fees charged by the nationally recognized statistical rating organizations for the rating of the Programs and the Notes;
(g) The fees and expenses incurred in connection with any listing of Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and disbursements of counsel to the Agents in connection with, the review, if any, by the National Association of Securities Dealers, Inc. (the “NASD”); and
(i) Any reasonable advertising and other out-of-pocket expenses of the Agents incurred with the approval of the Company, Global Funding and the Issuing Trust.
SECTION 13. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, in certificates of the officers of Global Funding Administrator, the Issuing Trust Administrator, the Global Funding Delaware Trustee and the Relevant Issuing Trust Trustee submitted pursuant hereto or thereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agents or any controlling person of the Agents, or by or on behalf of the Company, Global Funding or the Issuing Trust, and shall survive each delivery of and payment for the Notes.
SECTION 14. Termination.
(a) Termination of this Agreement. This Agreement (excluding any agreement by one or more Agents to purchase Notes from an Issuing Trust as principal) may be terminated for any reason, at any time by (i) Global Funding as to all the Agents or one or more but less than all the Agents, or (ii) an Agent as to itself, upon the giving of thirty (30) days’ prior written notice of such termination to the other parties hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The applicable Agent(s) may terminate any agreement by such Agent(s) to purchase Notes from an Issuing Trust as principal, immediately upon notice to such Issuing Trust, at any time on or prior to the
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33 |
Settlement Date relating thereto, if (i) there has been, since the date of such agreement or since the respective dates as of which information is given in the Time of Sale Prospectus (exclusive of any supplement thereto), any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, or of Global Funding or such Issuing Trust, whether or not arising in the ordinary course of business, or (ii) there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development or event involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of such Agent(s), impracticable or inadvisable to market such Notes or enforce contracts for the sale of such Notes, (iii) trading in any securities of The Allstate Corporation, a publicly owned holding company incorporated under the laws of the State of Delaware (the “Corporation”), Allstate Insurance Company, a stock property-liability insurance company incorporated under the laws of the State of Illinois (“AIC”), the Company, Global Funding or such Issuing Trust has been suspended or materially limited by the Commission or a national securities exchange, or if trading generally on the New York Stock Exchange or the American Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by either of said exchanges or by such system or by order of the Commission, the NASD or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iv) a banking moratorium has been declared by either Federal or New York authorities or by the relevant authorities in the country or countries of origin of any foreign or composite currency in which such Notes are denominated or payable or (v) the rating assigned by any nationally recognized statistical rating organization to the Programs or any other debt securities (including the Notes) of any Issuing Trust or the financial strength of the Company as of the date of such agreement shall have been lowered or withdrawn since that date or if any such rating organization shall have publicly announced that it has under surveillance or review its rating, with possible negative implications, of the Programs or any such debt securities (including the Notes) of any Issuing Trust or the financial strength of the Company.
(c) General. In the event of any such termination, neither party will have any liability to the other party hereto, except that (i) the Agent(s) shall be entitled to any commissions earned in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own any Notes purchased by it from an Issuing Trust as principal or (b) an offer to purchase any of the Notes has been accepted by an Issuing Trust but the time of delivery to the purchaser or his agent of such Notes relating thereto has not occurred, the covenants set forth in Sections 4, 5 and 9 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, and (iii) the provisions of Section 12 hereof, the indemnity and contribution agreements set forth in Sections 10 and 11 hereof, and the provisions of Sections 13, 16 and 17 hereof shall remain in effect.
SECTION 15. Notices.
Unless otherwise provided herein, all notices required under the terms and provisions hereof shall be in writing, either delivered by hand, by mail or by telex, telecopier or telegram, and any such notice shall be effective when received at the address specified below.
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If to Global Funding or any Issuing Trust:
Allstate Life Global Funding
c/o AMACAR Pacific Corp.
6525 Morrison Boulevard
Suite 318
Charlotte, NC 28211
Attention: President
Telecopy No.: (704) 365-1632
With a copy to the Company at the address set forth below.
If to the Agents:
To each Agent at the address specified in Schedule 1.
With a copy to the Company at the address set forth below.
Address of the Company:
Allstate Life Insurance Company
3100 Sanders Road
Northbrook, IL 60062
Attention: Assistant Vice President, Institutional Markets
Telecopy No.: (847) 326-5048
or at such other address as such party or the Company may designate from time to time by notice duly given in accordance with the terms of this Section 15.
SECTION 16. Parties.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Sections 10 and 11 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors, and said controlling persons, officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase.
SECTION 17. GOVERNING LAW; FORUM.
PURSUANT TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE TRUST AGAINST ANY AGENT IN CONNECTION WITH OR ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK.
SECTION 18. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 19. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument.
SECTION 20. Amendments.
(a) This Agreement may be amended or supplemented if, but only if, such amendment or supplement is in writing and is signed by Global Funding and the Agents. Global Funding and any Issuing Trust may from time to time nominate any institution as a new Agent hereunder either in respect of the Programs generally or in relation to a particular Issuing Trust’s Notes only; in which event, upon confirmation by such institution of an initial purchaser accession letter (the “Agent Accession Letter”) in the terms or substantially in the form of Exhibit P, such institution shall become a party hereto, subject as provided below, with all the authority, rights, powers, duties and obligations of an Agent as if originally named as an Agent hereunder; provided further that, in the case of an institution which has become an Agent in relation to a particular Issuing Trust’s Notes, following the issue of the relevant Notes, the relevant new Agent shall have no further authority rights, powers, duties or obligations except such as may have accrued or been incurred prior to, or in connection with, the issue of such Issuing Trust’s Notes. Any Agent that executes a counterpart to this Agreement shall simultaneously execute a counterpart to the Representations and Indemnity Agreement.
(b) The parties hereto acknowledge and agree that a copy of each amendment to this Agreement effected pursuant to this Section 20 shall be provided promptly by Global Funding to the following Ratings Agencies at the following addresses:
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Standard & Poor’s Ratings Services, |
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a division of The McGraw-Hill Companies, Inc. |
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55 Water Street |
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New York, New York 10041 |
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Attention: Capital Markets |
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Facsimile: (212) 438-5215 |
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Moody’s Investors Service, Inc. |
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99 Church Street |
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New York, New York 10007 |
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36 |
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Attention: Moody’s Investors Service Life Insurance Group |
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Facsimile: (212) 553-4805 |
or such other addresses previously furnished in writing to Global Funding by any Rating Agency in the future; provided, however, that any failure by Global Funding to deliver copies of any amendment required to be delivered pursuant to this Section 20 shall not constitute a breach of or an event of default under this Agreement. The term “Rating Agency”, for purposes of this Section 20, means any of Standard & Poor’s, Moody’s or any other “nationally recognized statistical rating organization” (as such term is defined in Rule 436(g)(2) of the 1933 Act Regulations).
SECTION 21. Separate Nature of Each Issuing Trust.
The Agents agree and acknowledge that, as a separate and distinct special purpose statutory trusts, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Issuing Trust, including such Issuing Trust’s obligations under this Agreement and the applicable Terms Agreement, will be enforceable only against such Issuing Trust and not against any other Issuing Trust.
SECTION 22. Stabilization.
The Agent(s) may, to the extent permitted by applicable laws, over-allot and effect transactions in any over-the-counter market or otherwise in connection with the distribution of the Notes with a view to supporting the market price of Notes at levels higher than those that might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. In such circumstances, as between an Issuing Trust, on one hand, and one or more Agents, on the other hand, such Agent(s) shall act as principal, and any loss resulting from stabilization shall be borne, and any profit arising therefrom and any sum received by such Agent(s) shall be beneficially retained by such Agent(s), as the case may be, for such Agents’ own account.
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SECTION 23. Liability of Delaware Trustee. It is expressly understood and agreed by the parties that (a) this document is executed and delivered by Wilmington Trust Company, not individually or personally, but solely as Delaware Trustee, in the exercise of the powers and authority conferred and vested in it, pursuant to the Global Funding Trust Agreement and the relevant Issuing Trust Agreements, (b) each of the representations, undertakings and agreements herein made on the part of Global Funding and any Issuing Trust is made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose for binding only Global Funding and the relevant Issuing Trust, as applicable, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under the parties hereto, and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of Global Funding or any Issuing Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by Global Funding or any Issuing Trust under this Agreement or any other related documents.
***SIGNATURE PAGES FOLLOW***
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38 |
If the foregoing is in accordance with the Agents’ understanding of our agreement, please sign and return to Global Funding a counterpart hereof, whereupon this Agreement, along with all counterparts, will become a binding agreement by and between the Agents and Global Funding in accordance with its terms.
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Very truly yours,
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ALLSTATE LIFE GLOBAL FUNDING
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By Wilmington Trust Company, not in its individual capacity but solely as Delaware Trustee | ||
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By: |
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Name: |
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CONFIRMED AND ACCEPTED,
as of the date first above written:
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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | ||
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By: |
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Authorized Signatory |
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A.G. EDWARDS & SONS, INC. | ||
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By: |
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Authorized Signatory |
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BANC OF AMERICA SECURITIES LLC | ||
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By: |
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Authorized Signatory |
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*Signature Page to Distribution Agreement, Part 1 of 4*
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BARCLAYS CAPITAL INC. | ||
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By: |
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Authorized Signatory |
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BEAR, STEARNS & CO. INC. | ||
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By: |
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Authorized Signatory |
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CITIGROUP GLOBAL MARKETS INC. | ||
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By: |
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Authorized Signatory |
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CREDIT SUISSE SECURITIES (USA) LLC | ||
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By: |
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Authorized Signatory |
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DEUTSCHE BANK SECURITIES INC. | ||
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By: |
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Authorized Signatory |
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By: |
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Authorized Signatory |
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*Signature Page to Distribution Agreement, Part 2 of 4*
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GOLDMAN SACHS & CO. | ||
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By: |
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Authorized Signatory |
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GREENWICH CAPITAL MARKETS, INC. | ||
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By: |
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Authorized Signatory |
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J.P. MORGAN SECURITIES INC. | ||
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By: |
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Authorized Signatory |
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LEHMAN BROTHERS INC. | ||
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By: |
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Authorized Signatory |
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MORGAN STANLEY & CO. INCORPORATED | ||
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By: |
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Authorized Signatory |
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UBS SECURITIES LLC | ||
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By: |
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Authorized Signatory |
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By: |
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Authorized Signatory |
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*Signature Page to Distribution Agreement, Part 3 of 4*
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WACHOVIA CAPITAL MARKETS, LLC | ||
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By: |
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Authorized Signatory |
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*Signature Page to Distribution Agreement, Part 4 of 4*
Index of Exhibits and Schedules
Exhibits
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Exhibit A – |
Opinion of Internal Counsel for the Company |
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Exhibit B – |
Negative Assurance Letter of Counsel for the Company |
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Exhibit C – |
Opinion of Counsel for the Company Concerning Certain Insolvency, Funding Agreement Authority and Funding Agreement Enforceability Matters |
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Exhibit D – |
Opinion of Counsel for the Company Concerning Certain Illinois Security Interest Matters |
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Exhibit E – |
Opinion of Counsel for the Company Concerning Certain Federal Securities and New York Matters |
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Exhibit F – |
Opinion of Counsel for the Company Concerning Certain Tax Matters |
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Exhibit G – |
Memorandum of Counsel for the Company Concerning Certain Insurance Matters |
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Exhibit H – |
Negative Assurance Letter of Counsel for the Agents |
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Exhibit I – |
Opinion of Counsel for the Global Funding Delaware Trustee and the Relevant Issuing Trust Trustee |
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Exhibit J – |
Opinion of Counsel for Global Funding Administrator and the Issuing Trust Administrator |
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Exhibit K – |
Opinion of Counsel for the Indenture Trustee |
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Exhibit L – |
Opinion of Counsel for Global Funding and the relevant Issuing Trust Concerning Certain Delaware Security Interest Matters |
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Exhibit M – |
Opinion of Counsel for Global Funding |
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Exhibit N – |
Opinion of Counsel for the relevant Issuing Trust |
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Exhibit O – |
Form of Comfort Letter of Deloitte & Touche LLP, Accountants to the Company |
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Exhibit P – |
Form of Agent Accession Letter |
Schedules
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Schedule 1 – |
List of Agents |
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Schedule 2 – |
Commission/Discount Schedule for Retail Sales |
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Schedule 3 – |
Commission/Discount Schedule for Institutional Sales |
i
Exhibit A – Opinion of Internal Counsel for the Company
[To Be Attached]
A-1
Exhibit B – Negative Assurance Letter of Counsel for the Company
[To Be Attached]
B-1
Exhibit C – Opinion of Counsel for the Company Concerning Certain Insolvency, Funding
Agreement Authority and Funding Agreement Enforceability Matters
[To Be Attached]
C-1
Exhibit D – Opinion of Counsel for the Company Concerning Certain Illinois Security Interest Matters
[To Be Attached]
D-1
Exhibit E – Opinion of Counsel for the Company Concerning Certain Federal Securities and New York Matters
[To Be Attached]
E-1
Exhibit F – Opinion of Counsel for the Company Concerning Certain Tax Matters
[To Be Attached]
F-1
Exhibit G – Memorandum of Counsel for the Company Concerning Certain
Insurance Matters
[To Be Attached]
G-1
Exhibit H – Negative Assurance Letter of Counsel for the Agents
[To Be Attached]
H-1
Exhibit I – Opinion of Counsel for the Global Funding Delaware Trustee and the Relevant Issuing Trust Trustee
[To Be Attached]
I-1
Exhibit J – Opinion of Counsel for Global Funding Administrator and the Issuing
Trust Administrator
[To Be Attached]
J-1
Exhibit K – Opinion of Counsel for the Indenture Trustee
[To Be Attached]
K-1
Exhibit L – Opinion of Counsel for Global Funding and the relevant Issuing Trust Concerning Certain Delaware Security Interest Matters
[To Be Attached]
L-1
Exhibit M – Opinion of Counsel for Global Funding
[To Be Attached]
M-1
Exhibit N – Opinion of Counsel for the relevant Issuing Trust
[To Be Attached]
N-1
Exhibit O – Form of Comfort Letter of Deloitte & Touche LLP,
Accountants to the Company
[To Be Attached]
O-1
Exhibit P – Form of Agent Accession Letter
[Name of new Agent]
[Address]
Ladies and Gentlemen:
We refer to the Distribution Agreement, dated [__________], 2007, entered into in respect of the Secured Medium-Term Note Program (such agreement, as amended, restated or modified from time to time, the “Distribution Agreement”) among ourselves and the Agents from time to time party thereto, and have the pleasure of inviting you to become an Agent [but only in respect of [specify Issuing Trust’s Notes (the “Notes”)]]1 subject to and in accordance with the terms of the Distribution Agreement, a copy of which has been supplied to you by us. In addition, we enclose letters from counsel to [__________] entitling you to rely on the original letters referred to in Section 7(b) to the Distribution Agreement, as such letters may have been amended or supplemented, together with copies of such original, amended or supplemented letters. Please return to us a copy of this letter signed by an authorized signatory whereupon you will become an Agent for the purposes of the Distribution Agreement, with all the authority, rights, powers, duties and obligations of an Agent under the Distribution Agreement [except that, following the issue of the Notes, you shall have no further authority, rights, powers, duties or obligations except such as may have accrued or been incurred prior to, or in connection with, the issue of the Notes].2
This letter is governed by, and shall be construed in accordance with, the laws of the State of New York.
Yours faithfully,
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ALLSTATE LIFE GLOBAL FUNDING | |
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By: |
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Name: Title: |
_________________________
1 Insert where the new Agent is being appointed only in relation to a particular Issuing Trust.
2 Insert where the new Agent is being appointed only in relation to a particular Issuing Trust.
P-1
CONFIRMATION
We hereby accept the appointment as an Agent and accept all of the duties and obligations under, and the terms and conditions of, the Distribution Agreement upon the terms of this letter and affirm all representations, warranties and covenants contained therein as of the applicable date [but only in respect of [specify Issuing Trust’s Notes]].3
We confirm that we are in receipt of all the documents which we have requested and have found them to be satisfactory.
For the purposes of the Distribution Agreement, our communications details are as set out below.
[NEW AGENT]
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By: |
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Name: |
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Date: [__________]
Address: [__________]
Facsimile: [__________]
Attention: [__________]
Copies to:
The Indenture Trustee and the existing Paying Agent
[All existing Agents who have been appointed in respect of the Programs generally]4
_________________________
3 Insert where the new Agent is being appointed only in relation to a particular Issuing Trust.
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4 |
Insert where the incoming Agent is being appointed in respect of the Program generally. |
P-2
Schedule 1
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
New York, NY 10080
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
Saint Louis, MO 63103
Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Barclays Capital Inc.
200 Park Avenue
New York, NY 10166
Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, NY 10174
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, NY 10010
Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, CT 06830
J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
Schedule 1-1
Lehman Brothers Inc.
745 7th Avenue
New York, NY 10019
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
UBS Securities LLC
677 Washington Blvd.
Stamford, CT 06901
Wachovia Capital Markets, LLC
301 South College Street
Charlotte, North Carolina 28288
Schedule 1-2
Schedule 2
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PERCENT OF |
|
MATURITY RANGES |
PRINCIPAL AMOUNT |
|
From 9 months to less than 1.5 years |
.125% |
|
From 1.5 years to less than 2 years |
.200 |
|
From 2 years to less than 3 years |
.400 |
|
From 3 years to less than 4 years |
.625 |
|
From 4 years to less than 5 years |
.750 |
|
From 5 years to less than 6 years |
1.000 |
|
From 6 years to less than 7 years |
1.100 |
|
From 7 years to less than 8 years |
1.200 |
|
From 8 years to less than 9 years |
1.300 |
|
From 9 years to less than 10 years |
1.400 |
|
From 10 years to less than 11 years |
1.500 |
|
From 11 years to less than 12 years |
1.600 |
|
From 12 years to less than 15 years |
1.750 |
|
From 15 years to less than 20 years |
2.000 |
|
From 20 years to 30 years |
2.500 |
Schedule 2-1
Schedule 3
|
|
PERCENT OF |
|
MATURITY RANGES |
PRINCIPAL AMOUNT |
|
From 9 months to less than 2 years |
.150% |
|
From 2 years to less than 3 years |
.200 |
|
From 3 years to less than 4 years |
.250 |
|
From 4 years to less than 5 years |
.300 |
|
From 5 years to less than 7 years |
.350 |
|
From 7 years to less than 10 years |
.400 |
|
From 10 years to less than 12 years |
.450 |
|
From 12 years to less than 15 years |
.475 |
|
From 15 years to less than 20 years |
.500 |
|
From 20 years to 30 years |
.875 |
REPRESENTATIONS AND INDEMNITY AGREEMENT
[__________], 2007
Merrill Lynch, Pierce, Fenner & Smith
|
|
Incorporated |
A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital Inc.
Bear, Stearns & Co. Inc.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Greenwich Capital Markets, Inc.
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
Ladies and Gentlemen:
Allstate Life Insurance Company, an Illinois stock life insurance company (the “Company”), in connection with the Allstate Life Global Funding Secured Medium Term Notes Program (the “Institutional Program”) and the Allstate Life(r) CoreNotes(r) Program (the “Retail Program” and, together with the Institutional Program, the “Programs”), and in consideration of the Distribution Agreement dated [__________], 2007, as amended, restated or modified from time to time (the “Distribution Agreement”), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated and each other institution named on Schedule 1 thereto (each, an “Agent” and, collectively the “Agents”) on the one hand, and Allstate Life Global Funding, a Delaware statutory trust (“Global Funding”) and any Delaware statutory trust formed, and beneficially owned, by Global Funding (each, an “Issuing Trust” and, collectively, the “Issuing Trusts”) that becomes a party to the Distribution Agreement pursuant to the terms thereof and the applicable terms agreement (each, a “Terms Agreement”) set forth in Part E of the series instrument to be executed by each Issuing Trust, Global Funding and the applicable Agent or Agents, among others, confirms its agreement with the Agents with respect to the issue and sale, from time to time by the Issuing Trusts, of notes due between nine months and thirty years from the date of issuance (the “Notes”).
The Notes of each Issuing Trust will be issued pursuant to an indenture, as amended or modified from time to time, which will adopt and incorporate the standard indenture terms (each, an “Indenture” and, collectively, the “Indentures”) between the relevant Issuing Trust and The Bank of New York Trust Company, N.A. (or another entity specified as Indenture Trustee in the applicable Indenture), as indenture trustee (the “Indenture Trustee”). Each Issuing Trust shall
________________________
Allstate Life(r) is a registered service mark of Allstate Insurance Company.
CoreNotes(r) is a registered service mark of Merrill Lynch & Co.
issue only one series of Notes. As of the date of this Agreement, the Issuing Trusts are authorized to issue collectively up to U.S. $[_____________] aggregate initial offering price of Notes (or its equivalent as determined in Section 4(s) of the Distribution Agreement).
Each Issuing Trust will use the proceeds from the sale of its Notes immediately to purchase a funding note (each a “Funding Note”) issued by Global Funding. Each Funding Note will be issued pursuant to a funding note indenture, as amended or modified from time to time, which will adopt and incorporate the standard funding note indenture terms (each, a “Funding Note Indenture”) between Global Funding and The Bank of New York Trust Company, N.A. (or another entity specified as Funding Note Indenture Trustee in the applicable Funding Note Indenture), as the funding note indenture trustee (the “Funding Note Indenture Trustee”). Global Funding will immediately use the net proceeds received from the sale of the applicable Funding Note to purchase a funding agreement (each a “Funding Agreement”) issued by the Company. Global Funding will immediately assign absolutely to, and deposit into the relevant Issuing Trust, the relevant Funding Agreement(s) and the relevant Funding Note will be surrendered. In connection with the sale of its Notes, the Issuing Trust will prepare a Pricing Supplement (the “Pricing Supplement”) including or incorporating by reference a description of the terms of the Notes and the terms of the offering.
Capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to them in the Distribution Agreement.
The Agents include those institutions named from time to time in Schedule 1 to the Distribution Agreement and pursuant to Section 14 of this Agreement. If any institution is appointed as an Agent only with respect to the Notes of a particular Issuing Trust, such institution shall only be an Agent with respect to the Notes of such Issuing Trust.
The Company has registered shares of its common stock with the Securities and Exchange Commission (the “Commission”) pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) on Form 10 under the 1934 Act. Pursuant to Rule 429 of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the “1933 Act Regulations”), the Company and Global Funding have filed with the Commission (i) a registration statement on Form S-3 (No. 333-143541) and pre-effective amendment No. 1 under the Securities Act of 1933, as amended (the “1933 Act”) for the registration of the Funding Agreements, the Funding Notes, and the Notes, and the offering thereof in accordance with Rule 415 of the 1933 Act Regulations; (ii) the related prospectus dated [__________], 2007 covering the Notes offered under the Programs (the “Base Prospectus”); (iii) the prospectus supplement to the Base Prospectus, dated [__________], 2007, covering the Notes offered under the Institutional Program (the “Institutional Prospectus Supplement” and together with the Base Prospectus, the “Institutional Base Prospectus”); and (iv) the prospectus supplement to the Base Prospectus, dated [__________], 2007, covering the Notes offered under the Retail Program (the “Retail Prospectus Supplement” and, together with the Base Prospectus, the “Retail Base Prospectus”). Such registration statement (as so amended, if applicable), is also the first post-effective amendment to registration statement on Form S-3 (No. 333-129157) filed by the Company and Global Funding. The registration statement on Form S-3 (No. 333-143541) (as so amended, if applicable) has been declared effective by the Commission, and the form of Indenture and the form of Funding Note Indenture have been duly qualified
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under the Trust Indenture Act of 1939, as amended (the “1939 Act”), and the Company and Global Funding have filed such post-effective amendments thereto as may be required prior to the acceptance by Global Funding and any Issuing Trust of any offer for the purchase of Notes and each such post-effective amendment has been declared effective by the Commission. Such registration statement on Form S-3 (No. 333-143541), at any relevant time, including the amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or included therein by the 1933 Act Regulations is referred to herein as the “Registration Statement”. If the Company or Global Funding file a registration statement with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the “Rule 462(b) Registration Statement”), then, after such filing, all references to the “Registration Statement” shall also be deemed to include the Rule 462(b) Registration Statement. With respect to the offering of a series of Notes under the Institutional Program, the Institutional Base Prospectus, and with respect to the offering of a series of Notes under the Retail Program, the Retail Base Prospectus, in each case including the Pricing Supplement relating to the offering of such series of Notes, in the form first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations (or in the form first made available to the applicable Agent(s) by the Company and the applicable Issuing Trust to meet requests of purchasers pursuant to Rule 173 under the 1933 Act Regulations), are referred to herein as the “Prospectus.” The term “preliminary prospectus” means any preliminary form of the Prospectus. For all purposes of this Agreement, the term “free writing prospectus” has the meaning set forth in Rule 405 under the 1933 Act Regulations and the term “Time of Sale Prospectus” means (i) with respect to the offer and sale of any series of Notes under the Institutional Program, the Institutional Base Prospectus; (ii) with respect to the offer and sale of any series of Notes under the Retail Program, the Retail Base Prospectus, in each case as amended or supplemented from time to time, together with any other preliminary prospectus relating to the offer and sale of such series of Notes, any Pricing Supplement relating to the offer and sale of such series of Notes filed with the Commission prior to the Applicable Time and each free writing prospectus (including any final term sheet relating to such series of Notes) attached as, or identified in, Exhibit A to the applicable Terms Agreement and any other information identified in Exhibit A to the applicable Terms Agreement; and (iii) under either Program, any electronic road show approved or prepared by the Company and made available by the Company and reviewed by the applicable investor(s) in connection with an offering of Notes that is not required to be filed pursuant to Rule 433(d)(8)(i). All references to the “Registration Statement”, the “Institutional Base Prospectus”, the “Retail Base Prospectus”, any “preliminary prospectus”, the “Time of Sale Prospectus” and the “Prospectus” shall also be deemed to include all amendments and supplements thereto and all documents incorporated by reference therein. All references to the Registration Statement, Time of Sale Prospectus, Prospectus, any preliminary prospectus or free writing prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).
All references in this Agreement to financial statements and schedules and other information which is “disclosed”, “contained”, “included” or “stated” (or other references of like import) in the Registration Statement, Time of Sale Prospectus, Prospectus, any preliminary prospectus or free writing prospectus shall be deemed to include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the Registration Statement, Time of Sale Prospectus, any preliminary prospectus or free writing prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, Time
3
of Sale Prospectus, Institutional Base Prospectus, Retail Base Prospectus, Prospectus, any preliminary prospectus or free writing prospectus shall be deemed to include all documents subsequently filed with the Commission pursuant to the 1934 Act which is incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be part of or included in the Registration Statement, Institutional Base Prospectus, Retail Base Prospectus, Prospectus, any preliminary prospectus or free writing prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date hereof, to the applicable Agent(s) as of the Applicable Time (as defined in the applicable Terms Agreement, for the relevant Issuing Trust, the “Applicable Time”), to the applicable Agent(s) as of the date of each delivery of Notes (whether to such Agent as principal or through such Agent as agent) (the date of each such delivery is referred to herein as a “Settlement Date”), to each Agent as of any time the Time of Sale Prospectus shall be amended or supplemented, and to each Agent as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (each of the times referenced above is referred to herein as a “Representation Date”), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of the Company. The Company is validly existing as a stock life insurance company in good standing under the laws of the State of Illinois with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Time of Sale Prospectus and to enter into this Agreement and consummate the transactions to be performed by the Company as contemplated in the Time of Sale Prospectus; the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to comply with any of the foregoing would not result in a material adverse change in the condition (financial or otherwise) or in the earnings or business affairs of the Company and its subsidiaries considered as one enterprise or on the power or ability of the Company to perform its obligations under the Program Documents (as defined in the applicable Indenture or form of Indenture, as the case may be) to which the Company is a party or to consummate the transactions to be performed by the Company as contemplated in the Time of Sale Prospectus (a “Company Material Adverse Effect”); all of the issued and outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company were issued in violation of preemptive or other similar rights of any securityholder of the Company.
(ii) Due Incorporation, Good Standing and Due Qualification of Significant Subsidiaries. Each significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act) of the Company, if any (each, a “Significant Subsidiary”) is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and conduct its business as described in the Time of Sale Prospectus and is duly qualified as a foreign corporation to transact business and is in
4
good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to comply with any of the foregoing would not result in a Company Material Adverse Effect; all of the issued and outstanding shares of capital stock of each Significant Subsidiary has been duly authorized and is validly issued, fully paid and non-assessable and is 100% owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock of any Significant Subsidiary was issued in violation of preemptive or other similar rights of any securityholder of such Significant Subsidiary.
(iii) Registration Statement Preliminary Prospectuses, Time of Sale Prospectus, and Prospectus; Filing Status. Each of the Company and Global Funding meet the requirements for use of Form S-3 under the 1933 Act; the Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with; the form of Indenture has been duly qualified under the 1939 Act; the form of Funding Note Indenture has been duly qualified under the 1939 Act; at the respective times that each part of the Registration Statement became effective and at each Representation Date, the Registration Statement and any amendments thereto complied and will comply in all material respects with the applicable requirements of the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; each preliminary prospectus and Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act Regulations, complied when so filed in all material respects with the 1933 Act and the 1933 Act Regulations; each preliminary prospectus and the Prospectus delivered to an Agent for use in connection with the offering of Notes are identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T; and at the date hereof, at the date of the Base Prospectus and each amendment or supplement thereto and at each Representation Date, neither the Base Prospectus nor any amendment or supplement thereto included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Time of Sale Prospectus does not, and at the Applicable Time and at the applicable Settlement Date, the Time of Sale Prospectus, as then amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to (i) statements in or omissions from the Registration Statement, the Base Prospectus, the Time of Sale Prospectus or the Prospectus made in reliance upon and in conformity with
5
information furnished to the Company in writing by the applicable Agents concerning such Agents expressly for use in the Registration Statement, the Base Prospectus, the Time of Sale Prospectus or the Prospectus, or (ii) the parts of the Registration Statement which constitute the Statement of Eligibility and Qualification (Form T-1) of the Indenture Trustee under the 1939 Act.
(iv) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Time of Sale Prospectus or the Base Prospectus, as amended or supplemented, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and, when read together with the other information in the Time of Sale Prospectus or the Base Prospectus, at the date hereof, at the date of the Time of Sale Prospectus or the Base Prospectus and at each Representation Date, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(v) Free Writing Prospectuses. At the time of initial filing of the Registration Statement, at the earliest time thereafter that an offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of any Notes and at each the Company Representation Date, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 of the 1933 Act Regulations. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the 1933 Act Regulations has been, or will be, filed with the Commission in accordance with the requirements of the 1933 Act and the 1933 Act Regulations. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the 1933 Act Regulations or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the applicable 1933 Act Regulations. With respect to the offering of any series of Notes, except for the free writing prospectuses attached as, or identified in, Exhibit A to the applicable Terms Agreement, the Company has not prepared, used or referred to, and will not, without the prior consent of the applicable Agents, prepare, use or refer to, any free writing prospectus or any other marketing materials other than the preliminary prospectus relating to or to be used in connection with any offer or sale of the Notes. No free writing prospectus used in connection with the offering of a series of Notes will conflict with either the Registration Statement or the Base Prospectus.
(vi) Independent Registered Public Accounting Firm. The accounting firm which certified the financial statements and any supporting schedules thereto included in the Registration Statement and the Base Prospectus, as amended or supplemented, is an independent registered public accounting firm to the extent required by the 1933 Act and the 1933 Act Regulations.
(vii) Company Financial Statements. The consolidated financial statements of the Company included in the Registration Statement, the Time of Sale Prospectus and the Base Prospectus together with the related schedules and notes, as well as those financial statements, schedules and notes of any entity included in the Registration Statement, the
6
Time of Sale Prospectus and the Base Prospectus present fairly the consolidated financial position of the Company and its subsidiaries, or such other entity, as the case may be, at the dates indicated and the consolidated statement of operations, stockholders’ equity and cash flows of the Company and its subsidiaries, or such other entity, as the case may be, for the periods specified; such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved; the supporting schedules, if any, included in the Registration Statement, the Time of Sale Prospectus and the Base Prospectus present fairly in accordance with GAAP the information required to be stated therein; the selected financial data and the summary financial information included in the Registration Statement, the Time of Sale Prospectus and the Base Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement, the Time of Sale Prospectus and the Base Prospectus; and any pro forma consolidated financial statements of the Company and its subsidiaries and the related notes thereto included in the Registration Statement, the Time of Sale Prospectus and the Base Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
(viii) No Material Changes. Since the respective dates as of which information is given in the Registration Statement and the Time of Sale Prospectus, except as otherwise stated therein, (1) there has been no event or occurrence that would result in a Company Material Adverse Effect and (2) there have been no transactions entered into by the Company or any of its Significant Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise.
(ix) Authorization of this Agreement and each Funding Agreement. This Agreement has been and each Funding Agreement when issued will be duly authorized, executed and delivered by the Company and will be a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (regardless of whether enforcement is considered in a proceeding in equity or at law).
(x) Absence of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is in violation of the provisions of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, “Company Agreements and Instruments”), except for such defaults that would not result in a
7
Company Material Adverse Effect; the execution, delivery and performance of this Agreement, each Funding Agreement and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions contemplated in the Time of Sale Prospectus, the consummation of the transactions contemplated in the Time of Sale Prospectus (including the issuance and sale of the Notes and the use of the proceeds therefrom as described in the Time of Sale Prospectus) and the compliance by the Company with its obligations thereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its Significant Subsidiaries under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of the Company or any of its subsidiaries pursuant to, any Company Agreements and Instruments, nor will such action result in any violation of the provisions of the charter, articles or by-laws of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations.
(xi) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of the Company threatened, against or affecting the Company which is required to be disclosed in the Registration Statement and the Base Prospectus (other than as stated therein), or which may reasonably expected to result in a Company Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which the Company is a party or of which any of its assets, properties or operations is the subject which are not described in the Registration Statement and the Base Prospectus, as amended or supplemented, including ordinary routine litigation incidental to the business, may not reasonably be expected to result in a Company Material Adverse Effect.
(xii) Possession of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Company Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them; the Company and its subsidiaries are in compliance with the terms and conditions of all such Company Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Company Material Adverse Effect; all of the Company Governmental Licenses are valid and in full force and effect, except where the invalidity of such Company Governmental Licenses or the failure of such Company Governmental Licenses to be in full force and effect would not result in a Company Material Adverse Effect. Except as set forth in the Time of Sale Prospectus, neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Company Governmental Licenses which, singly
8
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Company Material Adverse Effect.
(xiii) No Filings, Regulatory Approvals etc. Other than the filing of the applicable financing statements, if any, no filing with, or approval, authorization, consent, license, registration, qualification, order or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the due authorization, execution and delivery by the Company of this Agreement, each Funding Agreement or the Program Documents or for the performance by the Company of the transactions contemplated in this Agreement, each Funding Agreement, the Program Documents or the Prospectus, except such as have been previously made, obtained or rendered, as applicable.
(xiv) Investment Company Act. None of the Company, Global Funding and the relevant Issuing Trust is, and upon the sale of the Funding Agreements, the Funding Notes and Notes as contemplated by the Programs and the application of the net proceeds therefrom as described in the Time of Sale Prospectus, will be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”).
(xv) Absence of Default Under Each Funding Agreement. There exists no event or circumstance which does or may (with the passing of time, the giving of notice, the making of any determination, or any combination thereof) be reasonably expected to constitute an event of default under any outstanding Funding Agreement.
(xvi) Funding Agreement Listed on any Stock Exchange. If specified in a Pricing Supplement, the Funding Agreement described in such Pricing Supplement shall be listed on the securities exchange designated in such Pricing Supplement.
(xvii) Relationship between the Company and the Agents. The Company acknowledges and agrees that (i) the purchase and sale of the Notes pursuant to the Distribution Agreement, including the determination of the offering price of the Notes and any related discounts and commissions, is an arm’s-length commercial transaction between Global Funding, on the one hand, and the Agents, on the other hand, (ii) in connection with the offerings contemplated by the Distribution Agreement and the process leading to such transactions each Agent is and has been acting solely as a principal and is neither the agent of Global Funding and the Company nor their fiduciary, respectively, or its stockholders, creditors, employees or any other party, (iii) no Agent has assumed or will assume an advisory or fiduciary responsibility in favor of Global Funding or the Company with respect to the offerings contemplated hereby or the process leading thereto (irrespective of whether such Agent has advised or is currently advising Global Funding or the Company on other matters) and no Agent has any obligation to Global Funding or the Company with respect to the offerings contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Global Funding or the Company, and (v) the Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offerings contemplated
9
hereby and Global Funding and the Company have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
(b) Additional Certifications. Any certificate signed by any officer of the Company and delivered to one or more Agents or to counsel for the Agents in connection with an offering of Notes by an Issuing Trust to one or more Agents as principal or through an Agent as agent shall be deemed a representation and warranty by the Company to such Agent(s) as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto.
SECTION 2. Covenants of the Company.
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents immediately, and confirm such notice in writing of (i) the effectiveness of any post-effective amendment to the Registration Statement or the filing of any amendment or supplement to the Time of Sale Prospectus or the Prospectus (other than any amendment or supplement thereto providing solely for the determination of the variable terms of the Notes), (ii) the receipt of any comments from the Commission with respect to the Registration Statement, any preliminary prospectus and the Prospectus, (iii) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Base Prospectus, (iv) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or Form 10, or of any order preventing or suspending the use of any preliminary prospectus or Prospectus, or of the initiation of any proceedings for that purpose, or (v) the failure of the Funding Agreements to be qualified for sale under the securities or blue sky laws of such jurisdiction as the Agents may request pursuant to Section 2(r). With respect to the Registration Statement, any preliminary prospectus and the Prospectus, the Company will make every reasonable effort to prevent the issuance of any stop order (or any similar order under blue sky laws) and, if any stop order (or any similar order under blue sky laws) is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing or Use of Amendments. The Company will give each Agent advance notice of its intention to file or prepare any additional registration statement with respect to the registration of additional Funding Agreements, any amendment to the Registration Statement (including any filing under Rule 462(b) of the 1933 Act Regulations) or any amendment or supplement to any preliminary prospectus or to the Prospectus (other than an amendment or supplement thereto providing solely for the determination of the variable terms of the Notes), whether pursuant to the 1933 Act, the 1934 Act or otherwise, and will provide immediate notice to each relevant Agent of any intention to prepare an amendment or supplement to the Time of Sale Prospectus and, if applicable to file such amendment or supplement pursuant to the 1933 Act, and will furnish to such Agents copies of any such document a reasonable amount of time prior to such proposed filing or the use of such materials, as the case may be, and will not file or use any such document to which an Agent or counsel for the Agents shall object.
(c) Revisions of Registration Statement. If at any time during the term of this Agreement any event shall occur or condition shall exist as a result of which it is necessary, in
10
the reasonable opinion of counsel for the Agents or counsel for the Company, to amend the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend the Registration Statement in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company shall give immediate notice, confirmed in writing, to the Agents to cease the solicitation of offers for the purchase of Notes and to cease sales of any Notes they may then own, and the Company will promptly prepare and file with the Commission, subject to Section 2(b) hereof, such amendment as may be necessary to correct such statement or omission or to make the Registration Statement comply with such requirements, and the Company will furnish to the Agents, without charge, such number of copies of such amendment as the Agents may reasonably request.
(d) Use of Free Writing Prospectuses. The Company will not take any action that would result in an Agent being required to file with the Commission pursuant to Rule 433(d) of the 1933 Act Regulations a free writing prospectus prepared by or on behalf of an Agent that such Agent otherwise would not have been required to file thereunder.
(e) Revisions of Time of Sale Prospectuses. If the Time of Sale Prospectus is being used to solicit offers to buy any Notes of a series at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition shall exist as a result of which it is necessary, in the reasonable opinion of counsel for the applicable Agent(s) or counsel for the Company, to amend or supplement the Time of Sale Prospectus in writing in order that the Time of Sale Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time the Time of Sale Prospectus is conveyed to a prospective purchaser, or if, in the reasonable opinion of either such counsel, it is necessary to amend or supplement the Time of Sale Prospectus to comply with the 1933 Act or 1933 Act Regulations, the Company shall give notice, confirmed in writing, to each of the applicable Agents and the Company will promptly prepare and, if applicable, file with the Commission such amendment or supplement as may be necessary to correct such statement or omission or to make the Time of Sale Prospectus comply with such requirements, and the Company will furnish to each of the applicable Agents, without charge, such number of copies of such amendment or supplement, as the relevant Agents may reasonably require.
(f) Delivery of the Registration Statement. The Company will furnish to the Agents and to counsel for the Agents, without charge, signed and conformed copies of the Registration Statement and conformed copies of all consents and certificates of experts. The Registration Statement furnished to an Agent will be identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(g) Delivery of the Preliminary Prospectus and Time of Sale Prospectus. Pursuant to the Distribution Agreement, Global Funding will deliver to each applicable Agent, without charge, as many copies of each preliminary prospectus as such Agent may reasonably request, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. Pursuant to the Distribution Agreement, Global Funding will furnish to each applicable
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Agent, without charge, such number of copies of the applicable Time of Sale Prospectus as such Agent may reasonably request, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. Each such document furnished to the applicable Agents will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(h) Delivery of Free Writing Prospectuses. The Company will deliver to each applicable Agent and, without charge, as many copies of each free writing prospectus, prepared by or on behalf of, used by, or referred to by the Company, as such Agent may reasonably request. To the extent applicable, each such document furnished to the Agents will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(i) Delivery of the Prospectus. Pursuant to the Distribution Agreement, Global Funding will deliver to each applicable Agent, without charge, as many copies of the relevant Prospectus (as amended or supplemented) as such Agent may reasonably request; the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. It is hereby acknowledged that Global Funding intends to rely on the provisions of Rule 172 of the 1933 Act Regulations with respect to the delivery of the Prospectus. The Prospectus and any amendments or supplements thereto furnished to such Agent will be identical in all material respects to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(j) Periodic Financial Information. On or prior to the date on which there shall be released to the general public interim financial statement information related to the Company with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company shall furnish such information to the Agents, confirmed in writing; provided, however, that if electronically transmitted copies thereof are filed with the Commission pursuant to EDGAR, such information shall be deemed to have been furnished and confirmed.
(k) Audited Financial Information. On or prior to the date on which there shall be released to the general public financial information included in or derived from the audited consolidated financial statements of the Company for the preceding fiscal year, the Company shall furnish such information to the Agents, confirmed in writing; provided, however, that if electronically transmitted copies thereof are filed with the Commission pursuant to EDGAR, such information shall be deemed to have been furnished and confirmed.
(l) Reporting Requirements. The Company, during the period when the Time of Sale Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file, and will cause to be filed, all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(m) Earnings Statements. The Company will timely file such reports pursuant to the 1934 Act and the 1934 Act Regulations, as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
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(n) Use of Proceeds. The Company will use the net proceeds received by it from the issuance and sale of the Funding Agreements in the manner specified in the Time of Sale Prospectus.
(o) Authorization to Act on Behalf of the Company. The Company will, from time to time, without request, deliver to the Agents a certificate as to the names and signatures of those persons authorized to act on behalf of the Company in relation to the Programs if such information has changed.
(p) Restrictions on the Offer and Sale of Funding Agreements. Except in connection with the Retail Program and as otherwise agreed, the Company shall not issue or agree to issue, during the period commencing on the date of the agreement of an Agent(s) to purchase Notes as principal or solicit offers for the purchase of Notes as agent and continuing to and including the Settlement Date with respect to such Notes, any Funding Agreement or similar agreement for the purpose of supporting the issuance by a special purpose entity of securities substantially similar to such Notes to the same potential investors (other than any Funding Agreement issued or to be issued to the relevant Issuing Trust in connection with the Notes to be offered and/or sold to or through such Agents), in each case without prior notice to the applicable Agent(s). Notwithstanding the foregoing, the Company shall be permitted to issue or agree to issue, during the aforementioned time period, Funding Agreements or similar agreements to Allstate Life Funding, LLC.
(q) Blue Sky Qualifications. The Company shall endeavor to qualify the Funding Agreements for offer and sale under the securities or blue sky laws of such jurisdictions as the Agents shall reasonably request and to maintain such qualifications for as long as such Agents shall reasonably request.
SECTION 3. Covenants of the Agents.
(a) The Agents shall comply with all of their obligations under the Distribution Agreement.
(b) The Agents shall not agree to any amendment or modification of the Distribution Agreement without the prior written consent of the Company.
SECTION 4. Additional Covenants of the Company.
The Company further covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by Global Funding and an Issuing Trust of an offer for the purchase of Notes (whether to one or more Agents as principal or through one or more Agents as agent), and each delivery of its Notes (whether to one or more Agents as principal or through an Agent as agent) shall be deemed to be an affirmation that the representations and warranties of the Company contained in any certificate theretofore delivered to such Agent pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to such Agent(s) or to the purchaser or its agent, as the case may be, of the Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (it being understood that such representations and
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warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the Registration Statement or Prospectus shall be amended or supplemented (other than by (A) an amendment or supplement providing solely for the determination of the variable terms of the Notes and (B) an amendment deemed to have occurred as a result of a periodic filing by the Company, Global Funding or any Issuing Trust under the 1934 Act or the 1934 Act Regulations, except any quarterly report of the Company on Form 10-Q or any annual report of the Company on Form 10-K (any such report, an “SEC Periodic Report”)), and (ii) (if required in connection with the purchase of Notes from an Issuing Trust by one or more Agents as principal) an Issuing Trust sells Notes to one or more Agents as principal or (iii) an Issuing Trust sells Notes in a form not previously certified to the Agents by such Issuing Trust, the Company shall furnish or cause to be furnished to the Agents, forthwith a certificate dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form satisfactory to the Agents to the effect that the statements contained in the certificate referred to in Section 7(d) of the Distribution Agreement which were last furnished to the Agents are true and correct at the time of the filing or effectiveness of such amendment or supplement, as applicable, or the time of such sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 7(d) of the Distribution Agreement, modified as necessary to relate to the Registration Statement as amended and supplemented to the time of delivery of such certificate (it being understood that, in the case of clause (ii) above, any such certificate shall also include a certification that there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise since the date of the agreement by such Agent to purchase Notes from the relevant Issuing Trust as principal); provided, however, that any delivery of certificates as required by this Section 4(b) due to the filing of an SEC Periodic Report shall only be required to be delivered prior to the pricing date for Notes issued immediately after such SEC Periodic Report.
(c) Company Officer’s Certificate. The Company shall have furnished to the Agents a certificate of the Company, signed by either the Chairman of the Board, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Secretary, General Counsel or Treasurer of the Company, dated the date of such certificate, to the effect that the signatory of such certificate has carefully examined the Registration Statement, the Prospectus and amendments and supplements thereto and this Agreement and that:
(i) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened;
(ii) since the date of the Prospectus there has occurred no event required to be set forth in an amendment or supplement to the Registration Statement or Prospectus, and there has been no document required to be filed under the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations which, upon filing, would be
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deemed to be incorporated by reference in the Prospectus which has not been so filed; and
(iii) nothing has come to the attention of the Company that would cause it to believe that the priority status of the Funding Agreements under Section 5/205 of the Illinois Insurance Code has been adversely modified since the date of the last delivery of the opinion issued by Lord, Bissell & Brook LLP, substantially in the form of Exhibit C attached to the Distribution Agreement.
SECTION 5. Indemnification.
(a) Indemnification of the Agent. With respect to any series of Notes, the Company agrees to indemnify and hold harmless each applicable Agent, its directors and officers and each person, if any, who controls such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of an untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to Section 5(d) hereof) any such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by such Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of (i) an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the applicable Agents concerning such Agents expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus, the
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applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto), (ii) any use of the Prospectus by the Agents to sell Notes or solicit offers for the purchase of Notes (x) after such time as the Company shall have provided written notice pursuant to Section 2(f) hereunder or Global Funding shall have provided written notice pursuant to Section 4(f) under the Distribution Agreement to the Agents to cease the sale of Notes and solicitation of offers for the purchase of Notes and (y) before such time as the Company shall have advised such Agent as the case may be, that such solicitation may be resumed or (iii) a claim for indemnity made under the Distribution Agreement, only to the extent such claim has previously been satisfied by the Company pursuant to the terms of the Distribution Agreement.
(b) Indemnification of the Company. With respect to any series of Notes, each Agent agrees, severally but not jointly, to indemnify and hold harmless the Company, its directors, officers and trustees (if applicable) who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 5(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Agent concerning such Agent expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus, the applicable Time of Sale Prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 5(a) hereof or Section 10(a) of the Distribution Agreement, counsel to the indemnified parties shall be selected by the applicable Agent(s) and, in the case of parties indemnified pursuant to Section 5(b) hereof or Section 10(b) of the Distribution Agreement, counsel to the indemnified shall be selected by the Company and Global Funding. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties (collectively with any other indemnifying parties in connection with the Distribution Agreement), whether such indemnity is claimed hereunder or under the Distribution Agreement, be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party under this Agreement or the Distribution Agreement, shall, without the prior written consent of the indemnified parties under this Agreement and the Distribution Agreement, settle or compromise or consent to the entry of any judgment with
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respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 5 or Section 6 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested in writing an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 5(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 6. Contribution.
If the indemnification provided for in Section 5 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on one hand, and the applicable Agent(s), on the other hand, from the offering of the Notes that were the subject of the claim for indemnification or (ii) if the allocation provided by clause (i) 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 Company, on one hand, and the applicable Agent(s), on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the applicable Agent(s), on the other hand, in connection with the offering of the Notes that were the subject of the claim for indemnification shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Notes (before deducting expenses) received by the Company and the total discount or commission received by the applicable Agent(s), as the case may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on one hand, and the applicable Agent(s), on the other hand, shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, on one hand, or by the applicable Agent(s), on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
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The parties agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation (even if the Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 6. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 6 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any applicable untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, (i) no Agent shall be required to contribute any amount in excess of the amount by which the total discount or commission received by such Agent in connection with the offering of the Notes that were the subject of the claim for indemnification exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of any applicable untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In addition, in connection with an offering of Notes purchased from an Issuing Trust by two or more Agents as principal, the respective obligations of such Agents to contribute pursuant to this Section 6 are several, and not joint, in proportion to the aggregate principal amount of Notes that each such Agent has agreed to purchase from such Issuing Trust.
For purposes of this Section 6, each director, officer and person, if any, who controls an Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Agent, and each director, officer and trustee (if applicable) of the Company, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company.
SECTION 7. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, in certificates submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agents or any controlling person of the Agents, or by or on behalf of the Company, and shall survive each delivery of and payment for the Notes.
SECTION 8. Termination.
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Termination of this Agreement. This Agreement shall terminate as follows: |
(i) With respect to all Agents, automatically and simultaneously with the termination of the Distribution Agreement with respect to all Agent(s) (such termination shall be effective immediately);
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(ii) With respect to all Agents, at any time at the option of the Company, if the Distribution Agreement is amended or supplemented without the Company’s prior written consent (such termination shall be effective immediately upon exercise of such option);
(iii) With respect to the applicable Agent(s), at any time at the option of the Company, if any use of the Prospectus by the applicable Agent(s) to sell Notes or solicit offers for the purchase of Notes occurs (x) after such time as the Company shall have provided written notice pursuant to Section 2(f) hereunder or Global Funding shall have provided written notice pursuant to Section 4(f) of the Distribution Agreement to the applicable Agent(s) to cease the sale of Notes and solicitation of offers for the purchase of Notes and (y) before such time as the relevant Issuing Trust shall have advised such Agent as the case may be, that such solicitation may be resumed; or
(iv) With respect to the applicable Agent(s), at any time at the option of the Company, if the applicable Agent(s) is added or deleted as a party to this Agreement without the prior written consent of the Company (such termination shall be effective immediately upon exercise of such option).
(b) General. In the event of any such termination, neither party will have any liability to the other party hereto, except that (i) the applicable Agent(s) shall be entitled to any commissions earned in accordance with the Distribution Agreement, (ii) if at the time of termination (a) any applicable Agent shall own any Notes purchased by it from an Issuing Trust as principal or (b) an offer to purchase any of the Notes has been accepted by an Issuing Trust but the time of delivery to the purchaser or his agent of such Notes relating thereto has not occurred, the covenants set forth in Sections 2 and 4 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 2(j) hereof, the indemnity and contribution agreements set forth in Sections 5 and 6 hereof, and the provisions of Sections 7, 10 and 11 hereof shall remain in effect.
SECTION 9. Notices.
Unless otherwise provided herein, all notices required under the terms and provisions hereof shall be in writing, either delivered by hand, by mail or by telex, telecopier or telegram, and any such notice shall be effective when received at the address specified below.
If to the Company:
Allstate Life Insurance Company
3100 Sanders Road
Northbrook, Illinois 60062
Attention: Assistant Vice President, Institutional Markets
Telecopy No.: (847) 326-5048
If to the Agents:
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To each Agent at the address specified in Schedule 1 to the Distribution Agreement.
or at such other address as such party may designate from time to time by notice duly given in accordance with the terms of this Section 9.
SECTION 10. Parties.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Sections 5 and 6 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors, and said controlling persons, officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase.
SECTION 11. GOVERNING LAW; FORUM.
PURSUANT TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK.
SECTION 12. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 13. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument.
SECTION 14. Amendments.
This Agreement may be amended or supplemented if, but only if, such amendment or supplement is in writing and is signed by the Company and the Agents. In accordance with the Distribution Agreement, Global Funding may from time to time nominate any institution as a new Agent under the Distribution Agreement either in respect of the Programs generally or in
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relation only to the Notes of a particular Issuing Trust, and upon such nomination, if not already executed, such Agent(s) will execute a counterpart of this Agreement.
SECTION 15. Separate Nature of Each Issuing Trust.
The Agents agree and acknowledge that, as a separate and distinct special purpose statutory trusts, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Issuing Trust, including such Issuing Trust’s obligations under this Agreement and the applicable Terms Agreement, will be enforceable only against such Issuing Trust and not against any other Issuing Trust.
SECTION 16. Covenants of the Agents. Each Agent covenants with the Company:
(a) Delivery of Free Writing Prospectuses and Other Marketing Materials. Except as otherwise provided in the applicable Terms Agreement, such Agent will, prior to its first use, furnish the Company with a copy of each proposed free writing prospectus that is required to be filed pursuant to Rule 433(d) under the 1933 Act Regulations or is or will be part of the Time of Sale Prospectus and any other marketing materials (other than (x) any free writing prospectus that is not required to be filed or will not be part of the Time of Sale Prospectus or (y) any marketing material that complies with Rule 134 of the 1933 Act Regulations) relating to or to be used in connection with any offer or sale of the Notes, in each case prepared by or on behalf of such Agent and will not use any such free writing prospectus or other marketing materials to which the Company reasonably objects.
(b) Use of Free Writing Prospectuses and Other Marketing Materials. Such Agent may use a free writing prospectus or any other marketing materials prepared by or on behalf of such Agent only if such free writing prospectus or such marketing materials complies in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(c) Distribution of Free Writing Prospectuses and Other Marketing Materials. Such Agent will not distribute any free writing prospectus or any other marketing materials (other than any marketing material that complies with Rule 134 of the 1933 Act Regulations) used or referred to by such Agent in a manner reasonably designed to lead to its broad unrestricted dissemination; provided that this covenant shall not apply to any free writing prospectus or such marketing materials forming part of the Time of Sale Prospectus or any free writing prospectus or such marketing materials prepared or approved by the Company for broad unrestricted dissemination.
*** SIGNATURE PAGES FOLLOW ***
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If the foregoing is in accordance with the Agents’ understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this Agreement, along with all counterparts, will become a binding agreement by and between the Agents and the Company in accordance with its terms.
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Very truly yours,
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ALLSTATE LIFE INSURANCE COMPANY
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CONFIRMED AND ACCEPTED,
as of the date first above written:
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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | ||
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Authorized Signatory |
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A.G. EDWARDS & SONS, INC. | ||
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BANC OF AMERICA SECURITIES LLC | ||
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Signature Page to Representations and Indemnity Agreement, Part 1 of 4*
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BARCLAYS CAPITAL INC. | ||
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BEAR, STEARNS & CO. INC. | ||
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CITIGROUP GLOBAL MARKETS INC. | ||
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CREDIT SUISSE SECURITIES (USA) LLC | ||
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DEUTSCHE BANK SECURITIES INC. | ||
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GOLDMAN, SACHS & CO. |
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Signature Page to Representations and Indemnity Agreement, Part 2 of 4*
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GREENWICH CAPITAL MARKETS, INC. | ||
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J.P. MORGAN SECURITIES INC. | ||
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LEHMAN BROTHERS INC. | ||
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MORGAN STANLEY & CO. INCORPORATED | ||
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UBS SECURITIES LLC | ||
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Signature Page to Representations and Indemnity Agreement, Part 3 of 4*
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WACHOVIA CAPITAL MARKETS, LLC | ||
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Signature Page to Representations and Indemnity Agreement, Part 4 of 4*
EXHIBIT 4.8
FORM OF GLOBAL SECURITY FOR
SECURED MEDIUM TERM NOTES PROGRAM
[FACE OF GLOBAL SECURITY]
[If the global security is registered in the name of Cede & Co., insert
Unless this Note Certificate is presented by an authorized representative of the Depository Trust Company, a New York corporation (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), 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.
This Note Certificate is a global security within the meaning of the standard indenture terms hereinafter referred to and is registered in the name of Cede & Co., or such other nominee of DTC, or any successor depositary (“Depositary”), as requested by an authorized representative of the Depositary. The notes represented by this Note Certificate may not be exchanged in whole or in part for notes registered, and no transfer of the notes represented by this Note Certificate in whole or in part may be registered, in the name of any person other than the Depositary or a nominee thereof, except in the limited circumstances described in the standard indenture terms. Every Note Certificate authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, this Note Certificate will be a global security subject to the foregoing, except in such limited circumstances.]
CUSIP No.:
ISIN:
Common Code:
ALLSTATE LIFE GLOBAL FUNDING TRUST --
SECURED MEDIUM TERM NOTES
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Title of Notes: |
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Stated Maturity Date: |
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Principal Amount: $ |
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Securities Exchange Listing: o Yes o No. If yes, indicate name(s) of Securities Exchange(s): |
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(or principal amount of foreign or composite currency) |
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Original Issue Date: |
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Issue Price: |
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Fixed Rate Notes: o Yes o No. If yes, |
Floating Rate Notes: o Yes o No. If yes, | ||
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Interest Rate: |
Regular Floating Rate Notes: o | ||
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Interest Payment Dates: |
Inverse Floating Rate Notes: o | ||
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Day Count Convention: |
Floating Rate/Fixed Rate Notes: o | ||
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Additional/Other Terms: |
Interest Rate: | ||
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Amortizing Notes: o Yes o No. If yes, |
Interest Rate Basis(es): | ||
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Amortization Schedule: |
CD Rate o | ||
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Additional/Other Terms: |
CMT Rate o | ||
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Discount Notes: o Yes o No. If yes, |
Commercial Paper Rate o | ||
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Total Amount of Discount: |
Constant Maturity Swap Rate o | ||
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Initial Accrual Period of Discount: |
Eleventh District Cost of Funds Rate o | ||
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Additional/Other Terms: |
EURIBOR o | ||
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Redemption Provisions: o Yes o No. If yes, |
Federal Funds Rate o | ||
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Initial Redemption Date: |
LIBOR o |
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Initial Redemption Percentage: |
Prime Rate o |
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Annual Redemption Percentage Reduction, if any: |
Treasury Rate o |
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Additional/Other Terms: |
If LIBOR: |
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Repayment Provisions: o Yes o No. If yes, |
LIBOR Reuters Page: |
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Optional Repayment Date(s): |
LIBOR Currency: |
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Optional Repayment Price: |
If CMT Rate: |
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Additional/Other Terms: |
Designated CMT Reuters Page: |
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Regular Interest Record Date(s): |
If CMT Reuters Page FEDCMT: |
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Sinking Fund, if any: |
o Weekly Average |
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Specified Currency: |
o Monthly Average |
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Exchange Rate Agent: |
Designated CMT Maturity Index: |
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Calculation Agent: |
Index Maturity: |
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Depositary: |
Spread (+/-), if any: |
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Authorized Denominations: |
Spread Multiplier, if any: |
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Collateral: The right, title and interest of the Trust in and to: |
Initial Interest Rate, if any: |
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(i) Allstate Life Insurance Company Funding |
Initial Interest Reset Date: |
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Agreement No(s). - ; (ii) all proceeds in respect of such |
Interest Reset Dates: |
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Funding Agreement(s); and (iii) all books and records |
Interest Determination Date(s): |
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(including, without limitation, computer programs, |
Interest Payment Dates: |
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printouts, and other computer materials and files) |
Maximum Interest Rate, if any: |
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pertaining to such Funding Agreement(s). |
Minimum Interest Rate, if any: |
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Additional Amounts to be Paid for Withholding Tax: |
Fixed Rate Commencement Date, if any: |
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o Yes o No |
Floating Interest Rate, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention: |
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Additional/Other Terms: |
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This Note Certificate is a Global Security in respect of a duly authorized issue of Notes (the “Notes”) of the Allstate Life Global Funding Trust designated above, a statutory trust organized under the laws of the State of Delaware (the “Trust”). The Notes are issued under the Indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Indenture”) among the Trust and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Indenture Terms, which are incorporated by reference in and form a part of the Indenture (as amended or supplemented from time to time, the “Standard Indenture Terms”).
The Trust, for value received, hereby promises to pay to [Cede & Co.] or its registered assigns, on the Stated Maturity Date (or on the date of redemption or repayment by the Trust prior to maturity pursuant to redemption or repayment provisions, in each case, if provided for above) the principal amount specified above and, if so specified above, to pay interest from time to time on the Notes represented by this Note Certificate from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Notes represented by this Note Certificate is paid or made available for payment and to pay such other amounts due and owing with respect to the Notes represented by this Note Certificate.
On any exchange or purchase and cancellation of any of the Notes represented by this Note Certificate, details of such exchange or purchase and cancellation shall be entered in the records of the Indenture Trustee. Upon any such exchange or purchase and cancellation, the principal amount of the Notes represented by this Note Certificate shall be charged by the principal amount so exchanged or purchased and cancelled, as provided in the Standard Indenture Terms.
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Unless otherwise set forth above, if the Notes are subject to an Annual Redemption Percentage Reduction as specified above, the Redemption Price of the Notes represented by this Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the Notes represented by this Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
The Notes will mature on the Stated Maturity Date, unless their principal (or, any installment of their principal) becomes due and payable prior to the Stated Maturity Date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of the Trust, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date or any date prior to the Stated Maturity Date on which the Notes become due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Notes repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, the Trust will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made on any Interest Payment Date or on a Maturity Date that is not a Business Day shall be made in accordance with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Notes set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Notes as specified above, the Notes shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Notes represented by this Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Indenture Trustee pursuant to the Indenture.
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IN WITNESS WHEREOF, the Trust has caused this instrument to be duly executed on its behalf.
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Dated: Original Issue Date |
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THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE, as Issuer | ||
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By: [WILMINGTON TRUST COMPANY], | ||
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By: |
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Name: | |
CERTIFICATE OF AUTHENTICATION
This Note Certificate is one of the Note Certificates representing Notes described in the within-mentioned Indenture.
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Dated: Original Issue Date |
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[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as Indenture Trustee | ||
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By: |
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Authorized Signatory | |
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[REVERSE OF GLOBAL SECURITY]
SECTION 1. General. This Note Certificate is a Global Security in respect of a duly authorized issue of Notes of the Trust. The Notes are issued pursuant to the Indenture.
SECTION 2. Currency. The Notes are denominated in, and payments of principal of, premium, if any, and interest on, if any, and other amounts in respect of, the Notes will be in the Specified Currency designated on the face hereof. If the Notes are Foreign Currency Notes, any amounts so payable by the Trust in the Specified Currency will be converted by the exchange rate agent designated on the face hereof (the “Exchange Rate Agent”) into United States dollars for payment to the registered holders hereof unless otherwise specified on the face hereof or a registered holder elects, in the manner described below, to receive payments in the Specified Currency.
If the Specified Currency for Foreign Currency Notes is not available for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond the control of the Trust, the Trust will be entitled to satisfy the obligations to the registered holders of such Foreign Currency Notes by making payments in United States dollars based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Trust for the purchase by the quoting dealer of the Specified Currency for United States dollars for settlement on that payment date in the aggregate amount of the Specified Currency payable to all registered holders of such Foreign Currency Notes scheduled to receive United States dollar payments and at which the applicable dealer commits to execute a contract. All currency exchange costs will be borne by the relevant registered holders of such Foreign Currency Notes by deductions from any payments. If three bid quotations are not available, payments will be made in the Specified Currency.
Registered holders of Foreign Currency Notes may elect to receive all or a specified portion of any payment of principal, premium, if any, and/or interest, if any, in the Specified Currency by submitting a written request to the Indenture Trustee at its corporate trust office in The City of New York on or prior to the applicable Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. This written request may be mailed or hand delivered or sent by cable, telex or other form of facsimile transmission. This election will remain in effect until revoked by written notice delivered to the Indenture Trustee on or prior to a Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. Registered holders of Foreign Currency Notes to be held in the name of a broker or nominee should contact their broker or nominee to determine whether and how an election to receive payments in the Specified Currency may be made.
Unless otherwise specified on the face hereof, if the Specified Currency is other than United States dollars, a beneficial owner hereof which elects to receive payments of principal, premium, if any, and/or interest, if any, in the Specified Currency must notify the DTC participant (the “Participant”) through which it owns its interest on or prior to the applicable Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be, of its election. The applicable Participant must notify the Depositary of its election on or prior to the third Business Day after the applicable Regular Interest Record Date or at least twelve calendar days prior to the Maturity Date, as the case may be, and the Depositary will notify the Indenture Trustee of that election on or prior to the fifth Business Day after the applicable Regular Interest Record Date or at least ten calendar days prior to the Maturity Date, as the case may be. If complete instructions are received by the Participant from the applicable beneficial owner and forwarded by the Participant to the Depositary, and by the Depositary to the Indenture Trustee, on or prior to such dates, then the applicable beneficial owner will receive payments in the Specified Currency.
Unless otherwise specified on the face hereof, if payment in the Specified Currency hereon is not available to the Trust for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond the Trust’s control, then the Trust will be entitled to satisfy its obligations by making payments in United States dollars on the basis of the Market Exchange Rate, computed by the Exchange Rate Agent as described above, on the second Business Day prior to the particular payment or, if the
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Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate. The “Market Exchange Rate” for a Specified Currency other than United States dollars means the noon dollar buying rate in The City of New York for cable transfers for the Specified Currency as certified for customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New York. Any payment in respect hereof made under such circumstances in U.S. Dollars will not constitute an Event of Default under the Indenture.
In the event that a member state of the European Union in whose national currency is the Specified Currency becomes a participant member in the third stage of the European economic and monetary union, the Trust may on or after the date of such occurrence, without the consent of the Holder hereof, redenominate all, but not less than all, of the Notes hereof.
All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder hereof and any applicable Entitlement Holders.
All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.
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SECTION 3. |
Determination of Interest Rate and Other Payment Provisions. |
Fixed Rate Notes. If the Notes are designated on the face hereof as “Fixed Rate Notes,” the Notes will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Notes will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of Fixed Rate Notes falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Notes. If the Notes are designated on the face hereof as “Discount Notes” (as defined below), payments in respect of the Notes shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of such Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of such Discount Notes, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on such Discount Notes to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Notes o ccurs for Discount Notes, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for the Discount Notes (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to Discount Notes and an assumption that the maturity of such Discount Notes will not be accelerated. If the period from the date of issue to the first Interest Payment Date for Discount Notes (the “Initial Period”) is shorter than the compounding period for such Discount Notes, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. A “Discount Note” is any Note that has an Issue Price that is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Amortizing Notes. If the Notes are specified on the face hereof as “Amortizing Notes,” the Notes shall bear interest at the rate set forth on the face hereof, and payments of principal and interest shall be made as set forth on
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the face hereof and/or in accordance with Schedule I attached hereto. Unless otherwise specified on the face hereof, interest on the Notes will be computed on the basis of a 360-day year of twelve 30-day months. Payments with respect to Amortizing Notes will be applied first to interest due and payable on the Notes and then to the reduction of the unpaid principal amount of Notes represented by this Note Certificate.
Floating Rate Notes. If the Notes are specified on the face hereof as “Floating Rate Notes,” interest on the Notes shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Eleventh District Cost of Funds Rate Note, Federal Funds Rate Note, LIBOR Note, EURIBOR Note, Prime Rate Note or Treasury Rate Note. If the Notes are designated on the face hereof as Floating Rate Notes, the face hereof will specify whether the Notes are Regular Floating Rate Notes, Inverse Floating Rate Notes or Floating Rate/Fixed Rate Notes. For the period from the date of issue to, but not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Notes are LIBOR Notes or EURIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date. |
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Notes reset daily, each Business Day; (2) if the Notes reset weekly, other than Treasury Rate Notes, the Wednesday of each week; (3) if the Notes are Treasury Rate Notes that reset weekly, and except as provided below under “Treasury Rate Notes,” the Tuesday of each week; (4) if the Notes reset monthly, the third Wednesday of each month, unless the Eleventh District Cost of Funds Rate is the Interest Rate Basis (as defined below) applicable to the Notes, in which case the Notes will reset the first calendar day of the month; (5) if the Notes reset quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Notes reset semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Notes reset annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to Floating Rate/ Fixed Rate Notes, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of Floating Rate Notes as to which the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an applicable Interest Rate Basis, or by the actual number of days in the year, in the case of Floating Rate Notes as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for Floating Rate Notes as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate |
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that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Calculation Date (as defined below).
“Calculation Date” means the date by which the Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of: (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be.
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of United States dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards). |
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(E) |
Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if any Interest Payment Date (other than the Maturity Date for the Notes) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Notes are LIBOR Notes or EURIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if the Maturity Date of the Notes falls on a day this is not a Business Day, the Trust will make the required payment of principal, premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day. |
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Notes is daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof; (2) if the Interest Reset Date for the Notes is quarterly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (3) if the Interest Reset Date for the Notes is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof; or (4) if the Interest Reset Date for the Notes is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, the Maturity Date will also be an Interest Payment Date.
If specified on the face hereof, the Notes may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Notes are designated on the face hereof as Floating Rate Notes, the interest rate on Notes shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Notes and neither the Indenture Trustee nor the Calculation Agent shall have any liability to the Holder of the Notes in respect of any determination, calculation, quote or rate made or provided by the Calculation Agent. Upon request of the Holder of the Notes, the
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Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Notes. If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, the Trust will appoint a successor to act as such in its place. The Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Notes on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the “Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Notes. If the Interest Rate Basis is the CD Rate, the Notes shall be deemed to be “CD Rate Notes.” CD Rate Notes will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate, under the heading “CDs (secondary market)”; or (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life"))for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
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(B) |
CMT Rate Notes. If the Interest Rate Basis is the CMT Rate, the Notes shall be deemed to be “CMT Rate Notes.” CMT Rate Notes will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day preceding the Interest Reset Date. |
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“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the
10
caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Notes. If the Interest Rate Basis is the Commercial Paper Rate, the Notes shall be deemed to be “Commercial Paper Rate Notes.” Commercial Paper Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as such rate is published in H.15(519) under the heading “Commercial Paper—Nonfinancial”; or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not published by 3:00 P.M., New York City time, on the Calculation Date, then the Commercial Paper Rate as calculated by the Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 |
x 100 |
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360 - (D x M) |
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where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. |
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Constant Maturity Swap Rate” means: (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City time, on the particular Interest Determination Date; or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.
“Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Calculation Agent, after consultation with Allstate Life.
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(E) |
Eleventh District Cost of Funds Rate Notes. If the Interest Rate Basis is the Eleventh District Costs of Funds Rate, the Notes shall be deemed to be “Eleventh District Cost of Funds Rate Notes.” Eleventh District Cost of Funds Notes will bear interest at the interest rate calculated with reference to the Eleventh District Cost of Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Eleventh District Cost of Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the last working day of the month immediately preceding the related Interest Reset Date on which the Federal Home Loan Bank of San Francisco publishes the Eleventh District Index (as defined below). |
The “Eleventh District Cost of Funds Rate” means: (1) the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which the particular Interest Determination Date falls as set forth under the caption “11th District” on the display on Reuters (or any successor service) on page COFI/ARMS (or any other page as may replace the specified page on that service) (“Reuters Page COFI/ARMS”) as of 11:00 A.M., San Francisco time, on that Interest Determination Date; or (2) if the rate referred to in clause (1) does not so appear on Reuters Page COFI/ARMS, the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the “Eleventh District Index”) by the Federal Home Loan Bank of San Francisco as the cost of funds for the calendar month immediately preceding that Interest Determination Date; or (3) if the Federal Home Loan Bank of San Francisco fails to announce the Eleventh District Index on or prior to the particular Interest Determination Date for the calendar month immediately preceding that Interest Determination Date, the Eleventh District
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Cost of Funds Rate in effect on the particular Interest Determination Date; provided that if no Eleventh District Cost of Funds Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
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(F) |
EURIBOR Notes. If the Interest Rate Basis is EURIBOR (as defined below), the Notes shall be deemed to be “EURIBOR Notes.” EURIBOR Notes will bear interest at the rates (calculated with references to the European inter-bank offered rate for deposits in Euro, or “EURIBOR”, and the Spread and/or Spread Multiplier, if any) specified on the face hereof. |
“EURIBOR” means, with respect to any Interest Determination Date relating to EURIBOR Notes or Notes that bear interest at floating rates for which the interest rate is determined with reference to EURIBOR (a “EURIBOR Interest Determination Date”), the rate for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI—The Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, as the rate appears on Reuters, or any successor service, on page EURIBOR 01 (or any other page as may replace that specified page on the service) (“Reuters Page EURIBOR 01”) as of 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date. If such rate does not appear on Reuters Page EURIBOR 01, or is not so published by 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date, such rate will be calculated by the Calculation Agent and will be the arithmetic mean of at least two quotations obtained by the Calculation Agent after requesting the principal Euro-zone (as defined below) offices of four major banks in the Euro-zone interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in Euros for the period of the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euro in the market at that time. If fewer than two such quotations are so provided, the rate on the applicable EURIBOR Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date by four major banks in the Euro-zone selected by the Calculation Agent (after consultation with Allstate Life)for loans in Euro to leading European banks, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euros in the market at that time. If the banks so selected by the Calculation Agent are not quoting as mentioned above, EURIBOR will be EURIBOR in effect on the applicable EURIBOR Interest Determination Date; provided that if no EURIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Euro-zone” means the region comprised of member states of the European Union that have adopted the single currency in accordance with the Treaty Establishing the European Community, as amended by the Treaty on European Union.
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(G) |
Federal Funds Rate Notes. If the Interest Rate Basis is the Federal Funds Rate, the Notes shall be deemed to be “Federal Funds Rate Notes.” Federal Funds Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
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“Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page FEDFUNDS1.
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(H) |
LIBOR Notes. If the Interest Rate Basis is LIBOR (as defined below), the Notes shall be deemed to be “LIBOR Notes.” LIBOR Notes will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day (as defined below) preceding the related Interest Reset Date. |
LIBOR means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that
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service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(I) |
Prime Rate Notes. If the Interest Rate Basis is the Prime Rate, the Notes shall be deemed to be “Prime Rate Notes.” Prime Rate Notes will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Prime Rate” means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date; or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent (after consultation with Allstate Life); or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Reuters Screen US PRIME 1 Page” means the display on Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks.
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(J) |
Treasury Rate Notes. If the Interest Rate Basis is the Treasury Rate, the Notes shall be deemed to be “Treasury Rate Notes.” Treasury Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below). |
“Treasury Rate” means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the
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Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury; or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof; or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N |
x 100 |
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360 - (D x M) |
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where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(K) |
Regular Floating Rate Notes. Unless the Notes are designated as Floating Rate/Fixed Rate Notes or Inverse Floating Rate Notes, or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, such Notes that bear interest at floating rates will be Regular Floating Rate Notes and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on Regular Floating Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(L) |
Floating Rate/Fixed Rate Notes. If the Notes are designated as “Floating Rate/Fixed Rate Notes” on the face hereof, such Notes that bear interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on Floating Rate/Fixed Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
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(M) |
Inverse Floating Rate Notes. If the Notes are designated as “Inverse Floating Rate Notes” on the face hereof, the Inverse Floating Rate shall be equal to the Fixed Interest Rate minus the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any; provided, however, that interest on Inverse Floating Rate Notes will not be less than zero. Commencing on the first Interest Reset Date, the rate at which interest on Inverse Floating Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
SECTION 4. Optional Redemption. Except in the case of Discount Notes, if an Initial Redemption Date is specified on the face hereof, the Trust may redeem the Notes prior to the Stated Maturity Date at its option on any Business Day on or after the Initial Redemption Date in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof (provided that any remaining principal amount of the Notes shall be at least $1,000 or other minimum authorized denomination applicable thereto), at the applicable Redemption Price (as defined below), together with unpaid interest accrued on the Notes, any Additional Amounts and other amounts payable with respect thereto to the date of redemption. The Trust must give written notice to the Holders of the Notes to be redeemed at its option not more than 60 nor less than 30 calendar days prior to the date of redemption. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of Notes represented by this Note Certificate to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount thereof to be redeemed.
SECTION 5. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face hereof or unless the Notes are Amortizing Notes, the Notes will not be subject to any sinking fund. If it is specified on the face hereof that the Notes are Amortizing Notes, the Trust will make payments combining principal and interest on the dates and in the amounts set forth in the table appearing in Schedule I, attached to this Note Certificate. If the Notes are Amortizing Notes, payments made on the Notes will be applied first to interest due and payable on each such payment date and then to the reduction of the unpaid principal amount.
SECTION 6. Optional Repayment. If so specified on the face hereof, the Notes will be subject to repayment by the Trust at the option of the Holder of the Notes on the Optional Repayment Date(s) specified on the face hereof, in whole or in part in increments of U.S.$1,000 (provided that any remaining principal amount of the Notes shall be at least U.S.$1,000), at a repayment price equal to 100% of the unpaid principal amount of the Notes to be repaid, together with unpaid interest accrued thereon to the Repayment Date (as defined below). For the Notes to be so repaid, the Indenture Trustee must receive at its corporate trust office not more than 60 nor less than 30 calendar days prior to the applicable Optional Repayment Date, a properly completed Option to Elect Repayment form, which is attached hereto as Annex A, forwarded by the Holder hereof. Exercise of such repayment option shall be irrevocable. As used herein, the term “Repayment Date” shall mean the date fixed for repayment in accordance with the repayment provisions specified above.
SECTION 7. Registration, Transfer And Exchange. As provided in the Standard Indenture Terms and subject to certain limitations therein and herein set forth, the transfer of the Notes represented by this Note
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Certificate is registrable in the records of the Registrar. Upon surrender of this Note Certificate for registration of transfer at the office or agency of the Trust in any place where the principal of and interest on the Notes are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trust and the Registrar duly executed by, the Holder or by his or her attorney duly authorized in writing, and thereupon one or more new Note Certificates having the same terms and provisions, in authorized denominations and for the same aggregate principal amount, will be issued by the Trust to the designated transferee or transferees.
As provided in the Standard Indenture Terms and subject to certain limitations therein and herein set forth, the Notes represented by this Note Certificate are exchangeable for a like aggregate principal amount of Notes in authorized denominations but otherwise having the same terms and provisions, as requested by the Holder of this Note Certificate surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Trust or Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note Certificate for registration of transfer, the Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee may treat the Holder as the owner of the Notes for all purposes, including receiving payment of principal of and interest on the Notes, whether or not the Notes be overdue, and neither the Trust, the Indenture Trustee nor any such agent shall be affected by notice to the contrary, except as required by law.
SECTION 8. Certificated Notes. Under certain circumstances described in the Standard Indenture Terms, the Trust will issue Certificated Notes in exchange for the Book-Entry Notes represented by a Global Security. The Certificated Notes issued in exchange for any Book-Entry Notes represented by a Global Security shall be of like tenor and of an equal aggregate principal amount, in authorized denominations. Such Certificated Notes shall be registered in the name or names of such person or persons as the Depositary shall instruct the Registrar.
SECTION 9. Modifications and Amendments. Sections 9.1 and 9.2 of the Standard Indenture Terms contain provisions permitting the Trust and the Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Indentures for limited purposes and take other actions set forth in the Standard Indenture Terms, and (2) with the consent of the Holders of not less than 662/3% in aggregate principal amount of Notes at the time outstanding, evidenced as in the Standard Indenture Terms, to execute Supplemental Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or any Supplemental Indenture or modifying in any manner the rights of the Holders of the Notes subject to specified lim itations.
SECTION 10. Obligations Unconditional. No reference herein to the Indenture or to the Standard Indenture Terms and no provision of the Notes or of the Indenture shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Notes at the places, at the respective times, at the rate, and in the coin or currency, herein prescribed.
SECTION 11. Collateral. Pursuant to the Indenture, the Trust will grant a security interest in, pledge and collaterally assign the Collateral specified on the face hereof to the Indenture Trustee on behalf of the holders of the Notes and any other person for whose benefit the Indenture Trustee is or will be holding the Collateral. The Notes will be secured by a first priority perfected security interest in the Collateral in favor of the Indenture Trustee and the other persons identified in the Standard Indenture Terms.
SECTION 12. Security; Limited Recourse. The Notes are solely the obligations of the Trust, and will not be guaranteed by any person, including but not limited to Allstate Life, Allstate Life Global Funding, any Agent, the Trust Beneficial Owner, the Delaware Trustee, the Indenture Trustee or any of their affiliates. The Trust’s obligations under the Notes will be secured by all of the Trust’s rights and title in one or more Funding Agreement(s) issued by Allstate Life and other rights and assets included in the applicable Collateral. The Holder of the Notes has no direct contractual rights against Allstate Life under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to Allstate Life will belong to the Trust, its successors and permitted
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assignees. The Trust has pledged, collaterally assigned and granted a first priority perfected security interest in the Collateral for the Notes to the Indenture Trustee on behalf of the Holders of the Notes and the other persons identified in the Standard Indenture Terms. Recourse to Allstate Life under each Funding Agreement will be enforceable only by the Indenture Trustee as a secured party on behalf of the Holders of Notes and the other persons identified in the Standard Indenture Terms.
SECTION 13. Events of Default. In case an Event of Default, as defined in the Standard Indenture Terms, shall have occurred and be continuing, the principal of the Notes may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. If the Notes are Discount Notes, the amount of principal of the Notes that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 14. Withholding; Additional Amounts; Tax Event. All amounts due in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax payments on the Notes unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, the Trust will not pay any additional amounts (“Additional Amounts”) to Holders of the Notes in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem the Notes. If the Trust is required to pay Additional Amounts pursuant to the applicable provisions of the Standard Indenture Terms and unless otherwise specified herein, the Trust shall give a notice of redemption to each Holder of the Notes to be redeemed not more than 75 days nor less than 30 days prior to the Redemption Date; provided that no such notice of redemption may be given earlier than 90 days prior to the earliest day on which the Trust would become obligated to pay the applicable Additional Amounts were a payment in respect of the Notes then due. Failure to give such notice to the Holder of any Note designated for redemption in whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Note or any portion thereof. “Tax Event” means that the Trust shall have become required at any time to pay Additional Amounts or if the Trust is obligated to withhold or deduct any United States taxes with respect to any payment under the Notes or if there is a material probability that the Trust will become obligated to withhold or deduct any such United States taxes or otherwise pay Additional Amounts (in the opinion of independent legal counsel selected by Allstate Life), in each case pursuant to any change in or amendment to any United States tax laws (or any regulations or rulings thereunder) or any change in position of the Internal Revenue Service regarding the application or interpretation thereof (including, but not limited to, Allstate Life’s or the Trust’s receipt of a written adjustment from the Internal Revenue Service in connection with an audit).
SECTION 15. Listing. Unless otherwise specified on the face hereof, the Notes will not be listed on any securities exchange.
SECTION 16. No Recourse Against Certain Persons. No recourse shall be had for the payment of the principal of or the interest on the Notes, or for any claim based hereon, or otherwise in respect thereof, or based on or in respect of the Indenture or any Supplemental Indenture, against the Nonrecourse Parties, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such personal liability being, by the acceptance of any Notes and as part of the consideration for issue of the Notes, expressly waived and released.
SECTION 17. Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
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ANNEX A
OPTION TO ELECT REPAYMENT
The undersigned beneficial owner of the Notes hereby irrevocably elects to have the Trust repay the principal amount of the Notes or portion hereof at the optional repayment price in accordance with the terms of the Notes.
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Date: |
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Signature Sign exactly as name appears on the front of this Note Certificate [SIGNATURE GUARANTEED—required only if Notes are to be issued and delivered to other than the registered Holder] |
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Fill in for registration of Notes if to be issued otherwise than to the registered Holder: |
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Principal amount to be repaid, if amount to be repaid is less than the principal amount of the Notes represented by this Note Certificate (principal amount remaining must be an authorized denomination) |
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$ |
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Name: |
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Address: |
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(Please print name and address including zip code) |
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Social Security or Other Taxpayer ID Number
A-1
SCHEDULE I
AMORTIZATION TABLE
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Payment |
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I-1
Exhibit 4.9
FORM OF DEFINITIVE SECURITY FOR
SECURED MEDIUM TERM NOTES PROGRAM
[FACE OF DEFINITIVE SECURITY]
Unless this Note Certificate is presented by the holder (as defined in the standard indenture terms) or an authorized representative of the holder to the trust (hereinafter defined) or its agent for registration of transfer, exchange or payment, any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered holder hereof has an interest herein.
This Note Certificate is a definitive security within the meaning of the standard indenture terms (hereinafter defined) and is registered in the name of the holder hereof. This Note Certificate is not exchangeable for a global security (as defined in the standard indenture terms).
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CUSIP No.: |
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ISIN: |
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Common Code: |
ALLSTATE LIFE GLOBAL FUNDING TRUST —
SECURED MEDIUM TERM NOTES
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Title of Notes: |
Stated Maturity Date: |
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Principal Amount: $ |
Securities Exchange Listing: o Yes o No. If yes, |
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(or principal amount of foreign or composite currency) |
indicate name(s) of Securities Exchange(s): |
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Original Issue Date: |
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Issue Price: |
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Interest Rate or Formula: |
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Fixed Rate Notes: o Yes o No. If yes, |
Floating Rate Notes: o Yes o No. If yes, |
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Interest Rate: |
Regular Floating Rate Notes: o |
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Interest Payment Dates: |
Floating Rate/Fixed Rate Notes: o |
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Day Count Convention: |
Inverse Floating Rate Notes: o |
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Additional/Other Terms: |
Interest Rate: |
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Amortizing Notes: o Yes o No. If yes, |
Interest Rate Basis(es): |
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Amortization Schedule: |
CD Rate o |
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Additional/Other Terms: |
CMT Rate o |
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Discount Notes: o Yes o No. If yes, |
Commercial Paper Rate o |
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Total Amount of Discount: |
Constant Maturity Swap Rate o |
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Initial Accrual Period of Discount: |
Eleventh District Cost of Funds Rate o |
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Additional/Other Terms: |
EURIBOR o |
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Redemption Provisions: o Yes o No. If yes, |
Federal Funds Rate o |
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Initial Redemption Date: |
LIBOR o |
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Initial Redemption Percentage: |
Prime Rate o |
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Annual Redemption Percentage Reduction, if any: |
Treasury Rate o |
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Additional/Other Terms: |
If LIBOR: |
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Repayment Provisions: o Yes o No. If yes, |
LIBOR Reuters Page: |
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Optional Repayment Date(s): |
LIBOR Currency: |
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Optional Repayment Price: |
If CMT Rate: |
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Additional/Other Terms: |
Designated CMT Reuters Page: |
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Regular Interest Record Date(s): |
If CMT Reuters Page FEDCMT: |
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Sinking Fund, if any: |
o Weekly Average |
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Specified Currency: |
o Monthly Average |
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Exchange Rate Agent: |
Designated CMT Maturity Index: |
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Calculation Agent: |
Index Maturity: |
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Depositary: |
Spread (+/-), if any: |
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Authorized Denominations: |
Spread Multiplier, if any: |
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Collateral: The right, title and interest of the Trust in and to: |
Initial Interest Rate, if any: |
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(i) Allstate Life Insurance Company Funding |
Initial Interest Reset Date: |
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Agreement No(s). — ; (ii) all proceeds in respect of such |
Interest Reset Dates: |
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Funding Agreement(s); and (iii) all books and records |
Interest Determination Date(s): |
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(including, without limitation, computer programs, |
Interest Payment Dates: |
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printouts, and other computer materials and files) |
Maximum Interest Rate, if any: |
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pertaining to such Funding Agreement(s). |
Minimum Interest Rate, if any: |
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Additional Amounts to be Paid for Withholding Tax: |
Fixed Rate Commencement Date, if any: |
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o Yes o No |
Floating Interest Rate, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention: |
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Additional/Other Terms: |
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This Note Certificate is a Definitive Security in respect of a duly authorized issue of Notes (the “Notes”) of the Allstate Life Global Funding Trust designated above, a statutory trust organized under the laws of the State of Delaware (the “Trust”). The Notes are issued under the Indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Indenture”) among the Trust and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Indenture Terms, which are incorporated by reference in and form a part of the Indenture (as amended or supplemented from time to time, the “Standard Indenture Terms”).
The Trust, for value received, hereby promises to pay to the Holder hereof or its registered assigns, on the Stated Maturity Date (or on the date of redemption or repayment by the Trust prior to maturity pursuant to redemption or repayment provisions, in each case, if provided for above) the principal amount specified above and, if so specified above, to pay interest from time to time on the Notes represented by this Note Certificate from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Notes represented by this Note Certificate is paid or made available for payment and to pay such other amounts due and owing with respect to the Notes represented by this Note Certificate.
On any exchange or purchase and cancellation of any of the Notes represented by this Note Certificate, details of such exchange or purchase and cancellation shall be entered in the records of the Indenture Trustee. Upon any such exchange or purchase and cancellation, the principal amount of the Notes represented by this Note Certificate shall be charged by the principal amount so exchanged or purchased and cancelled, as provided in the Standard Indenture Terms.
Unless otherwise set forth above, if the Notes are subject to an Annual Redemption Percentage Reduction as specified above, the Redemption Price of the Notes represented by this Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the Notes represented by this Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
The Notes will mature on the Stated Maturity Date, unless their principal (or, any installment of their principal) becomes due and payable prior to the Stated Maturity Date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of the Trust, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date or any date prior to the Stated Maturity Date on which the Notes
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become due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Notes repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, the Trust will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made on any Interest Payment Date or on a Maturity Date that is not a Business Day shall be made in accordance with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Notes set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Notes as specified above, the Notes shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Notes represented by this Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Indenture Trustee pursuant to the Indenture.
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IN WITNESS WHEREOF, the Trust has caused this instrument to be duly executed on its behalf. |
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Dated: Original Issue Date |
THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE, | |
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as Issuer | |
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By: [WILMINGTON TRUST COMPANY], not in its individual capacity, but solely as Delaware Trustee | |
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By: |
Name: Title: |
CERTIFICATE OF AUTHENTICATION
This Note Certificate is one of the Note Certificates representing Notes described in the within-mentioned Indenture.
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Dated: Original Issue Date |
[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as Indenture Trustee | |
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By: |
Authorized Signatory |
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[REVERSE OF DEFINITIVE SECURITY]
SECTION 1. General. This Note Certificate is a Definitive Security in respect of a duly authorized issue of Notes of the Trust. The Notes are issued pursuant to the Indenture.
SECTION 2. Currency. The Notes are denominated in, and payments of principal of, premium, if any, and interest on, if any, and other amounts in respect of, the Notes will be in the Specified Currency designated on the face hereof. If the Notes are Foreign Currency Notes, any amounts so payable by the Trust in the Specified Currency will be converted by the exchange rate agent designated on the face hereof (the “Exchange Rate Agent”) into United States dollars for payment to the registered holders hereof unless otherwise specified on the face hereof or a registered holder elects, in the manner described below, to receive payments in the Specified Currency.
If the Specified Currency for Foreign Currency Notes is not available for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond the control of the Trust, the Trust will be entitled to satisfy the obligations to the registered holders of such Foreign Currency Notes by making payments in United States dollars based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Trust for the purchase by the quoting dealer of the Specified Currency for United States dollars for settlement on that payment date in the aggregate amount of the Specified Currency payable to all registered holders of such Foreign Currency Notes scheduled to receive United States dollar payments and at which the applicable dealer commits to execute a contract. All currency exchange costs will be borne by the relevant registered holders of such Foreign Currency Notes by deductions from any payments. If three bid quotations are not available, payments will be made in the Specified Currency.
Registered holders of Foreign Currency Notes may elect to receive all or a specified portion of any payment of principal, premium, if any, and/or interest, if any, in the Specified Currency by submitting a written request to the Indenture Trustee at its corporate trust office in The City of New York on or prior to the applicable Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. This written request may be mailed or hand delivered or sent by cable, telex or other form of facsimile transmission. This election will remain in effect until revoked by written notice delivered to the Indenture Trustee on or prior to a Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. Registered holders of Foreign Currency Notes to be held in the name of a broker or nominee should contact their broker or nominee to determine whether and how an election to receive payments in the Specified Currency may be made.
Unless otherwise specified on the face hereof, if the Specified Currency is other than United States dollars, if the Holder hereof elects to receive payments of principal, premium, if any, and/or interest, if any, in the Specified Currency, the Holder must notify the Indenture Trustee of that election on or prior to the fifth Business Day after the applicable Regular Interest Record Date or at least ten calendar days prior to the Maturity Date, as the case may be. If complete instructions are received by the Indenture Trustee on or prior to such dates, then the Holder will receive payments in the Specified Currency.
Unless otherwise specified on the face hereof, if payment in the Specified Currency hereon is not available to the Trust for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond the Trust’s control, then the Trust will be entitled to satisfy its obligations by making payments in United States dollars on the basis of the Market Exchange Rate, computed by the Exchange Rate Agent as described above, on the second Business Day prior to the particular payment or, if the Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate. The “Market Exchange Rate” for a Specified Currency other than United States dollars means the noon dollar buying rate in The City of New York for cable transfers for the Specified Currency as certified for customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New York. Any payment in respect hereof made under such circumstances in U.S. Dollars will not constitute an Event of Default under the Indenture.
In the event that a member state of the European Union in whose national currency is the Specified Currency becomes a participant member in the third stage of the European economic and monetary union, the Trust may on or
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after the date of such occurrence, without the consent of the Holder hereof, redenominate all, but not less than all, of the Notes hereof.
All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder hereof and any applicable Entitlement Holders.
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All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon. |
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SECTION 3. Determination of Interest Rate and Other Payment Provisions. |
Fixed Rate Notes. If the Notes are designated on the face hereof as “Fixed Rate Notes,” the Notes will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Notes will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of Fixed Rate Notes falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Notes. If the Notes are designated on the face hereof as “Discount Notes” (as defined below), payments in respect of the Notes shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of such Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of such Discount Notes, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on such Discount Notes to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Notes occurs for Discount Notes, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for Discount Notes (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to Discount Notes and an assumption that the maturity of such Discount Notes will not be accelerated. If the period from the date of issue to the first Interest Payment Date for Discount Notes (the “Initial Period”) is shorter than the compounding period for such Discount Notes, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. A “Discount Note” is any Note that has an Issue Price that is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Amortizing Notes. If the Notes are specified on the face hereof as “Amortizing Notes,” the Notes shall bear interest at the rate set forth on the face hereof, and payments of principal and interest shall be made as set forth on the face hereof and/or in accordance with SCHEDULE I attached hereto. Unless otherwise specified on the face hereof, interest on the Notes will be computed on the basis of a 360-day year of twelve 30-day months. Payments with respect to Amortizing Notes will be applied first to interest due and payable on the Notes and then to the reduction of the unpaid principal amount of Notes represented by this Note Certificate.
Floating Rate Notes. If the Notes are specified on the face hereof as “Floating Rate Notes,” interest on the Notes shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Eleventh District Cost of Funds Rate Note, Federal Funds Rate Note, LIBOR Note, EURIBOR Note, Prime Rate Note, or Treasury Rate Note. If the Notes are designated on the face hereof as Floating Rate Notes, the face hereof will specify whether the Notes are
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Regular Floating Rate Notes, Inverse Floating Rate Notes or Floating Rate/Fixed Rate Notes. For the period from the date of issue to, but not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Notes are LIBOR Notes or EURIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date. |
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Notes reset daily, each Business Day; (2) if the Notes reset weekly, other than Treasury Rate Notes, the Wednesday of each week; (3) if the Notes are Treasury Rate Notes that reset weekly, and except as provided below under “Treasury Rate Notes,” the Tuesday of each week; (4) if the Notes reset monthly, the third Wednesday of each month, unless the Eleventh District Cost of Funds Rate is the Interest Rate Basis (as defined below) applicable to the Notes, in which case the Notes will reset the first calendar day of the month; (5) if the Notes reset quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Notes reset semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Notes reset annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to Floating Rate/ Fixed Rate Notes, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of Floating Rate Notes as to which the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an applicable Interest Rate Basis, or by the actual number of days in the year, in the case of Floating Rate Notes as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for Floating Rate Notes as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Calculation Date (as defined below). |
“Calculation Date” means the date by which the Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be.
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of United States dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards). |
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(E) |
Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if any Interest Payment Date (other than the Maturity Date for the Notes) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Notes are LIBOR Notes or EURIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if the Maturity Date of the Notes falls on a day this is not a Business Day, the Trust will make the required payment of principal, premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day. |
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Notes is daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof; (2) if the Interest Reset Date for the Notes is quarterly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (3) if the Interest Reset Date for the Notes is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof; or (4) if the Interest Reset Date for the Notes is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, the Maturity Date will also be an Interest Payment Date.
If specified on the face hereof, the Notes may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Notes are designated on the face hereof as Floating Rate Notes, the interest rate on Notes shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Notes and neither the Indenture Trustee nor the Calculation Agent shall have any liability to the Holder of the Notes in respect of any determination, calculation, quote or rate made or provided by the Calculation Agent. Upon request of the Holder of the Notes, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Notes. If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, the Trust will appoint a successor to act as such in its place. The Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Notes on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the
8
“Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Notes. If the Interest Rate Basis is the CD Rate, the Notes shall be deemed to be “CD Rate Notes.” CD Rate Notes will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate under the heading “CDs (secondary market)”; or (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the word-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
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(B) |
CMT Rate Notes. If the Interest Rate Basis is the CMT Rate, the Notes shall be deemed to be “CMT Rate Notes.” CMT Rate Notes will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day preceding the Interest Reset Date. |
“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and
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for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in
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H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Notes. If the Interest Rate Basis is the Commercial Paper Rate, the Notes shall be deemed to be “Commercial Paper Rate Notes.” Commercial Paper Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the
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applicable Index Maturity as such rate is published in H.15(519) under the heading “Commercial Paper—Nonfinancial”; or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not published by 3:00 P.M., New York City time, on the Calculation Date, then the Commercial Paper Rate as calculated by the Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Calculation Agent are not rates as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 360 - (D x M) |
x 100 |
where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. |
“Constant Maturity Swap Rate” means: (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City time, on the particular Interest Determination Date; or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative
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Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.
“Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Calculation Agent, after consultation with Allstate Life.
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(E) |
Eleventh District Cost of Funds Rate Notes. If the Interest Rate Basis is the Eleventh District Costs of Funds Rate, the Notes shall be deemed to be “Eleventh District Cost of Funds Rate Notes.” Eleventh District Cost of Funds Notes will bear interest at the interest rate calculated with reference to the Eleventh District Cost of Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Eleventh District Cost of Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the last working day of the month immediately preceding the related Interest Reset Date on which the Federal Home Loan Bank of San Francisco publishes the Eleventh District Index (as defined below). |
The “Eleventh District Cost of Funds Rate” means: (1) the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which the particular Interest Determination Date falls as set forth under the caption “11th District” on the display on Reuters (or any successor service) on page COFI/ARMS (or any other page as may replace the specified page on that service) (“Reuters Page COFI/ARMS”) as of 11:00 A.M., San Francisco time, on that Interest Determination Date; or (2) if the rate referred to in clause (1) does not so appear on Reuters Page COFI/ARMS, the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the “Eleventh District Index”) by the Federal Home Loan Bank of San Francisco as the cost of funds for the calendar month immediately preceding that Interest Determination Date; or (3) if the Federal Home Loan Bank of San Francisco fails to announce the Eleventh District Index on or prior to the particular Interest Determination Date for the calendar month immediately preceding that Interest Determination Date, the Eleventh District Cost of Funds Rate in effect on the particular Interest Determination Date; provided that if no Eleventh District Cost of Funds Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
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(F) |
EURIBOR Notes. If the Interest Rate Basis is EURIBOR (as defined below), the Notes shall be deemed to be “EURIBOR Notes.” EURIBOR Notes will bear interest at the rates (calculated with references to the European inter-bank offered rate for deposits in Euro, or “EURIBOR”, and the Spread and/or Spread Multiplier, if any) specified on the face hereof. |
“EURIBOR” means, with respect to any Interest Determination Date relating to EURIBOR Notes or Notes that bear interest at floating rates for which the interest rate is determined with reference to EURIBOR (a “EURIBOR Interest Determination Date”),
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the rate for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI—The Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, as the rate appears on Reuters, or any successor service, on page EURIBOR 01 (or any other page as may replace that specified page on the service) (“Reuters Page EURIBOR 01”) as of 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date. If such rate does not appear on Reuters Page EURIBOR 01, or is not so published by 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date, such rate will be calculated by the Calculation Agent and will be the arithmetic mean of at least two quotations obtained by the Calculation Agent after requesting the principal Euro-zone (as defined below) offices of four major banks in the Euro-zone interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in Euros for the period of the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euro in the market at that time. If fewer than two such quotations are so provided, the rate on the applicable EURIBOR Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date by four major banks in the Euro-zone selected by the Calculation Agent (after consultation with Allstate Life) for loans in Euro to leading European banks, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euros in the market at that time. If the banks so selected by the Calculation Agent are not quoting as mentioned above, EURIBOR will be EURIBOR in effect on the applicable EURIBOR Interest Determination Date; provided that if no EURIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Euro-zone” means the region comprised of member states of the European Union that have adopted the single currency in accordance with the Treaty Establishing the European Community, as amended by the Treaty on European Union.
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(G) |
Federal Funds Rate Notes. If the Interest Rate Basis is the Federal Funds Rate, the Notes shall be deemed to be “Federal Funds Rate Notes.” Federal Funds Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page
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FEDFUNDS1.
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(H) |
LIBOR Notes. If the Interest Rate Basis is LIBOR (as defined below), the Notes shall be deemed to be “LIBOR Notes.” LIBOR Notes will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day preceding the related Interest Reset Date. |
“LIBOR” means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(I) |
Prime Rate Notes. If the Interest Rate Basis is the Prime Rate, the Notes shall be deemed to be “Prime Rate Notes.” Prime Rate Notes will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Prime Rate” means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation
15
Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date; or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent(after consultation with Allstate Life); or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate. “Reuters Screen US PRIME 1 Page” means the display on Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks.
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(J) |
Treasury Rate Notes. If the Interest Rate Basis is the Treasury Rate, the Notes shall be deemed to be “Treasury Rate Notes.” Treasury Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below). |
“Treasury Rate” means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury; or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately
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3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent(after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof; or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N 360 - (D x M) |
x 100 |
where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(K) |
Regular Floating Rate Notes. Unless the Notes are designated as Floating Rate/Fixed Rate Notes or Inverse Floating Rate Notes, or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, such Notes that bear interest at floating rates will be Regular Floating Rate Notes and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on Regular Floating Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(L) |
Floating Rate/Fixed Rate Notes. If the Notes are designated as “Floating Rate/Fixed Rate Notes” on the face hereof, such Notes that bear interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on Floating Rate/Fixed Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
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(M) |
Inverse Floating Rate Notes. If the Notes are designated as “Inverse Floating Rate Notes” on the face hereof, the Inverse Floating Rate shall be equal to the Fixed Interest Rate minus the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any; provided, however, that interest on Inverse Floating Rate Notes will not be less than zero. Commencing on the first Interest Reset Date, the rate at which interest on Inverse Floating Rate Notes is payable will be reset as of each Interest |
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Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate.
SECTION 4. Optional Redemption. Except in the case of Discount Notes, if an Initial Redemption Date is specified on the face hereof, the Trust may redeem the Notes prior to the Stated Maturity Date at its option on any Business Day on or after the Initial Redemption Date in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof (provided that any remaining principal amount of the Notes shall be at least $1,000 or other minimum authorized denomination applicable thereto), at the applicable Redemption Price (as defined below), together with unpaid interest accrued on the Notes, any Additional Amounts and other amounts payable with respect thereto to the date of redemption. The Trust must give written notice to the Holders of the Notes to be redeemed at its option not more than 60 nor less than 30 calendar days prior to the date of redemption. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of Notes represented by this Note Certificate to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount thereof to be redeemed.
SECTION 5. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face hereof or unless the Notes are Amortizing Notes, the Notes will not be subject to any sinking fund. If it is specified on the face hereof that the Notes are Amortizing Notes, the Trust will make payments combining principal and interest on the dates and in the amounts set forth in the table appearing in SCHEDULE I, attached to this Note Certificate. If the Notes are Amortizing Notes, payments made on the Notes will be applied first to interest due and payable on each such payment date and then to the reduction of the unpaid principal amount.
SECTION 6. Optional Repayment. If so specified on the face hereof, the Notes will be subject to repayment by the Trust at the option of the Holder of the Notes on the Optional Repayment Date(s) specified on the face hereof, in whole or in part in increments of U.S.$1,000 (provided that any remaining principal amount of the Notes shall be at least U.S.$1,000), at a repayment price equal to 100% of the unpaid principal amount of the Notes to be repaid, together with unpaid interest accrued thereon to the Repayment Date (as defined below). For the Notes to be so repaid, the Indenture Trustee must receive at its corporate trust office not more than 60 nor less than 30 calendar days prior to the applicable Optional Repayment Date, a properly completed Option to Elect Repayment form, which is attached hereto as Annex A, forwarded by the Holder hereof. Exercise of such repayment option shall be irrevocable. As used herein, the term “Repayment Date” shall mean the date fixed for repayment in accordance with the repayment provisions specified above.
SECTION 7. Modifications and Amendments. Sections9.1 and 9.2 of the Standard Indenture Terms contain provisions permitting the Trust and the Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Indentures for limited purposes and take other actions set forth in the Standard Indenture Terms, and (2) with the consent of the Holders of not less than 662/3% in aggregate principal amount of Notes at the time outstanding, evidenced as in the Standard Indenture Terms, to execute Supplemental Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or any Supplemental Indenture or modifying in any manner the rights of the Holders of the Notes subject to specified limitations.
SECTION 8. Obligations Unconditional. No reference herein to the Indenture or the Standard Indenture Terms and no provision of the Notes or of the Indenture shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Notes at the places, at the respective times, at the rate, and in the coin or currency, herein prescribed.
SECTION 9. Collateral. Pursuant to the Indenture, the Trust will grant a security interest in, pledge and collaterally assign the Collateral specified on the face hereof to the Indenture Trustee on behalf of the holders of the Notes and any other person for whose benefit the Indenture Trustee is or will be holding the Collateral. The Notes will be secured by a first priority perfected security interest in the Collateral in favor of the Indenture Trustee and the other persons identified in the Standard Indenture Terms.
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SECTION 10. Security; Limited Recourse. The Notes are solely the obligations of the Trust, and will not be guaranteed by any person, including but not limited to Allstate Life, Allstate Life Global Funding, any Agent, the Trust Beneficial Owner, the Delaware Trustee, the Indenture Trustee or any of their affiliates. The Trust’s obligations under the Notes will be secured by all of the Trust’s rights and title in one or more Funding Agreement(s) issued by Allstate Life and other rights and assets included in the applicable Collateral. The Holder of the Notes has no direct contractual rights against Allstate Life under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to Allstate Life will belong to the Trust, its successors and permitted assignees. The Trust has pledged, collaterally assigned and granted a first priority perfected security interest in the Collateral for the Notes to the Indenture Trustee on behalf of the Holders of the Notes and the other persons identified in the Standard Indenture Terms. Recourse to Allstate Life under each Funding Agreement will be enforceable only by the Indenture Trustee as a secured party on behalf of the Holders of Notes and the other persons identified in the Standard Indenture Terms.
SECTION 11. Events of Default. In case an Event of Default, as defined in the Standard Indenture Terms, shall have occurred and be continuing, the principal of the Notes may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. If the Notes are Discount Notes, the amount of principal of the Notes that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 12. Withholding; Additional Amounts; Tax Event. All amounts due in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax payments on the Notes unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, the Trust will not pay any additional amounts (“Additional Amounts”) to Holders of the Notes in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem the Notes. If the Trust is required to pay Additional Amounts pursuant to the applicable provisions of the Standard Indenture Terms and unless otherwise specified herein, the Trust shall give a notice of redemption to each Holder of the Notes to be redeemed not more than 75 days nor less than 30 days prior to the Redemption Date; provided that no such notice of redemption may be given earlier than 90 days prior to the earliest day on which the Trust would become obligated to pay the applicable Additional Amounts were a payment in respect of the Notes then due. Failure to give such notice to the Holder of any Note designated for redemption in whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Note or any portion thereof. “Tax Event” means that the Trust shall have become required at any time to pay Additional Amounts or if the Trust is obligated to withhold or deduct any United States taxes with respect to any payment under the Notes or if there is a material probability that the Trust will become obligated to withhold or deduct any such United States taxes or otherwise pay Additional Amounts (in the opinion of independent legal counsel selected by Allstate Life), in each case pursuant to any change in or amendment to any United States tax laws (or any regulations or rulings thereunder) or any change in position of the Internal Revenue Service regarding the application or interpretation thereof (including, but not limited to, Allstate Life’s or the Trust’s receipt of a written adjustment from the Internal Revenue Service in connection with an audit).
SECTION 13. Listing. Unless otherwise specified on the face hereof, the Notes will not be listed on any securities exchange.
SECTION 14. No Recourse Against Certain Persons. No recourse shall be had for the payment of the principal of or the interest on the Notes, or for any claim based hereon, or otherwise in respect thereof, or based on or in respect of the Indenture or any Supplemental Indenture, against the Nonrecourse Parties, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such personal liability being, by the acceptance of any Notes and as part of the consideration for issue of the Notes, expressly waived and released.
SECTION 15. Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
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ANNEX A
OPTION TO ELECT REPAYMENT
The undersigned Holder of the Notes hereby irrevocably elects to have the Trust repay the principal amount of the Notes or portion hereof at the optional repayment price in accordance with the terms of the Notes.
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Date: |
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Signature Sign exactly as name appears on the front of this Note Certificate [SIGNATURE GUARANTEED—required only if Notes are to be issued and delivered to other than the registered Holder] | |
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Fill in for registration of Notes if to be issued otherwise than to the registered Holder: | |
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Principal amount to be repaid, if amount to be repaid is less than the principal amount of the Notes represented by this Note Certificate (principal amount remaining must be an authorized denomination) |
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$ |
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Name: |
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Address: |
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(Please print name and address including zip code) |
Social Security or Other Taxpayer ID Number
A-1
SCHEDULE I
AMORTIZATION TABLE
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Payment |
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I-1
EXHIBIT 4.10
FORM OF GLOBAL SECURITY FOR
ALLSTATE LIFE® CORENOTES® PROGRAM
[FACE OF GLOBAL SECURITY]
Unless this Note Certificate is presented by an authorized representative of the Depository Trust Company, a New York corporation (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), 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.
This Note Certificate is a global security within the meaning of the standard indenture terms hereinafter referred to and is registered in the name of Cede & Co., or such other nominee of DTC, or any successor depositary (“Depositary”), as requested by an authorized representative of the Depositary. The notes represented by this Note Certificate may not be exchanged in whole or in part for notes registered, and no transfer of the notes represented by this Note Certificate in whole or in part may be registered, in the name of any person other than the Depositary or a nominee thereof, except in the limited circumstances described in the standard indenture terms. Every Note Certificate authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, this Note Certificate will be a global security subject to the foregoing, except in such limited circumstances.
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CUSIP No.: |
ALLSTATE LIFE GLOBAL FUNDING TRUST --
ALLSTATE LIFE®CORENOTES®
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Title of Notes: |
Stated Maturity Date: |
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Principal Amount: $ |
Securities Exchange Listing: o Yes o No. If yes, |
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Original Issue Date: |
indicate name(s) of Securities Exchange(s): |
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Issue Price: |
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Interest Rate or Formula: |
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Fixed Rate Notes: o Yes o No. If yes, |
Floating Rate Notes: o Yes o No. If yes, |
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Interest Rate: |
Regular Floating Rate Notes: o |
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Interest Payment Dates: |
Floating Rate/Fixed Rate Notes: o |
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Day Count Convention: |
Interest Rate: |
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Additional/Other Terms: |
Interest Rate Basis(es): |
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Discount Notes: o Yes o No. If yes, |
CD Rate o |
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Total Amount of Discount: |
CMT Rate o |
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Initial Accrual Period of Discount: |
Commercial Paper Rate o |
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Additional/Other Terms: |
Constant Maturity Swap Rate o |
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Redemption Provisions: o Yes o No. If yes, |
Federal Funds Rate o |
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Initial Redemption Date: |
LIBOR o |
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Initial Redemption Percentage: |
Prime Rate o |
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Annual Redemption Percentage |
Treasury Rate o |
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Additional/Other Terms: |
If LIBOR: |
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Survivor’s Option: o Yes o No. |
LIBOR Reuters Page: |
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Regular Interest Record Date(s): |
LIBOR Currency: |
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Sinking Fund: |
If CMT Rate: |
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Calculation Agent: |
Designated CMT Reuters Page: |
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Depositary: |
If CMT Reuters Page FEDCMT: |
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Authorized Denominations: |
o Weekly Average |
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o Monthly Average |
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Collateral: The right, title and interest of the Trust in and to: |
Designated CMT Maturity Index: |
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(i) Allstate Life Insurance Company Funding |
Index Maturity: |
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Agreement No(s). -- ; (ii) all proceeds in respect of such |
Spread (+/-), if any: |
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Funding Agreement(s); and (iii) all books and records |
Spread Multiplier, if any: |
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(including, without limitation, computer programs, |
Initial Interest Rate, if any: |
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printouts, and other computer materials and files) |
Initial Interest Reset Date: |
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pertaining to such Funding Agreement(s). |
Interest Reset Dates: |
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Interest Determination Date(s): |
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Interest Payment Dates: |
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Maximum Interest Rate, if any: |
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Minimum Interest Rate, if any: |
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Fixed Rate Commencement Date, if any: |
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Floating Interest Rate, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention: |
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Additional/Other Terms: |
“Allstate Life®” is a registered servicemark of Allstate Insurance Company. “CoreNotes®” is a registered servicemark of Merrill Lynch & Co., Inc.
This Note Certificate is a Global Security in respect of a duly authorized issue of Notes (the “Notes”) of the Allstate Life Global Funding Trust designated above, a statutory trust organized under the laws of the State of Delaware (the “Trust”). The Notes are issued under the Indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Indenture”) among the Trust and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Indenture Terms, which are incorporated by reference in and form a part of the Indenture (as amended or supplemented from time to time, the “Standard Indenture Terms”).
The Trust, for value received, hereby promises to pay to [Cede & Co.] or its registered assigns on the Stated Maturity Date (or on the date of redemption or repayment by the Trust prior to maturity pursuant to redemption or repayment provisions, in each case, if provided for above) the principal amount specified above and, if so specified above, to pay interest from time to time on the Notes represented by this Note Certificate from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Notes represented by this Note Certificate is paid or made available for payment and to pay such other amounts due and owing with respect to the Notes represented by this Note Certificate.
On any exchange or purchase and cancellation of any of the Notes represented by this Note Certificate, details of such exchange or purchase and cancellation shall be entered in the records of the Indenture Trustee. Upon any such exchange or purchase and cancellation, the principal amount of the Notes represented by this Note Certificate shall be charged by the principal amount so exchanged or purchased and cancelled, as provided in the Standard Indenture Terms.
Unless otherwise set forth above, if the Notes are subject to an Annual Redemption Percentage Reduction as specified above, the Redemption Price of the Notes represented by this Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the Notes represented by this Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
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The Notes will mature on the Stated Maturity Date, unless their principal (or, any installment of their principal) becomes due and payable prior to the Stated Maturity Date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of the Trust, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date or any date prior to the Stated Maturity Date on which the Notes become due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Notes repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, the Trust will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made on any Interest Payment Date or on a Maturity Date that is not a Business Day shall be made in accordance with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Notes set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Notes as specified above, the Notes shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Notes represented by this Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Indenture Trustee pursuant to the Indenture.
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IN WITNESS WHEREOF, the Trust has caused this instrument to be duly executed on its behalf. |
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Dated: Original Issue Date |
THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE, | |
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as Issuer | |
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By: [WILMINGTON TRUST COMPANY], not in its individual capacity, but solely as Delaware Trustee | |
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By: |
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Name: Title: |
CERTIFICATE OF AUTHENTICATION
This Note Certificate is one of the Note Certificates representing Notes described in the within-mentioned Indenture.
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Dated: Original Issue Date |
[THE BANK OF NEW YORK TRUST COMPANY, N.A.], | |
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as Indenture Trustee | |
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By: |
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Authorized Signatory |
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[REVERSE OF GLOBAL SECURITY]
SECTION 1. General. This Note Certificate is a Global Security in respect of a duly authorized issue of Notes of the Trust. The Notes are issued pursuant to the Indenture.
SECTION 2. Currency. The Notes are denominated in, and payments of principal, premium, if any, and/or interest, if any, will be made in U.S. dollars.
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SECTION 3. Determination of Interest Rate and Other Payment Provisions. |
Fixed Rate Notes. If the Notes are designated on the face hereof as “Fixed Rate Notes,” the Notes will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Notes will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of Fixed Rate Notes falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Notes. If the Notes are designated on the face hereof as “Discount Notes” (as defined below), payments in respect of the Notes shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of such Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of such Discount Notes, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on such Discount Notes to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Notes occurs for Discount Notes, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for Discount Notes (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to Discount Notes and an assumption that the maturity of such Discount Notes will not be accelerated. If the period from the date of issue to the first Interest Payment Date for Discount Notes (the “Initial Period”) is shorter than the compounding period for such Discount Notes, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. A “Discount Note” is any Note that has an Issue Price that is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Floating Rate Notes. If the Notes are specified on the face hereof as “Floating Rate Notes,” interest on the Notes shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Federal Funds Rate Note, LIBOR Note, Prime Rate Note or Treasury Rate Note. If the Notes are designated on the face hereof as Floating Rate Notes, the face hereof will specify whether the Notes are Regular Floating Rate Notes or Floating Rate/Fixed Rate Notes. For the period from the date of issue to, but not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Notes |
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are LIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date.
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Notes reset daily, each Business Day; (2) if the Notes reset weekly, other than Treasury Rate Notes, the Wednesday of each week; (3) if the Notes are Treasury Rate Notes that reset weekly, and except as provided below under “Treasury Rate Notes,” the Tuesday of each week; (4) if the Notes reset monthly, the third Wednesday of each month; (5) if the Notes reset quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Notes reset semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Notes reset annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to Floating Rate/ Fixed Rate Notes, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of Floating Rate Notes as to which the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis (as defined below), or by the actual number of days in the year, in the case of Floating Rate Notes as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for Floating Rate Notes as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Calculation Date (as defined below). |
“Calculation Date” means the date by which the Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of: (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be.
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded to the nearest cent. |
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(E) |
Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if any Interest Payment Date (other than the Maturity Date for the Notes) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Notes are LIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if |
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the Notes are designated on the face hereof as Floating Rate Notes, if the Maturity Date of the Notes falls on a day this is not a Business Day, the Trust will make the required payment of principal, premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Notes is daily, weekly or monthly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof; (2) if the Interest Reset Date for the Notes is quarterly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (3) if the Interest Reset Date for the Notes is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof; (4) if the Interest Reset Date for the Notes is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, interest will also be payable on the Maturity Date.
If specified on the face hereof, the Notes may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Notes are designated on the face hereof as Floating Rate Notes, the interest rate on Notes shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Notes and neither the Indenture Trustee nor the Calculation Agent shall have any liability to the Holder of the Notes in respect of any determination, calculation, quote or rate made or provided by the Calculation Agent. Upon request of the Holder of the Notes, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Notes. If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, the Trust will appoint a successor to act as such in its place. The Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Notes on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the “Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Notes. If the Interest Rate Basis is the CD Rate, the Notes shall be deemed to be “CD Rate Notes.” CD Rate Notes will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest
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Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate under the heading “CDs (secondary market)”; or (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
(B) CMT Rate Notes. If the Interest Rate Basis is the CMT Rate, the Notes shall be deemed to be “CMT Rate Notes.” CMT Rate Notes will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day preceding the Interest Reset Date.
“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the
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Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event
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of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Notes. If the Interest Rate Basis is the Commercial Paper Rate, the Notes shall be deemed to be “Commercial Paper Rate Notes.” Commercial Paper Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as such rate is published in H.15(519) under the heading “Commercial Paper—Nonfinancial;” or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not published by 3:00 P.M., New York City time, on the Calculation Date, then the Commercial Paper Rate as calculated by the Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular
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Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 |
x 100 |
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360 - (D x M) |
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where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. |
Constant Maturity Swap Rate” means: (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City time, on the particular Interest Determination Date; or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
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“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.
“Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Calculation Agent, after consultation with Allstate Life.
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(E) |
Federal Funds Rate Notes. If the Interest Rate Basis is the Federal Funds Rate, the Notes shall be deemed to be “Federal Funds Rate Notes.” Federal Funds Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page FEDFUNDS1.
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(F) |
LIBOR Notes. If the Interest Rate Basis is LIBOR (as defined below), the Notes shall be deemed to be “LIBOR Notes.” LIBOR Notes will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day (as defined below) preceding the related Interest Reset Date. |
“LIBOR” means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the
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particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(G) |
Prime Rate Notes. If the Interest Rate Basis is the Prime Rate, the Notes shall be deemed to be “Prime Rate Notes.” Prime Rate Notes will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Prime Rate” means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date; or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent(after consultation with Allstate Life); or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Reuters Screen US PRIME 1 Page” means the display on Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks.
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(H) |
Treasury Rate Notes. If the Interest Rate Basis is the Treasury Rate, the Notes shall be deemed to be “Treasury Rate Notes.” Treasury Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below). |
“Treasury Rate” means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury; or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent(after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof; or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N |
x 100 |
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360 - (D x M) |
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where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the
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following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(I) |
Regular Floating Rate Notes. Unless the Notes are designated as Floating Rate/Fixed Rate Notes or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, such Notes that bear interest at floating rates will be Regular Floating Rate Notes and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on Regular Floating Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(J) |
Floating Rate/Fixed Rate Notes. If the Notes are designated as “Floating Rate/Fixed Rate Notes” on the face hereof, such Notes that bear interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on Floating Rate/Fixed Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
SECTION 4. Optional Redemption. Except in the case of Discount Notes, if an Initial Redemption Date is specified on the face hereof, the Trust may redeem the Notes prior to the Stated Maturity Date at its option on any Business Day on or after the Initial Redemption Date in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof (provided that any remaining principal amount of the Notes shall be at least $1,000 or other minimum authorized denomination applicable thereto), at the applicable Redemption Price (as defined below), together with unpaid interest accrued on the Notes, any Additional Amounts and other amounts payable with respect thereto to the date of redemption. The Trust must give written notice to the Holders of the Notes to be redeemed at its option not more than 60 nor less than 30 calendar days prior to the date of redemption. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of Notes represented by this Note Certificate to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount thereof to be redeemed.
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SECTION 5. Repayment Provisions. |
If the face of this Note Certificate specifies that “Survivor’s Option” (as defined below) applies, the person (the “Authorized Representative”) who has legal authority to act on behalf of the estate of the deceased owner of a beneficial interest in the Notes represented hereby shall have the option to elect repayment of the Notes in whole or in part in increments of U.S.$1,000 (provided that any remaining principal amount of the Notes shall be at least U.S.$1,000), following the death of such beneficial owner (a “Survivor’s Option”). No Survivor’s Option may be exercised unless such beneficial interest was held by the beneficial owner for a period of at least six months prior to the death of the beneficial owner.
Pursuant to the valid exercise of the Survivor’s Option, if applicable, the Trust shall repay the Notes represented hereby (or portion thereof) at a price equal to 100% of the unpaid principal amount of the Notes to be repaid, together with unpaid interest accrued thereon to, but excluding, the Repayment Date, subject to the limitations in the next succeeding sentence. Allstate Life may, in its sole discretion, limit the aggregate principal amount of (i) all Funding Agreements securing all outstanding series of notes issued under the Allstate Life® CoreNotes® program as to which exercises of any put option by any issuing trust shall be accepted by Allstate Life in any calendar year to an
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amount equal to the greater of $2,000,000 or 2% of the aggregate principal amount of all Funding Agreements securing all outstanding series of notes issued under the Allstate Life® CoreNotes® program as of the end of the most recent calendar year or such other greater amount as determined in accordance with the applicable Funding Agreement(s) and set forth on the face hereof; (ii) the Funding Agreement(s) securing the Notes as to which exercises of any put option by the Trust attributable to Notes as to which the Survivor’s Option has been exercised by the Authorized Representative of any individual deceased beneficial owner to $250,000 in any calendar year or such other greater amount as determined in accordance with the applicable Funding Agreement(s) and set forth on the face hereof; and (iii) the Funding Agreement(s) securing the Notes as to which exercises of any put option by the Trust shall be accepted in any calendar year to an amount as set forth in the applicable Funding Agreement(s) and on the face hereof.
In any such event, the Trust shall similarly be required to limit the aggregate principal amount of Notes as to which exercises of the Survivor’s Option shall be accepted by it.
Each election to exercise the Survivor’s Option shall be effected in the order received by the Administrator. Notes that are not repaid in any calendar year due to the application of the limits described above will be treated as though they had been tendered on the first day of the following calendar year in the order in which they were originally tendered. Subject to the limitations described above, Notes accepted for repayment will be repaid on the first interest payment date that occurs 20 or more calendar days after the date of the acceptance unless that interest payment date is not a Business Day, in which case the repayment date will be the next succeeding Business Day.
To exercise the Survivor’s Option, the Authorized Representative must provide to the DTC participant (the “Participant”) through which the relevant beneficial interest is owned (i) a written instruction to notify the Depositary of the Authorized Representative’s desire to exercise the Survivor’s Option, (ii) appropriate evidence (A) that the person has authority to act on behalf of the deceased owner, (B) of the death of a owner of beneficial interest in the Notes represented hereby, (C) that the deceased was the beneficial owner of the Notes at the time of death and (D) that the deceased was the owner of a beneficial interest in the Notes represented hereby at least six months prior to the date of death of such beneficial owner, (iii) if beneficial interest in the Notes represented hereby is held by a nominee of the deceased owner, a certificate from the nominee attesting to the deceased owner’s ownership of a beneficial interest in the Notes represented hereby, (iv) a written request for repayment, substantially in the form of the attached Election Repayment Form”, signed by the Authorized Representative for the deceased owner with signature guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, (v) if applicable, a properly executed assignment or endorsement, (vi) tax waivers and any other instruments or documents reasonably required to establish the validity of the deceased’s beneficial ownership in the Notes and the Authorized Representative’s entitlement to payment and (vii) any additional information reasonably required to document ownership or authority to exercise the Survivor’s Option and to cause the repayment of the Notes (or portion thereof). Such Participant shall provide to the Indenture Trustee a properly completed Repayment Election Form, which is attached hereto as Annex A, to exercise the Survivor’s Option, together with evidence satisfactory to the Indenture Trustee from the Participant stating that it represents the deceased owner of the beneficial interest in the Notes represented hereby.
Subject to Allstate Life’s right hereunder to limit the aggregate principal amount of Funding Agreements securing notes as to which exercises of any put option by the issuing trusts attributable to notes as to which exercises of the Survivor’s Option shall be accepted in any one calendar year, all questions as to the eligibility or validity of any exercise of the Survivor’s Option will be determined by the Administrator, in its sole discretion. The Administrator’s determination shall be final and binding.
The death of a person owning a Note or beneficial interest therein in joint tenancy or tenancy by the entirety with another person or persons shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note, and the entire principal amount of such Note or beneficial interest therein shall be eligible for repayment pursuant to the Survivor’s Option. The death of a person owning a Note or beneficial interest therein by tenancy in common shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note only to the extent of the interest of the deceased Holder or beneficial owner in such Note unless such Note or beneficial interest therein is held by husband and wife as tenants in common, in which case, the death of either spouse shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note, and the entire principal amount of such Note or beneficial interest therein shall be eligible for repayment pursuant to the Survivor’s Option.
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The death of a person who, during his or her lifetime, was entitled to substantially all of the interests of beneficial ownership of a Note shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note if such interests can be established to the satisfaction of the Administrator.
In the event of repayment of the Notes in part only, a new Note Certificate of like tenor in a principal amount equal to the unrepaid portion of principal of Notes represented by this Note Certificate and otherwise having the same terms and provisions as the Notes shall be issued by the Trust in the name of the Holder of this Note Certificate upon the presentation and surrender of this Note Certificate.
SECTION 6. Sinking Fund. Unless otherwise specified on the face hereof, the Notes will not be subject to any sinking fund.
SECTION 7. Registration, Transfer And Exchange. As provided in the Standard Indenture Terms and subject to certain limitations therein and herein set forth, the transfer of the Notes represented by this Note Certificate is registrable in the records of the Registrar. Upon surrender of this Note Certificate for registration of transfer at the office or agency of the Trust in any place where the principal of and interest on the Notes are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trust and the Registrar duly executed by, the Holder or by his or her attorney duly authorized in writing, and thereupon one or more new Note Certificates having the same terms and provisions, in authorized denominations and for the same aggregate principal amount, will be issued by the Trust to the designated transferee or transferees.
As provided in the Standard Indenture Terms and subject to certain limitations therein and herein set forth, the Notes represented by this Note Certificate are exchangeable for a like aggregate principal amount of Notes in authorized denominations but otherwise having the same terms and provisions, as requested by the Holder of this Note Certificate surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Trust or Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note Certificate for registration of transfer, the Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee may treat the Holder as the owner of the Notes for all purposes, including receiving payment of principal of and interest on the Notes, whether or not the Notes be overdue, and neither the Trust, the Indenture Trustee nor any such agent shall be affected by notice to the contrary, except as required by law.
SECTION 8. Certificated Notes. Under certain circumstances described in the Standard Indenture Terms, the Trust will issue Certificated Notes in exchange for the Book-Entry Notes represented by a Global Security. The Certificated Notes issued in exchange for any Book-Entry Notes represented by a Global Security shall be of like tenor and of an equal aggregate principal amount, in authorized denominations. Such Certificated Notes shall be registered in the name or names of such person or persons as the Depositary shall instruct the Registrar.
SECTION 9. Modifications and Amendments. Sections [9.1 and 9.2] of the Standard Indenture Terms contain provisions permitting the Trust and the Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Indentures for limited purposes and take other actions set forth in the Standard Indenture Terms, and (2) with the consent of the Holders of not less than 662/3% in aggregate principal amount of Notes at the time outstanding, evidenced as in the Standard Indenture Terms, to execute Supplemental Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or any Supplemental Indenture or modifying in any manner the rights of the Holders of the Notes subject to specified limitations.
SECTION 10. Obligations Unconditional. No reference herein to the Indenture or the Standard Indenture Terms and no provision of the Notes or of the Indenture shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Notes at the places, at the respective times, and at the rate herein prescribed.
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SECTION 11. Collateral. Pursuant to the Indenture, the Trust will grant a security interest in, pledge and collaterally assign the Collateral specified on the face hereof to the Indenture Trustee on behalf of the holders of the Notes and any other person for whose benefit the Indenture Trustee will be holding the Collateral. The Notes will be secured by a first priority perfected security interest in the Collateral in favor of the Indenture Trustee and the other persons identified in the Standard Indenture Terms
SECTION 12. Security; Limited Recourse. The Notes are solely the obligations of the Trust, and will not be guaranteed by any person, including but not limited to Allstate Life, Allstate Life Global Funding, any Agent, the Trust Beneficial Owner, the Delaware Trustee, the Indenture Trustee or any of their affiliates. The Trust’s obligations under the Notes will be secured by all of the Trust’s rights and title in one or more Funding Agreement(s) issued by Allstate Life and other rights and assets included in the applicable Collateral. The Holder of the Notes has no direct contractual rights against Allstate Life under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to Allstate Life will belong to the Trust, its successors and permitted assignees. The Trust has pledged, collaterally assigned and granted a first priority perfected security interest in the Collateral for the Notes to the Indenture Trustee on behalf of the Holders of the Notes and the other persons identified in the Standard Indenture Terms. Recourse to Allstate Life under each Funding Agreement will be enforceable only by the Indenture Trustee as a secured party on behalf of the Holders of Notes and the other persons identified in the Standard Indenture Terms.
SECTION 13. Events Of Default. In case an Event of Default, as defined in the Standard Indenture Terms, shall have occurred and be continuing, the principal of the Notes may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. If the Notes are Discount Notes, the amount of principal of the Notes that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 14. Withholding; Additional Amounts; Tax Event. All amounts due in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax on payments on the Notes unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, the Trust will not pay any additional amounts (“Additional Amounts”) to Holders of the Notes in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem the Notes.
SECTION 15. Listing. Unless otherwise specified on the face hereof, the Notes will not be listed on any securities exchange.
SECTION 16. No Recourse Against Certain Persons. No recourse shall be had for the payment of the principal of or the interest on the Notes, or for any claim based hereon, or otherwise in respect thereof, or based on or in respect of the Indenture or any Supplemental Indenture, against the Nonrecourse Parties, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such personal liability being, by the acceptance of any Notes and as part of the consideration for issue of the Notes, expressly waived and released.
SECTION 17. Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Note Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
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TEN COM |
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as tenants in common |
UNIF GIFT MIN |
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Custodian |
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(Cust) |
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TEN ENT |
— |
as tenants by the entireties |
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JT TEN |
— |
as joint tenants with right of survivorship and not as tenants in common |
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under Uniform Gifts to Minors Act | |||
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CUST |
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custodian |
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Additional abbreviations may also be used though not in the above list. | |||||||
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please Insert Social Security or Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
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the within Security of THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE and does hereby irrevocably constitute and appoint attorney to transfer said Security on the books of the Issuer, with full power of substitution in the premises.
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Dated: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.
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ANNEX A
REPAYMENT ELECTION FORM
ALLSTATE LIFE GLOBAL FUNDING
ALLSTATE LIFE® CORENOTES®
CUSIP NO.
To: [Name of Trust]
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The undersigned financial institution (the “Financial Institution”) represents the following: |
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The Financial Institution has received a request for repayment from the executor or other authorized representative (the “Authorized Representative”) of the deceased beneficial owner listed below (the “Deceased Beneficial Owner”) of Allstate Life(r) CoreNotes(r) (CUSIP No. ) (the “Notes”). |
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At the time of his or her death, the Deceased Beneficial Owner owned Notes in the principal amount listed below. |
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The Deceased Beneficial Owner acquired the Notes at least six (6) months before the date of death of such Deceased Beneficial Owner. |
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The Financial Institution currently holds such Notes as a direct or indirect participant in The Depository Trust Company (the “Depositary”). |
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The Financial Institution agrees to the following terms: |
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The Financial Institution shall follow the instructions (the “Instructions”) accompanying this Repayment Election Form (this “Form”). |
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The Financial Institution shall make all records specified in the Instructions supporting the above representations available to [The Bank of New York Trust Company, N.A.] (the “Trustee”) or [Name of Trust] (the “Trust”) for inspection and review within five Business Days of the Indenture Trustee’s or the Trust’s request. |
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If the Financial Institution, the Indenture Trustee or the Trust, in any such party’s reasonable discretion, deems any of the records specified in the Instructions supporting the above representations unsatisfactory to substantiate a claim for repayment, the Financial Institution shall not be obligated to submit this Form, and the Indenture Trustee or the Trust may deny repayment. If the Financial Institution cannot substantiate a claim for repayment, it shall notify the Indenture Trustee and the Trust immediately. |
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Repayment elections may not be withdrawn. |
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The Financial Institution agrees to indemnify and hold harmless the Indenture Trustee and the Trust against and from any and all claims, liabilities, costs, losses, expenses, suits and damages resulting from the Financial Institution’s above representations and request for repayment on behalf of the Authorized Representative. |
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The Notes will be repaid on the first Interest Payment Date to occur at least 20 calendar days after the date of acceptance of the Notes for repayment, unless such date is not a business day, in which case the date of repayment shall be the next succeeding business day. |
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Subject to Allstate Life’s right hereunder to limit the aggregate principal amount of Funding Agreements securing notes as to which exercises of any put option by the issuing trusts attributable to notes as to which exercises of the Survivor’s Option shall be accepted in any one calendar year, all questions as to |
A-1
the eligibility or validity of any exercise of the survivor’s option will be determined by the Indenture Trustee, in its sole discretion, which determination shall be final and binding on all parties.
A-2
REPAYMENT ELECTION FORM
(1)
Name of Deceased Beneficial Owner
(2)
Date of Death
(3)
Name of Authorized Representative Requesting Repayment
(4)
Name of Financial Institution Requesting Repayment
(5)
Signature of Authorized Representative of Financial Institution Requesting Repayment
(6)
Principal Amount of Requested Repayment
(7)
Date of Election
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(8) Financial Institution |
(9) Wire instructions for payment: |
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Authorized Representative: |
Bank Name: |
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Name |
ABA Number: |
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Phone Number: |
Account Name: |
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Fax Number: |
Account Number: |
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Mailing Address (no P.O. Boxes): |
Reference (optional): |
TO BE COMPLETED BY THE INDENTURE TRUSTEE:
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(A) |
Election Number*: |
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(B) |
Delivery and Payment Date: |
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(C) |
Principal Amount: |
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(D) |
Accrued Interest: |
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(E) |
Date of Receipt of Form by the Indenture Trustee: |
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(F) |
Date of Acknowledgment by the Indenture Trustee: |
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To be assigned by the Indenture Trustee upon receipt of this Form. An acknowledgement, in the form of a copy of this document with the assigned Election Number, will be returned to the party and location designated in item (8) above. |
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INSTRUCTIONS FOR COMPLETING REPAYMENT ELECTION FORM AND EXERCISING
REPAYMENT OPTION
Capitalized terms used and not defined herein have the meanings defined in the accompanying Repayment Election Form.
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Collect and retain for a period of at least three years (1) satisfactory evidence of the authority of the Authorized Representative, (2) satisfactory evidence of death of the Deceased Beneficial Owner, (3) satisfactory evidence that the Deceased Beneficial Owner beneficially owned, at the time of his or her death, the Notes being submitted for repayment, (4) satisfactory evidence that the Notes being submitted for repayment were acquired by the Deceased Beneficial Owner at least six (6) months before the date of the death of such Deceased Beneficial Owner, and (5) any necessary tax waivers. For purposes of determining whether the Notes will be deemed beneficially owned by an individual at any given time, the following rules shall apply: |
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If a Note (or a portion thereof) is beneficially owned by tenants by the entirety or joint tenants, the Note (or relevant portion thereof) will be regarded as beneficially owned by a single owner. Accordingly, the death of a tenant by the entirety or joint tenant will be deemed the death of the beneficial owner and the entire principal amount so owned will become eligible for repayment. |
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The death of a person beneficially owning a Note (or a portion thereof) by tenancy in common will be deemed the death of the beneficial owner only with respect to the deceased owner’s interest in the Note (or relevant portion thereof) so owned, unless a husband and wife are the tenants in common, in which case the death of either will be deemed the death of the beneficial owner and the entire principal amount so owned will be eligible for repayment. |
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A Note (or a portion thereof) beneficially owned by a trust will be regarded as beneficially owned by each beneficiary of the trust to the extent of that beneficiary’s interest in the trust (however, a trust’s beneficiaries collectively cannot be beneficial owners of more Notes than are owned by the trust). The death of a beneficiary of a trust will be deemed the death of the beneficial owner of the Notes (or relevant portion thereof) beneficially owned by the trust to the extent of that beneficiary’s interest in the trust. The death of an individual who was a tenant by the entirety or joint tenant in a tenancy which is the beneficiary of a trust will be deemed the death of the beneficiary of the trust. The death of an individual who was a tenant in common in a tenancy which is the beneficiary of a trust will be deemed the death of the beneficiary of the trust only with respect to the deceased holder’s beneficial interest in the Note, unless a husband and wife are the tenants in common, in which case the death of either will be deemed the death of the beneficiary of the trust. |
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The death of a person who, during his or her lifetime, was entitled to substantially all of the beneficial interest in a Note (or a portion thereof) will be deemed the death of the beneficial owner of that Note (or relevant portion thereof), regardless of the registration of ownership, if such beneficial interest can be established to the satisfaction of the Indenture Trustee. Such beneficial interest will exist in many cases of street name or nominee ownership, custodial arrangements, ownership by a trustee, ownership under the Uniform Transfers of Gifts to Minors Act and community property or other joint ownership arrangements between spouses. Beneficial interest will be evidenced by such factors as the power to sell or otherwise dispose of a Note, the right to receive the proceeds of sale or disposition and the right to receive interest and principal payments on a Note. |
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2. |
Indicate the name of the Deceased Beneficial Owner on line (1). |
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3. |
Indicate the date of death of the Deceased Beneficial Owner on line (2). |
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4. |
Indicate the name of the Authorized Representative requesting repayment on line (3). |
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5. |
Indicate the name of the Financial Institution requesting repayment on line(4). |
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6. |
Affix the authorized signature of the Financial Institution’s representative on line (5). THE SIGNATURE MUST BE MEDALLION SIGNATURE GUARANTEED. |
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7. |
Indicate the principal amount of Notes to be repaid on line (6). |
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8. |
Indicate the date this Form was completed on line (7). |
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9. |
Indicate the name, mailing address (no P.O. boxes, please), telephone number and facsimile-transmission number of the party to whom the acknowledgment of this election may be sent in item (8). |
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10. |
Indicate the wire instruction for payment on line (9). |
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11. |
Leave lines (A), (B), (C), (D), (E) and (F) blank. |
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12. |
Mail or otherwise deliver an original copy of the completed Form to: |
[The Bank of New York Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602]
13. FACSIMILE TRANSMISSIONS OF THE REPAYMENT ELECTION FORM WILL NOT BE ACCEPTED.
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If the acknowledgement of the Indenture Trustee’s receipt of this Form, including the assigned Election Number, is not received within 10 days of the date such information is sent to the Trustee, contact the Trustee at [The Bank of New York, Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, IL 60602]. |
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For assistance with this Form or any questions relating thereto, please contact the Trustee [The Bank of New York Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, IL 60602]. |
A-5
SCHEDULE I
I-1
Exhibit 4.11
FORM OF DEFINITIVE SECURITY FOR
ALLSTATE LIFE® CORENOTES® PROGRAM
[FACE OF DEFINITIVE SECURITY]
Unless this Note Certificate is presented by the Holder or an authorized representative of the Holder to the Trust (hereinafter defined) or its agent for registration or transfer, exchange or payment, any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered Holder hereof has an interest herein.
This Note Certificate is a definitive security within the meaning of the standard indenture terms (hereinafter defined) and is registered in the name of the Holder (as defined in the standard indenture terms) hereof. This Note is not exchangeable for a global security (as defined in the standard indenture terms).
CUSIP No.:
ALLSTATE LIFE GLOBAL FUNDING TRUST —
ALLSTATE LIFE® CORENOTES®
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Title of Notes: |
Stated Maturity Date: |
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Principal Amount: $ |
Securities Exchange Listing: o Yes o No. If yes, |
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Original Issue Date: |
indicate name(s) of Securities Exchange(s): |
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Issue Price: |
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Interest Rate or Formula: |
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Fixed Rate Notes: o Yes o No. If yes, |
Floating Rate Notes: o Yes o No. If yes, |
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Interest Rate: |
Regular Floating Rate Notes: o |
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Interest Payment Dates: |
Floating Rate/Fixed Rate Notes: o |
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Day Count Convention: |
Interest Rate: |
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Additional/Other Terms: |
Interest Rate Basis(es): |
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Discount Notes: o Yes o No. If yes, |
CD Rate o |
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Total Amount of Discount: |
CMT Rate o |
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Initial Accrual Period of Discount: |
Commercial Paper Rate o |
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Additional/Other Terms: |
Constant Maturity Swap Rate o |
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Redemption Provisions: o Yes o No. If yes, |
Federal Funds Rate o |
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Initial Redemption Date: |
LIBOR o |
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Initial Redemption Percentage: |
Prime Rate o |
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Annual Redemption Percentage |
Treasury Rate o |
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Reduction, if any: |
If LIBOR: |
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Additional/Other Terms: |
LIBOR Reuters Page: |
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Survivor’s Option: o Yes o No. |
LIBOR Currency: |
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Regular Interest Record Date(s): |
If CMT Rate: |
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Sinking Fund, if any: |
Designated CMT Reuters Page: |
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Calculation Agent: |
If CMT Reuters Page FEDCMT: |
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Authorized Denominations: |
o Weekly Average |
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Collateral: The right, title and interest of the Trust in and to: |
o Monthly Average |
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(i) Allstate Life Insurance Company Funding |
Designated CMT Maturity Index: |
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Agreement No(s). — ; (ii) all proceeds in respect of such |
Index Maturity: |
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Funding Agreement(s); and (iii) all books and records |
Spread (+/-), if any: |
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(including, without limitation, computer programs, |
Spread Multiplier, if any: |
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printouts, and other computer materials and files) |
Initial Interest Rate, if any: |
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pertaining to such Funding Agreement(s). |
Initial Interest Reset Date: |
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Interest Reset Dates: |
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Interest Determination Date(s): |
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Interest Payment Dates: |
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Maximum Interest Rate, if any: |
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Minimum Interest Rate, if any: |
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Fixed Rate Commencement Date, if any: |
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Floating Rate Interest, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention: |
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Additional/Other Terms: |
“Allstate Life®” is a registered servicemark of Allstate Insurance Company. “CoreNotes®” is a registered servicemark of Merrill Lynch & Co., Inc.
This Note Certificate is a Definitive Security in respect of a duly authorized issue of Notes (the “Notes”) of the Allstate Life Global Funding Trust designated above, a statutory trust organized under the laws of the State of Delaware (the “Trust”). The Notes are issued under the Indenture, dated as of the date hereof (as amended or supplemented from time to time, the “Indenture”) among the Trust and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Indenture Terms, which are incorporated by reference in and form a part of the Indenture (as amended or supplemented from time to time, the “Standard Indenture Terms”).
The Trust, for value received, hereby promises to pay to the Holder hereof or its registered assigns on the Stated Maturity Date (or on the date of redemption or repayment by the Trust prior to maturity pursuant to redemption or repayment provisions, in each case, if provided for above) the principal amount specified above and, if so specified above, to pay interest from time to time on the Notes represented by this Note Certificate from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Notes represented by this Note Certificate is paid or made available for payment and to pay such other amounts due and owing with respect to the Notes represented by this Note Certificate.
On any exchange or purchase and cancellation of any of the Notes represented by this Note Certificate, details of such exchange or purchase and cancellation shall be entered in the records of the Indenture Trustee. Upon any such exchange or purchase and cancellation, the principal amount of the Notes represented by this Note Certificate shall be charged by the principal amount so exchanged or purchased and cancelled, as provided in the Standard Indenture Terms.
Unless otherwise set forth above, if the Notes are subject to an Annual Redemption Percentage Reduction as specified above, the Redemption Price of the Notes represented by this Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the Notes represented by this Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
The Notes will mature on the Stated Maturity Date, unless their principal (or, any installment of their principal) becomes due and payable prior to the Stated Maturity Date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of the Trust, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date or any date prior to the Stated Maturity Date on which the Notes become due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Notes repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, the Trust will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next
2
succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made on any Interest Payment Date or on a Maturity Date that is not a Business Day shall be made in accordance with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Notes set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Notes as specified above, the Notes shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Notes represented by this Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Indenture Trustee pursuant to the Indenture.
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IN WITNESS WHEREOF, the Trust has caused this instrument to be duly executed on its behalf. |
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Dated: Original Issue Date |
THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE, as Issuer | ||
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By: [WILMINGTON TRUST COMPANY], not in its individual capacity, but solely as Delaware Trustee | ||
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By: |
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Name: |
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Title: |
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CERTIFICATE OF AUTHENTICATION
This Note Certificate is one of the Note Certificates representing Notes described in the within-mentioned Indenture.
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Dated: Original Issue Date |
[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as Indenture Trustee | |
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By: |
Authorized Signatory |
4
[REVERSE OF DEFINITIVE SECURITY]
SECTION 1. General. This Note Certificate is a Definitive Security in respect of a duly authorized issue of Notes of the Trust. The Notes are issued pursuant to the Indenture.
SECTION 2. Currency. The Notes are denominated in, and payments of principal, premium, if any, and/or interest, if any, will be made in U.S. dollars.
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SECTION 3. Determination of Interest Rate and Other Payment Provisions. |
Fixed Rate Notes. If the Notes are designated on the face hereof as “Fixed Rate Notes,” the Notes will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Notes will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of Fixed Rate Notes falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Notes. If the Notes are designated on the face hereof as “Discount Notes” (as defined below), payments in respect of the Notes shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of such Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of such Discount Notes, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on such Discount Notes to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Notes occurs for Discount Notes, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for Discount Notes (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to Discount Notes and an assumption that the maturity of such Discount Notes will not be accelerated. If the period from the date of issue to the first Interest Payment Date for Discount Notes (the “Initial Period”) is shorter than the compounding period for such Discount Notes, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. A “Discount Note” is any Note that has an Issue Price that is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Floating Rate Notes. If the Notes are specified on the face hereof as “Floating Rate Notes,” interest on the Notes shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Federal Funds Rate Note, LIBOR Note, Prime Rate Note or Treasury Rate Note. If the Notes are designated on the face hereof as Floating Rate Notes, the face hereof will specify whether the Notes are Regular Floating Rate Notes or Floating Rate/Fixed Rate Notes. For the period from the date of issue to, but not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Notes |
5
are LIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date.
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Notes reset daily, each Business Day; (2) if the Notes reset weekly, other than Treasury Rate Notes, the Wednesday of each week; (3) if the Notes are Treasury Rate Notes that reset weekly, and except as provided below under “Treasury Rate Notes,” the Tuesday of each week; (4) if the Notes reset monthly, the third Wednesday of each month; (5) if the Notes reset quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Notes reset semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Notes reset annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to Floating Rate/ Fixed Rate Notes, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of Floating Rate Notes as to which the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis (as defined below), or by the actual number of days in the year, in the case of Floating Rate Notes as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for Floating Rate Notes as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Calculation Date (as defined below). “Calculation Date” means the date by which the Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. |
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded to the nearest cent. |
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(E) |
Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if any Interest Payment Date (other than the Maturity Date for the Notes) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Notes are LIBOR Notes and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if the Notes are designated on the face hereof as Floating Rate Notes, if the Maturity Date of the Notes falls on a day this is not a Business Day, the Trust will make the required payment of principal, |
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premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Notes is daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof; (2) if the Interest Reset Date for the Notes is quarterly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (3) if the Interest Reset Date for the Notes is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof; (4) if the Interest Reset Date for the Notes is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, the Maturity Date will also be an Interest Payment Date.
If specified on the face hereof, the Notes may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for Floating Rate Notes cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Notes are designated on the face hereof as Floating Rate Notes, the interest rate on Notes shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Notes and neither the Indenture Trustee nor the Calculation Agent shall have any liability to the Holder of the Notes in respect of any determination, calculation, quote or rate made or provided by the Calculation Agent. Upon request of the Holder of the Notes, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Notes. If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, the Trust will appoint a successor to act as such in its place. The Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Notes on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the “Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Notes. If the Interest Rate Basis is the CD Rate, the Notes shall be deemed to be “CD Rate Notes.” CD Rate Notes will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the
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particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate under the heading “CDs (secondary market)”; or (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
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(B) |
CMT Rate Notes. If the Interest Rate Basis is the CMT Rate, the Notes shall be deemed to be “CMT Rate Notes.” CMT Rate Notes will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day preceding the Interest Reset Date. |
“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so
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selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one
9
of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Notes. If the Interest Rate Basis is the Commercial Paper Rate, the Notes shall be deemed to be “Commercial Paper Rate Notes.” Commercial Paper Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as such rate is published in H.15(519) under the heading “Commercial Paper—Nonfinancial”; or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purposes of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not published by 3:00 P.M., New York City time, on the Calculation Date, then the Commercial Paper Rate as calculated by the Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the
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equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 360 - (D x M) |
x 100 |
where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. |
Constant Maturity Swap Rate” means: (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City time, on the particular Interest Determination Date; or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
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“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.
“Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Calculation Agent, after consultation with Allstate Life.
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(E) |
Federal Funds Rate Notes. If the Interest Rate Basis is the Federal Funds Rate, the Notes shall be deemed to be “Federal Funds Rate Notes.” Federal Funds Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page FEDFUNDS1.
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(F) |
LIBOR Notes. If the Interest Rate Basis is LIBOR (as defined below), the Notes shall be deemed to be “LIBOR Notes.” LIBOR Notes will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day (as defined below) preceding the related Interest Reset Date. |
“LIBOR” means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Calculation Agent (after consultation with Allstate Life) to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the particular Index Maturity and in a principal amount that is
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representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(G) |
Prime Rate Notes. If the Interest Rate Basis is the Prime Rate, the Notes shall be deemed to be “Prime Rate Notes.” Prime Rate Notes will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Prime Rate” means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date; or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent (after consultation with Allstate Life); or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Reuters Screen US PRIME 1 Page” means the display on Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks.
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(H) |
Treasury Rate Notes. If the Interest Rate Basis is the Treasury Rate, the Notes shall be deemed to be “Treasury Rate Notes.” Treasury Rate Notes will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if |
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any. The Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below).
“Treasury Rate” means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury; or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent (after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof; or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N |
x 100 |
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360 - (D x M) |
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where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the
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following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(I) |
Regular Floating Rate Notes. Unless the Notes are designated as Floating Rate/Fixed Rate Notes or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, such Notes that bear interest at floating rates will be Regular Floating Rate Notes and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on Regular Floating Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(J) |
Floating Rate/Fixed Rate Notes. If the Notes are designated as “Floating Rate/Fixed Rate Notes” on the face hereof, such Notes that bear interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on Floating Rate/Fixed Rate Notes is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
SECTION 4. Optional Redemption. Except in the case of Discount Notes, if an Initial Redemption Date is specified on the face hereof, the Trust may redeem the Notes prior to the Stated Maturity Date at its option on any Business Day on or after the Initial Redemption Date in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof (provided that any remaining principal amount of the Notes shall be at least $1,000 or other minimum authorized denomination applicable thereto), at the applicable Redemption Price (as defined below), together with unpaid interest accrued on the Notes, any Additional Amounts and other amounts payable with respect thereto to the date of redemption. The Trust must give written notice to the Holders of the Notes to be redeemed at its option not more than 60 nor less than 30 calendar days prior to the date of redemption. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of Notes represented by this Note Certificate to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount thereof to be redeemed.
SECTION 5. Repayment Provisions. If the face of this Note Certificate specifies that “Survivor’s Option” (as defined below) applies, the person (the “Authorized Representative”) who has legal authority to act on behalf of the estate of the deceased owner of a beneficial interest in the Notes represented hereby shall have the option to elect repayment of the Notes in whole or in part in increments of U.S.$1,000 (provided that any remaining principal amount of the Notes shall be at least U.S.$1,000), following the death of such beneficial owner (a “Survivor’s Option”). No Survivor’s Option may be exercised unless such beneficial interest was held by the beneficial owner for a period of at least six months prior to the death of the beneficial owner.
Pursuant to the valid exercise of the Survivor’s Option, if applicable, the Trust shall repay the Notes represented hereby (or portion thereof) at a price equal to 100% of the unpaid principal amount of the Notes to be repaid, together with unpaid interest accrued thereon to, but excluding, the Repayment Date, subject to the limitations in the next succeeding sentence. Allstate Life may, in its sole discretion, limit the aggregate principal amount of (i) all Funding Agreements securing all outstanding series of notes issued under the Allstate Life® CoreNotes® program as to which exercises of any put option by any issuing trust shall be accepted by Allstate Life in any calendar year to an amount equal to the greater of $2,000,000 or 2% of the aggregate principal amount of all Funding Agreements securing all outstanding series of notes issued under the Allstate Life® CoreNotes® program as of the end of the most recent
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calendar year or such other greater amount as determined in accordance with the applicable Funding Agreement(s) and set forth on the face hereof; (ii) the Funding Agreement(s) securing the Notes as to which exercises of any put option by the Trust attributable to Notes as to which the Survivor’s Option has been exercised by the Authorized Representative of any individual deceased beneficial owner to $250,000 in any calendar year or such other greater amount as determined in accordance with the applicable Funding Agreement(s) and set forth on the face hereof; and (iii) the Funding Agreement(s) securing the Notes as to which exercises of any put option by the Trust shall be accepted in any calendar year to an amount as set forth in the applicable Funding Agreement(s) and on the face hereof.
In any such event, the Trust shall similarly be required to limit the aggregate principal amount of Notes as to which exercises of the Survivor’s Option shall be accepted by it.
Each election to exercise the Survivor’s Option shall be effected in the order received by the Administrator. Notes that are not repaid in any calendar year due to the application of the limits described above will be treated as though they had been tendered on the first day of the following calendar year in the order in which they were originally tendered. Subject to the limitations described above, Notes accepted for repayment will be repaid on the first interest payment date that occurs 20 or more calendar days after the date of the acceptance unless that interest payment date is not a Business Day, in which case the repayment date will be the next succeeding Business Day.
To exercise the Survivor’s Option, the Authorized Representative must provide to the Indenture Trustee a properly completed Repayment Election Form, which is attached hereto as Annex A.
Subject to Allstate Life’s right hereunder to limit the aggregate principal amount of Funding Agreements securing notes as to which exercises of any put option by the issuing trusts attributable to notes as to which exercises of the Survivor’s Option shall be accepted in any one calendar year, all questions as to the eligibility or validity of any exercise of the Survivor’s Option will be determined by the Administrator, in its sole discretion. The Administrator’s determination shall be final and binding.
The death of a person owning a Note or beneficial interest therein in joint tenancy or tenancy by the entirety with another person or persons shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note, and the entire principal amount of such Note or beneficial interest therein shall be eligible for repayment pursuant to the Survivor’s Option. The death of a person owning a Note or beneficial interest therein by tenancy in common shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note only to the extent of the interest of the deceased Holder or beneficial owner in such Note unless such Note or beneficial interest therein is held by husband and wife as tenants in common, in which case, the death of either spouse shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note, and the entire principal amount of such Note or beneficial interest therein shall be eligible for repayment pursuant to the Survivor’s Option.
The death of a person who, during his or her lifetime, was entitled to substantially all of the interests of beneficial ownership of a Note shall be deemed to be the death of the Holder or beneficial owner, as the case may be, of such Note if such interests can be established to the satisfaction of the Administrator.
In the event of repayment of the Notes in part only, a new Note Certificate of like tenor in a principal amount equal to the unrepaid portion of principal of Notes represented by this Note Certificate and otherwise having the same terms and provisions as the Notes shall be issued by the Trust in the name of the Holder of this Note Certificate upon the presentation and surrender of this Note Certificate.
SECTION 6. Sinking Fund. Unless otherwise specified on the face hereof, the Notes will not be subject to any sinking fund.
SECTION 7. Modifications and Amendments. Sections 9.1 and 9.2 of the Standard Indenture Terms contain provisions permitting the Trust and the Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Indentures for limited purposes and take other actions set forth in the Standard Indenture Terms, and (2) with the consent of the Holders of not less than 662/3% in aggregate principal amount of Notes at the time outstanding, evidenced as in the Standard Indenture Terms, to execute Supplemental Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or any Supplemental Indenture or modifying in any manner the rights of the Holders of the Notes subject to specified limitations.
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SECTION 8. Obligations Unconditional. No reference herein to the Indenture or the Standard Indenture Terms and no provision of the Notes or of the Indenture shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Notes at the places, at the respective times, and at the rate herein prescribed.
SECTION 9. Collateral. Pursuant to the Indenture, the Trust will grant a security interest in, pledge and collaterally assign the Collateral specified on the face hereof to the Indenture Trustee on behalf of the holders of the Notes and any other person for whose benefit the Indenture Trustee is or will be holding the Collateral. The Notes will be secured by a first priority perfected security interest in the Collateral in favor of the Indenture Trustee and the other persons identified in the Standard Indenture Terms.
SECTION 10. Security; Limited Recourse. The Notes are solely the obligations of the Trust, and will not be guaranteed by any person, including but not limited to Allstate Life, Allstate Life Global Funding, any Agent, the Trust Beneficial Owner, the Delaware Trustee, the Indenture Trustee or any of their affiliates. The Trust’s obligations under the Notes will be secured by all of the Trust’s rights and title in one or more Funding Agreement(s) issued by Allstate Life and other rights and assets included in the applicable Collateral. The Holder of the Notes has no direct contractual rights against Allstate Life under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to Allstate Life will belong to the Trust, its successors and permitted assignees. The Trust has pledged, collaterally assigned and granted a first priority perfected security interest in the Collateral for the Notes to the Indenture Trustee on behalf of the Holders of the Notes and the other persons identified in the Standard Indenture Terms. Recourse to Allstate Life under each Funding Agreement will be enforceable only by the Indenture Trustee as a secured party on behalf of the Holders of Notes and the other persons identified in the Standard Indenture Terms.
SECTION 11. Events of Default. In case an Event of Default, as defined in the Standard Indenture Terms, shall have occurred and be continuing, the principal of the Notes may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Standard Indenture Terms. If the Notes are Discount Notes, the amount of principal of the Notes that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 12. Withholding; Additional Amounts; Tax Event. All amounts due in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax on payments on the Notes unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, the Trust will not pay any additional amounts (“Additional Amounts”) to Holders of the Notes in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem the Notes.
SECTION 13. Listing. Unless otherwise specified on the face hereof, the Notes will not be listed on any securities exchange.
SECTION 14. No Recourse Against Certain Persons. No recourse shall be had for the payment of the principal of or the interest on the Notes, or for any claim based hereon, or otherwise in respect thereof, or based on or in respect of the Indenture or any Supplemental Indenture, against the Nonrecourse Parties, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such personal liability being, by the acceptance of any Notes and as part of the consideration for issue of the Notes, expressly waived and released.
SECTION 15. Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Note Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
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TEN COM |
— |
as tenants in common |
UNIF GIFT MIN ACT |
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(Cust) |
Custodian |
(Minor) |
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TEN ENT |
— |
as tenants by the entireties |
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JT TEN |
— |
as joint tenants with right of survivorship and not as tenants in common |
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under Uniform Gifts to Minors Act | ||
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CUST |
— |
custodian |
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(State) | ||
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Additional abbreviations may also be used though not in the above list. | ||||||
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ASSIGNMENT FORM
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto |
Please Insert Social Security or Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
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the within Security of THE ALLSTATE LIFE GLOBAL FUNDING TRUST SPECIFIED ON THE FACE OF THIS NOTE CERTIFICATE and does hereby irrevocably constitute and appoint attorney to transfer said Security on the books of the Issuer, with full power of substitution in the premises.
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Dated: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.
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ANNEX A
REPAYMENT ELECTION FORM
ALLSTATE LIFE GLOBAL FUNDING
ALLSTATE LIFE® CORENOTES®
CUSIP NO.
To: [Name of Trust]
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The authorized representative (the “Authorized Representative”) represents the following: |
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• |
The Authorized Representative requests repayment of Allstate Life® CoreNotes® (CUSIP No. ) (the “Notes”) of the deceased beneficial owner listed below (the “Deceased Beneficial Owner”). |
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At the time of his or her death, the Deceased Beneficial Owner owned Notes in the principal amount listed below. |
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The Deceased Beneficial Owner acquired the Notes at least six (6) months before the date of death of such Deceased Beneficial Owner. |
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The Authorized Representative agrees to the following terms: |
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The Authorized Representative shall follow the instructions (the “Instructions”) accompanying this Repayment Election Form (this “Form”). |
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The Authorized Representative shall make all records specified in the Instructions supporting the above representations available to [The Bank of New York Trust Company, N.A.] (the “Trustee”) or [Name of Trust] (the “Trust”) for inspection and review within five Business Days of the Indenture Trustee’s or the Trust’s request. |
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If the Indenture Trustee or the Trust, in any such party’s reasonable discretion, deems any of the records specified in the Instructions supporting the above representations unsatisfactory to substantiate a claim for repayment, the Indenture Trustee or the Trust may deny repayment. If the Authorized Representative cannot substantiate a claim for repayment, it shall notify the Indenture Trustee and the Trust immediately. |
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Repayment elections may not be withdrawn. |
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The Notes will be repaid on the first Interest Payment Date to occur at least 20 calendar days after the date of acceptance of the Notes for repayment, unless such date is not a business day, in which case the date of repayment shall be the next succeeding business day. |
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Subject to Allstate Life’s right hereunder to limit the aggregate principal amount of Funding Agreements securing notes as to which exercises of any put option by the issuing trusts attributable to notes as to which exercises of the Survivor’s Option shall be accepted in any one calendar year, all questions as to the eligibility or validity of any exercise of the survivor’s option will be determined by the Indenture Trustee, in its sole discretion, which determination shall be final and binding on all parties. |
A-1
REPAYMENT ELECTION FORM
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(1) |
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Name of Deceased Beneficial Owner |
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(2) |
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Date of Death |
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(3) |
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Name of Authorized Representative Requesting Repayment |
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(4) |
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Signature of Authorized Representative Requesting Repayment |
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(5) |
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Principal Amount of Requested Repayment |
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(6) |
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Date of Election |
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(7) |
Authorized Representative: |
(8) |
Wire instructions for payment: |
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Name: |
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Bank Name: |
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Phone Number: |
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ABA Number: |
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Fax Number: |
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Account Name: |
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Mailing Address (no P.O. Boxes): |
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Account Number: |
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Reference (optional): |
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TO BE COMPLETED BY THE INDENTURE TRUSTEE: |
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(A) |
Election Number*: |
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(B) |
Delivery and Payment Date: |
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(C) |
Principal Amount: |
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(D) |
Accrued Interest: |
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(E) |
Date of Receipt of Form by the Indenture Trustee: |
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(F) |
Date of Acknowledgment by the Indenture Trustee: |
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* |
To be assigned by the Indenture Trustee upon receipt of this Form. An acknowledgement, in the form of a copy of this document with the assigned Election Number, will be returned to the party and location designated in item (7) above. |
A-2
INSTRUCTIONS FOR COMPLETING REPAYMENT ELECTION FORM AND EXERCISING
REPAYMENT OPTION
Capitalized terms used and not defined herein have the meanings defined in the accompanying Repayment Election Form.
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1. |
Collect and retain for a period of at least three years (1) satisfactory evidence of the authority of the Authorized Representative, (2) satisfactory evidence of death of the Deceased Beneficial Owner, (3) satisfactory evidence that the Deceased Beneficial Owner beneficially owned, at the time of his or her death, the Notes being submitted for repayment, (4) satisfactory evidence that the Notes being submitted for repayment were acquired by the Deceased Beneficial Owner at least six (6) months before the date of the death of such Deceased Beneficial Owner, and (5) any necessary tax waivers. For purposes of determining whether the Notes will be deemed beneficially owned by an individual at any given time, the following rules shall apply: |
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If a Note (or a portion thereof) is beneficially owned by tenants by the entirety or joint tenants, the Note (or relevant portion thereof) will be regarded as beneficially owned by a single owner. Accordingly, the death of a tenant by the entirety or joint tenant will be deemed the death of the beneficial owner and the entire principal amount so owned will become eligible for repayment. |
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The death of a person beneficially owning a Note (or a portion thereof) by tenancy in common will be deemed the death of the beneficial owner only with respect to the deceased owner’s interest in the Note (or relevant portion thereof) so owned, unless a husband and wife are the tenants in common, in which case the death of either will be deemed the death of the beneficial owner and the entire principal amount so owned will be eligible for repayment. |
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A Note (or a portion thereof) beneficially owned by a trust will be regarded as beneficially owned by each beneficiary of the trust to the extent of that beneficiary’s interest in the trust (however, a trust’s beneficiaries collectively cannot be beneficial owners of more Notes than are owned by the trust). The death of a beneficiary of a trust will be deemed the death of the beneficial owner of the Notes (or relevant portion thereof) beneficially owned by the trust to the extent of that beneficiary’s interest in the trust. The death of an individual who was a tenant by the entirety or joint tenant in a tenancy which is the beneficiary of a trust will be deemed the death of the beneficiary of the trust. The death of an individual who was a tenant in common in a tenancy which is the beneficiary of a trust will be deemed the death of the beneficiary of the trust only with respect to the deceased holder’s beneficial interest in the Note, unless a husband and wife are the tenants in common, in which case the death of either will be deemed the death of the beneficiary of the trust. |
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The death of a person who, during his or her lifetime, was entitled to substantially all of the beneficial interest in a Note (or a portion thereof) will be deemed the death of the beneficial owner of that Note (or relevant portion thereof), regardless of the registration of ownership, if such beneficial interest can be established to the satisfaction of the Indenture Trustee. Such beneficial interest will exist in many cases of street name or nominee ownership, custodial arrangements, ownership by a trustee, ownership under the Uniform Transfers of Gifts to Minors Act and community property or other joint ownership arrangements between spouses. Beneficial interest will be evidenced by such factors as the power to sell or otherwise dispose of a Note, the right to receive the proceeds of sale or disposition and the right to receive interest and principal payments on a Note. |
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2. |
Indicate the name of the Deceased Beneficial Owner on line (1). |
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3. |
Indicate the date of death of the Deceased Beneficial Owner on line (2). |
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4. |
Indicate the name of the Authorized Representative requesting repayment on line (3). |
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5. |
Affix the authorized signature of the Authorized Representative on line (4). |
A-3
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6. |
Indicate the principal amount of Notes to be repaid on line (5). |
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7. |
Indicate the date this Form was completed on line (6). |
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8. |
Indicate the name, mailing address (no P.O. boxes, please), telephone number and facsimile-transmission number of the party to whom the acknowledgment of this election may be sent in item (7). |
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9. |
Indicate the wire instruction for payment on line (8). |
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10. |
Leave lines (A), (B), (C), (D), (E) and (F) blank. |
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11. |
Mail or otherwise deliver an original copy of the completed Form to: |
[The Bank of New York Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602]
12. FACSIMILE TRANSMISSIONS OF THE REPAYMENT ELECTION FORM WILL NOT BE ACCEPTED.
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13. |
If the acknowledgement of the Indenture Trustee’s receipt of this Form, including the assigned Election Number, is not received within 10 days of the date such information is sent to the Trustee, contact the Trustee at [The Bank of New York Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, IL 60602]. |
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14. |
For assistance with this Form or any questions relating thereto, please contact the Trustee at [The Bank of New York Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, IL 60602]. |
A-4
EXHIBIT 10.2
FORM OF SECURITY FOR
FUNDING NOTE RELATED TO SECURED MEDIUM TERM NOTES ISSUED
UNDER THE ALLSTATE LIFE® CORENOTES® PROGRAM
[FACE OF SECURITY]
CUSIP No.:
ALLSTATE LIFE GLOBAL FUNDING
FUNDING NOTE
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Title of Funding Note: |
Stated Maturity Date: |
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Trust: |
Securities Exchange Listing: o Yes o No. If yes, |
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Principal Amount: $ |
indicate name(s) of Securities Exchange(s): |
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Original Issue Date: |
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Issue Price: |
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Interest Rate or Formula: |
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Fixed Rate Note: o Yes o No. If yes, |
Floating Rate Note: [ ] Yes [ ] No. [ ] If yes, |
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Interest Rate: o |
Regular Floating Rate Note: o |
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Interest Payment Dates: |
Floating Rate/Fixed Rate Note: o |
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Day Count Convention: |
Interest Rate: |
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Additional/Other Terms: |
Interest Rate Basis(es): |
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Discount Note: o Yes No. If yes, o |
CD Rate [ ] |
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Total Amount of Discount: |
CMT Rate [ ] |
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Initial Accrual Period of Discount: |
Commercial Paper Rate [ ] |
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Additional/Other Terms: |
Constant Maturity Swap Rate [ ] |
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Redemption Provisions: o Yes o No. If yes |
Federal Funds Rate [ ] |
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Initial Redemption Date: |
LIBOR [ ] |
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Initial Redemption Percentage |
Prime Rate [ ] |
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Annual Redemption Percentage Reduction, |
Treasury Rate [ ] |
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if any: |
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Additional/Other Terms: o |
If LIBOR: |
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Regular Interest Record Date(s): |
LIBOR Reuters Page: |
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Sinking Fund: |
LIBOR Currency: |
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Funding Note Calculation Agent: |
If CMT Rate: |
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Authorized Denominations: |
Designated CMT Reuters Page: |
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Collateral: The right, title and interest of the Trust in and |
If CMT Reuters Page FEDCMT: |
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to: (i) Allstate Life Insurance Company Funding |
o Weekly Average |
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Agreement No(s). - ; (ii) all proceeds in respect of |
o Monthly Average |
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such Funding Agreement(s); and (iii) all books and |
Designated CMT Maturity Index: |
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records (including, without limitation, computer |
Index Maturity: |
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programs, printouts, and other computer materials |
Spread (+/-), if any: |
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and files) pertaining to such Funding Agreement(s). |
Spread Multiplier, if any: |
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Additional Amounts to be Paid for Withholding Tax: |
Initial Interest Rate, if any: |
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[ ] Yes [ ] No |
Initial Interest Reset Date: |
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Interest Reset Dates: |
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Interest Determination Date(s): |
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Interest Payment Dates: |
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Maximum Interest Rate, if any: |
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Minimum Interest Rate, if any: |
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Fixed Rate Commencement Date, if any: |
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Floating Interest Rate, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention |
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Additional/Other Terms: |
“Allstate Life®” is a registered servicemark of Allstate Insurance Company. “CoreNotes®” is a registered servicemark of Merrill Lynch & Co., Inc.
This note certificate (the “Funding Note Certificate”) represents a duly authorized funding note (the “Funding Note”) of Allstate Life Global Funding, a statutory trust organized under the laws of the State of Delaware (“Global Funding”). The Funding Note is being issued in connection with the issuance and sale by the trust specified above (the “Trust”) of the trust notes identified on Annex A to that certain series instrument to which Global Funding and the Trust are parties (the “Series Instrument”) (the “Trust Notes”). The Funding Note is being issued under the Funding Note Indenture, effective as of the date hereof (as amended or supplemented from time to time, the “Funding Note Indenture”) between Global Funding and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Funding Note Indenture Terms, which are incorporated by reference in and form a part of the Funding Note Indenture (as amended or supplemented from time to time, the “Standard Funding Note Indenture Terms”).
Subject to the immediately following paragraph, Global Funding, for value received, hereby promises to pay to the Holder or Holders of the Funding Note on the Maturity Date (as defined below) (or on the date of redemption or repayment by Global Funding) the principal amount of the Funding Note and, if so specified above, to pay interest from time to time on the Funding Note from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Funding Note is paid or made available for payment and to pay such other amounts due and owing with respect to the Funding Note.
This Funding Note Certificate shall be surrendered for cancellation by or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture Trustee, immediately upon the assignment by Global Funding to, or as directed by, the Trust of each funding agreement identified on Exhibit A to the Closing Instrument (each, a “Funding Agreement”) in accordance with the terms of the Funding Note and the Coordination Agreement, and such cancellation shall operate as a redemption and satisfaction of the Funding Note.
On any exchange or purchase and cancellation of the Funding Note, details of such exchange or purchase and cancellation shall be entered in the records of Global Funding. Upon any such exchange or purchase and cancellation, the principal amount of the Funding Note shall be charged by the principal amount so exchanged or
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purchased and cancelled, as provided in the Standard Funding Note Indenture Terms.
Unless otherwise set forth above, if the Funding Note is subject to an Annual Redemption Percentage Reduction as specified above, the Redemption Price of the portion of the Funding Note represented by this Funding Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the portion of the Funding Note represented by this Funding Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
The Funding Note will mature on the earlier of the Stated Maturity Date and the Maturity Date (as defined in the Trust Notes) of the Trust Notes (the “Trust Notes Maturity Date”), unless its principal (or, any installment of its principal) becomes due and payable prior to any such date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of Global Funding, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date, the Trust Notes Maturity Date or any date prior to any such date on which the Funding Note becomes due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Funding Note repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, Global Funding will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made on any Interest Payment Date or on a Maturity Date that is not a Business Day shall be made in accordance with the provision set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Funding Note set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Funding Note as specified above, the Funding Note shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Funding Note or the portion thereof represented by this Funding Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Funding Note Indenture Trustee pursuant to the Funding Note Indenture.
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IN WITNESS WHEREOF, Global Funding has caused this instrument to be duly executed on its behalf.
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Dated: Original Issue Date |
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ALLSTATE LIFE GLOBAL FUNDING, as Issuer | ||
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By: |
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Name: Title: | |
CERTIFICATE OF AUTHENTICATION
This Funding Note Certificate is one of the Funding Note Certificates representing the Funding Note described in the within-mentioned Funding Note Indenture.
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Dated: Original Issue Date |
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[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as Funding Note Indenture Trustee | ||
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By: |
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Authorized Signatory | |
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[REVERSE OF DEFINITIVE SECURITY]
SECTION 1. General. This Funding Note is being issued pursuant to the Funding Note Indenture in connection with the issuance and sale by the Trust of the Trust Notes. The Funding Note shall be surrendered for cancellation by or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture Trustee, immediately upon the assignment by Global Funding to, or as directed by, the Trust of each Funding Agreement, and such cancellation shall operate as a redemption and satisfaction of the Funding Note.
SECTION 2. Currency. The Funding Note is denominated in, and payments of principal, premium, if any, and/or interest, if any, will be made in U.S. dollars.
SECTION 3. Determination of Interest Rate and Other Payment Provisions.
Fixed Rate Note. If the Funding Note is designated on the face hereof as a “Fixed Rate Note”, the Funding Note will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Funding Note will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Note. If the Funding Note is designated on the face hereof as a “Discount Notes” (as defined below), payments in respect of the Funding Note shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of the Discount Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of such Discount Note, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on the Discount Note to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Funding Note occurs for a Discount Note, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for a Discount Note (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to a Discount Note and an assumption that the maturity of such Discount Note will not be accelerated. If the period from the date of issue to the first Interest Payment Date for a Discount Note (the “Initial Period”) is shorter than the compounding period for such Discount Note, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Funding Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. The Funding Note is a “Discount Note” if its Issue Price is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Floating Rate Note. If the Funding Note is specified on the face hereof as “Floating Rate Note”, interest on the Funding Note shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Federal Funds Rate Note, LIBOR Note,
Prime Rate Note or Treasury Rate Note. If the Funding Note is designated on the face hereof as Floating Rate Note, the face hereof will specify whether the Funding Note is a Regular Floating Rate Note or Floating Rate/Fixed Rate Note. For the period from the date of issue to, but not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof.
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Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Funding Note is a LIBOR Note and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date. |
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Funding Note resets daily, each Business Day; (2) if the Funding Note resets weekly, other than a Treasury Rate Note, the Wednesday of each week; (3) if the Funding Note is a Treasury Rate Note that resets weekly, and except as provided below under “Treasury Rate Note”, the Tuesday of each week; (4) if the Funding Note resets monthly, the third Wednesday of each month; (5) if the Funding Note resets quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Funding Note resets semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Funding Note resets annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to a Floating Rate/Fixed Rate Note, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of the Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of a Floating Rate Note as to which the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis (as defined below), or by the actual number of days in the year, in the case of a Floating Rate Note as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for a Floating Rate Note as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Funding Note Funding Note Calculation Date (as defined below). “Funding Note Calculation Date” means the date by which the Funding Note Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. |
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on a Floating Rate Note will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on a Floating Rate Note will be rounded to the nearest cent. |
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(E) |
Unless otherwise specified on the face hereof, if the Funding Note is designated on the face hereof as a Floating Rate Note, if any Interest Payment Date (other than the Maturity Date for the Funding |
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Note) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Funding Note is a LIBOR Note and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if the Funding Note is designated on the face hereof as a Floating Rate Note, if the Maturity Date of the Funding Note falls on a day this is not a Business Day, Global Funding will make the required payment of principal, premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Funding Note is daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof; (2) if the Interest Reset Date for the Funding Note is quarterly, interest will be payable on the third Wednesday every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (3) if the Interest Reset Date for the Funding Note is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof; (4) if the Interest Reset Date for the Funding Note is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, the Maturity Date will also be an Interest Payment Date.
If specified on the face hereof, the Funding Note may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for a Floating Rate Note cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for a Floating Rate Note cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Funding Note is designated on the face hereof as a Floating Rate Note, the interest rate on the Funding Note shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Funding Note Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Funding Note and neither the Funding Note Indenture Trustee nor the Funding Note Calculation Agent shall have any liability to the Holder of the Funding Note in respect of any determination, calculation, quote or rate made or provided by the Funding Note Calculation Agent. Upon request of the Holder of the Funding Note, the Funding Note Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Funding Note. If the Funding Note Calculation Agent is incapable or unwilling to act as such or if the Funding Note Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, Global Funding will appoint a successor to act as such in its place. The Funding Note Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Funding Note on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the “Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Note. If the Interest Rate Basis is the CD Rate, the Funding Note shall be deemed to be a “CD Rate Note.” A CD Rate Note will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
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“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate under the heading “CDs (secondary market)”; (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
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(B) |
CMT Rate Note. If the Interest Rate Basis is the CMT Rate, the Funding Note shall be deemed to be a “CMT Rate Note”. A CMT Rate Note will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day prior to the Interest Reset Date. |
“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M. New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal
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Reserve System Board of Governors or the United States Department of the Treasury that the Funding Note Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United
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States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers so selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Note. If the Interest Rate Basis is the Commercial Paper Rate, the Funding Note shall be deemed to be a “Commercial Paper Rate Note.” A Commercial Paper Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as such rate is published in H.15(519) under the heading
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“Commercial Paper--Nonfinancial”; or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Funding Note Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purposes of displaying the applicable rate, under the caption “Commercial Paper--Nonfinancial”; or (3) if the rate referred to in clause (3) is not published by 3:00 P.M., New York City time, on the Funding Note Calculation Date, then the Commercial Paper Rate as calculated by the Funding Note Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3) above, the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 |
x 100 |
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360 - (D x M) |
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where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. |
Constant Maturity Swap Rate” means: (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276e as of 11:00 A.M., New York City time, on the particular Interest Determination Date; or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated
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maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Funding Note Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time. “Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Funding Note Calculation Agent, after consultation with Allstate Life.
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(E) |
Federal Funds Rate Note. If the Interest Rate Basis is the Federal Funds Rate, the Funding Note shall be deemed to be a “Federal Funds Rate Note”. A Federal Funds Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. “Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page FEDFUNDS1. |
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(F) |
LIBOR Note. If the Interest Rate Basis is LIBOR (as defined below), the Funding Note shall be deemed to be a “LIBOR Note”. A LIBOR Note will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Funding Note Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day preceding the related Interest Reset Date. |
“LIBOR” means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Funding Note Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Funding Note Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Funding Note Calculation Agent (after consultation with Allstate Life) to provide the Funding Note
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Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Funding Note Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Funding Note Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(G) |
Prime Rate Note. If the Interest Rate Basis is the Prime Rate, the Funding Note shall be deemed to be “Prime Rate Note.” Prime Rate Note will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Funding Note Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. |
“Prime Rate” means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date; or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Funding Note Calculation Agent (after consultation with Allstate Life); or (5)
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if the banks so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Reuters Screen US PRIME 1 Page” means the display on Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks.
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(H) |
Treasury Rate Note. If the Interest Rate Basis is the Treasury Rate, the Funding Note shall be deemed to be a “Treasury Rate Note.” A Treasury Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below). |
“Treasury Rate” means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”); or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury; or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent(after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof; or (7) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N |
x 100 |
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360 - (D x M) |
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where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(I) |
Regular Floating Rate Note. Unless the Funding Note is designated as a Floating Rate/Fixed Rate Note or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, such Note that bears interest at floating rates will be a Regular Floating Rate Note and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on a Regular Floating Rate Note is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(J) |
Floating Rate/Fixed Rate Note. If the Funding Note is designated as a “Floating Rate/Fixed Rate Note” on the face hereof, such Note that bears interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on a Floating Rate/Fixed Rate Note is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
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SECTION 4. Optional Redemption. If any Initial Redemption Date is specified on the face hereof, Global Funding may redeem the Funding Note prior to the Stated Maturity Date at its option on any Business Day on or after the Date Initial Redemption in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof at the applicable Redemption Price (as defined below) together with any unpaid interest accrued on the Funding Note, any Additional Amounts and other amounts payable with respect thereto, as of the Redemption Date. Unless otherwise specified in the Funding Note Indenture or on the face hereof, Global Funding shall give a notice of such redemption to the Holder of any portion of the Funding Note to be redeemed not more than 60 nor less than 30 days prior to the Redemption Date. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of the Funding Note to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount the Funding Note to be redeemed.
SECTION 5. Sinking Fund. Unless otherwise specified on the face hereof, the Funding Note will not be subject to, or entitled to the benefit of, any sinking fund.
SECTION 6. Modifications and Amendments. The Funding Note Indenture contains provisions permitting Global Funding and the Funding Note Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Funding Note Indentures for limited purposes and take other actions set forth in the Funding Note Indenture, and (2) with the consent of the Holder or Holders of not less than 662/3% of the outstanding principal amount of the Funding Note, evidenced as provided in the Funding Note Indenture, to execute Supplemental Funding Note Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Funding Note Indenture or any Supplemental Funding Note Indenture or modifying in any manner the rights of the Holder or Holders of the Funding Note subject to spe cified limitations.
SECTION 7. Obligations Unconditional. No reference herein to the Funding Note Indenture and no provision of the Funding Note or of the Funding Note Indenture shall alter or impair the obligation of Global Funding, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Funding Note at the places, at the respective times, at the rate, and in the coin or currency, herein prescribed.
SECTION 8. Collateral. Pursuant to the Funding Note Indenture, Global Funding will grant a security interest in, pledge and collaterally assign the Collateral specified on the face hereof to the Funding Note Indenture Trustee. The Funding Note will be secured by the Security Interest in the Collateral in favor of the Funding Note Indenture Trustee for the benefit of each Holder of the Funding Note and each other person for whose benefit the Funding Note Indenture Trustee is or will be holding the Collateral (the “Secured Parties”).
SECTION 9. Security; Limited Recourse. The Funding Note is solely the obligation of Global Funding, and will not be guaranteed by any person, including but not limited to the Funding Agreement Provider, any Allstate Life Global Funding Trust, any Agent, the Global Funding Trust Beneficial Owner, the Delaware Trustee, the Funding Note Indenture Trustee or any of their affiliates. Global Funding’s obligations under the Funding Note will be secured by all of Global Funding’s rights and title in one or more Funding Agreement(s) issued by the Funding Agreement Provider and other rights and assets included in the applicable Collateral. The Holder or Holders of the Funding Note have no direct contractual rights against the Funding Agreement Provider under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to the Funding Agreement Provider will belong to Global Funding, its successors and permitted assignees. Global Funding has pledged and collaterally assigned each Funding Agreement to the Funding Note Indenture Trustee and has granted the Security Interest in the Collateral to the Funding Note Indenture Trustee for the benefit of the Secured Parties. Recourse to the Funding Agreement Provider under each Funding Agreement will be enforceable only by the Funding Note Indenture Trustee on behalf of the Secured Parties.
SECTION 10. Events of Default. If one or more Events of Default, as defined in the Funding Note Indenture, shall have occurred and be continuing with respect to the Funding Note, then, and in every such event, unless the principal of the Funding Note shall have already become due and payable, the entire principal and premium (if any) of the Funding Note, any interest accrued thereon, and any Additional Amounts due and owing
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and any other amounts payable with respect thereto, may be declared to be, and upon any such declaration the same shall become immediately, due and payable; provided that, with respect to certain Events of Default, without any notice to Global Funding or any other act by the Funding Note Indenture Trustee or any Holder of the Funding Note, the entire principal and premium (if any) of the Funding Note, any interest accrued thereon, and any Additional Amounts due and owing, and any other amounts payable with respect thereto, shall become immediately due and payable without presentment, demand, protest or other notice of any kind. If the Funding Note is a Discount Note, the amount of principal of the Funding Note that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 11. Withholding; Additional Amounts. All amounts due in respect of the Funding Note will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax payments on the Funding Note unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, Global Funding will not pay any Additional Amounts to the Holders of the Funding Note in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem or repay the Funding Note and shall not constitute an Event of Default.
SECTION 12. Listing. Unless otherwise specified on the face hereof, the Funding Note will not be listed on any securities exchange.
SECTION 13. No Recourse. Notwithstanding anything to the contrary contained in the Funding Note Indenture, or the Funding Note Certificate or Supplemental Funding Note Indenture, none of the Funding Agreement Provider, its officers, directors, affiliates, employees or agents, or any of the Delaware Trustee, the Funding Note Indenture Trustee or the Global Funding Trust Beneficial Owner, or any of their officers, directors, affiliates, employees or agents (the “Non-recourse Parties”) will be personally liable for the payment of any principal, interest or any other sums at any time owing under the terms of the Funding Note. If any Event of Default shall occur with respect to the Funding Note, the right of the Holders of the Funding Note and the Funding Note Indenture Trustee on behalf of such Holders in connection with a claim on the Funding Note shall be limited solely to a proceeding against the Collateral. Neither the Holders nor the Funding Note Indenture Trustee on behalf of the Holders will have the right to proceed against the Non-recourse Parties to enforce the Funding Note (except that to the extent they exercise their rights, if any, to seize the relevant Funding Agreement, they may enforce the relevant Funding Agreement against the Funding Agreement Provider) or for any deficiency judgment remaining after foreclosure of any property included in the Collateral.
SECTION 14. Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Funding Note shall be governed by, and construed in accordance with, the laws of the State of New York.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto Please Insert Social Security or Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Security of ALLSTATE LIFE GLOBAL FUNDING and does hereby irrevocably constitute and appoint attorney to transfer said Security on the books of the Issuer, with full power of substitution in the premises.
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Dated: |
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT 10.3
FORM OF SECURITY FOR
FUNDING NOTE RELATED TO SECURED MEDIUM TERM NOTES ISSUES UNDER THE
SECURED MEDIUM TERM NOTES PROGRAM
[FACE OF SECURITY]
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CUSIP No.: |
ALLSTATE LIFE GLOBAL FUNDING
FUNDING NOTE
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Title of Funding Note: |
Stated Maturity Date: |
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Trust: |
Securities Exchange Listing: [ ] Yes [ ] No. If yes, |
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Principal Amount: $ |
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Original Issue Date: |
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Issue Price: |
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Interest Rate or Formula: |
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Fixed Rate Note: [ ] Yes [ ] No. If yes, |
Floating Rate Note: [ ] Yes [ ] No. If yes, |
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Interest Rate: |
Regular Floating Rate Note: [ ] |
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Interest Payment Dates: |
Floating Rate/Fixed Rate Note: [ ] |
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Day Count Convention: |
Inverse Floating Rate Note: [ ] |
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Additional/Other Terms: |
Interest Rate: |
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Amortizing Note: [ ] Yes [ ] No. If yes, |
Interest Rate Basis(es): |
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Amortization Schedule: |
CD Rate [ ] |
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Additional/Other Terms: |
CMT Rate [ ] |
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Discount Note: [ ] Yes [ ] No. If yes, |
Commercial Paper Rate [ ] |
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Total Amount of Discount: |
Constant Maturity Swap Rate [ ] |
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Initial Accrual Period of Discount: |
Eleventh District Cost of Funds Rate [ ] |
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Additional/Other Terms: |
Federal Funds Rate [ ] |
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Redemption Provisions: [ ] Yes [ ] No. If yes, |
LIBOR [ ] |
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Initial Redemption Date: |
EURIBOR [ ] |
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Initial Redemption Percentage: |
Prime Rate [ ] |
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Annual Redemption Percentage Reduction, |
Treasury Rate [ ] |
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if any: |
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Additional/Other Terms: |
If LIBOR: |
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Repayment Provisions: [ ] Yes [ ] No. If yes, |
LIBOR Reuters Page: |
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Optional Repayment Date(s): |
LIBOR Currency: |
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Optional Repayment Price: |
If CMT Rate: |
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Additional/Other Terms: |
Designated CMT Reuters Page: |
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Regular Interest Record Date(s): |
If CMT Reuters Page FEDCMT: |
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Sinking Fund, if any: |
[ ] Weekly Average |
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Specified Currency: |
[ ] Monthly Average |
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Exchange Rate Agent: |
Designated CMT Maturity Index: |
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Funding Note Calculation Agent: |
Index Maturity: |
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Authorized Denominations: |
Spread (+/-), if any: |
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Collateral: The right, title and interest of the Trust in and to: |
Spread Multiplier, if any: |
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(i) Allstate Life Insurance Company Funding |
Initial Interest Rate, if any: |
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Agreement No(s). [__________]; (ii) all proceeds in respect of such |
Initial Interest Reset Date: |
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Funding Agreement(s); and (iii) all books and records |
Interest Reset Dates: |
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(including, without limitation, computer programs, |
Interest Determination Date(s): |
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printouts, and other computer materials and files) |
Interest Payment Dates: |
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pertaining to such Funding Agreement(s). |
Maximum Interest Rate, if any: |
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Additional Amounts to be Paid for Withholding Tax: |
Minimum Interest Rate, if any: |
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[ ] Yes [ ] No |
Fixed Rate Commencement Date, if any: |
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Floating Interest Rate, if any: |
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Fixed Interest Rate, if any: |
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Day Count Convention: |
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Additional/Other Terms: |
This note certificate (the “Funding Note Certificate”) represents a duly authorized funding note (the “Funding Note”) of Allstate Life Global Funding, a statutory trust organized under the laws of the State of Delaware (“Global Funding”). The Funding Note is being issued in connection with the issuance and sale by the trust specified above (the “Trust”) of the trust notes identified on Annex A to that certain series instrument to which Global Funding and the Trust are parties (the “Series Instrument”) (the “Trust Notes”). The Funding Note is being issued under the Funding Note Indenture, effective as of the date hereof (as amended or supplemented from time to time, the “Funding Note Indenture”) among Global Funding and the other persons specified therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed in the Standard Funding Note Indenture Terms, which are incorporated by reference in and form a part of the Funding Note Indenture (as amended or supplemented from time to time, the “Standard Funding Note Indenture Terms”).
Subject to the immediately following paragraph, Global Funding, for value received, hereby promises to pay to the Holder or Holders of the Funding Note on the Maturity Date (as defined below) (or on the date of redemption or repayment by Global Funding) the principal amount of the Funding Note and, if so specified above, to pay interest from time to time on the Funding Note from the Original Issue Date specified above (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof and as specified above, until the principal of the Funding Note is paid or made available for payment and to pay such other amounts due and owing with respect to the Funding Note.
This Funding Note Certificate shall be surrendered for cancellation by or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture Trustee, immediately upon the assignment by Global Funding to, or as directed by, the Trust of each funding agreement identified on Exhibit A to the Closing Instrument (each, a “Funding Agreement”) in accordance with the terms of the Funding Note and the Coordination Agreement, and such cancellation shall operate as a redemption and satisfaction of the Funding Note.
On any exchange or purchase and cancellation of the Funding Note, details of such exchange or purchase and cancellation shall be entered in the records of Global Funding. Upon any such exchange or purchase and cancellation, the principal amount of the Funding Note shall be charged by the principal amount so exchanged or purchased and cancelled, as provided in the Standard Funding Note Indenture Terms.
Unless otherwise set forth above, if the Funding Note is subject to an Annual Redemption Percentage Reduction as
2
specified above, the Redemption Price of the portion of the Funding Note represented by this Funding Note Certificate shall initially be the Initial Redemption Percentage of the principal amount of the portion of the Funding Note represented by this Funding Note Certificate on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Redemption Percentage Reduction of such principal amount until the Redemption Price is 100% of such principal amount.
The Funding Note will mature on the earlier of the Stated Maturity Date and the Maturity Date (as defined in the Trust Notes) of the Trust Notes (the “Trust Notes Maturity Date”), unless its principal (or, any installment of its principal) becomes due and payable prior to any such date, whether, as applicable, by the declaration of acceleration of maturity, notice of redemption at the option of Global Funding, notice of the Holder’s option to elect repayment or otherwise (the Stated Maturity Date, the Trust Notes Maturity Date or any date prior to any such date on which the Funding Note becomes due and payable, as the case may be, are referred to as the “Maturity Date” with respect to principal of the Funding Note repayable on such date).
Unless otherwise provided above and except as provided in the following paragraph, Global Funding will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Original Issue Date, and on the Maturity Date; provided that any payment of principal, premium, if any, interest or other amounts to be made in accordance with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest Payment Date or on the Maturity Date will be the amount equal to the interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or from and including the date of issue, if no interest has been paid, to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest Period”).
Reference is hereby made to the further provisions of the Funding Note set forth on the reverse hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions shall for all purposes have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional Provisions” apply to the Funding Note as specified above, the Funding Note shall be subject to the terms set forth in such Addendum or such “Other/Additional Provisions.”
The Funding Note or the portion thereof represented by this Funding Note Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Funding Note Indenture Trustee pursuant to the Funding Note Indenture.
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IN WITNESS WHEREOF, Global Funding has caused this instrument to be duly executed on its behalf.
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Dated: Original Issue Date |
ALLSTATE LIFE GLOBAL FUNDING, as Issuer | |
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By: |
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Name: Title: |
CERTIFICATE OF AUTHENTICATION
This Funding Note Certificate is one of the Funding Note Certificates representing the Funding Note described in the within-mentioned Funding Note Indenture.
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Dated: Original Issue Date |
[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as Funding Note Indenture Trustee | |
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By: |
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Authorized Signatory |
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[REVERSE OF DEFINITIVE SECURITY]
SECTION 1 General. This Funding Note is being issued pursuant to the Funding Note Indenture in connection with the issuance and sale by the Trust of the Trust Notes. The Funding Note shall be surrendered for cancellation by or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture Trustee, immediately upon the assignment by Global Funding to, or as directed by, the Trust of each Funding Agreement, and such cancellation shall operate as a redemption of the Funding Note.
SECTION 2 Currency. The Funding Note is denominated in, and payments of principal of, premium, if any, and interest on, if any, and other amounts in respect of, the Funding Note will be in the Specified Currency designated on the face hereof. If the specified currency of the Funding Note is other than U.S. Dollars (or “Foreign Currency Note”), any amounts so payable by Global Funding in the Specified Currency will be converted by the exchange rate agent designated on the face hereof (the “Exchange Rate Agent”) into United States dollars for payment to the registered holders hereof unless otherwise specified on the face hereof or a registered holder elects, in the manner described below, to receive payments in the Specified Currency.
If the Specified Currency for a Foreign Currency Note is not available for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond the control of Global Funding, Global Funding will be entitled to satisfy the obligations to the registered holders of the Foreign Currency Note by making payments in United States dollars based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by Global Funding for the purchase by the quoting dealer of the Specified Currency for United States dollars for settlement on that payment date in the aggregate amount of the Specified Currency payable to all registered holders of the Foreign Currency Note scheduled to receive United States dollar payments and at which the applicable dealer commits to execute a contract. All currency exchange costs will be borne by the relevant registered holders of the Foreign Currency Note by deductions from any payments. If three bid quotations are not available, payments will be made in the Specified Currency.
Registered holders of a Foreign Currency Note may elect to receive all or a specified portion of any payment of principal, premium, if any, and/or interest, if any, in the Specified Currency by submitting a written request to the Funding Note Indenture Trustee at its corporate trust office in The City of New York on or prior to the applicable Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. This written request may be mailed or hand delivered or sent by cable, telex or other form of facsimile transmission. This election will remain in effect until revoked by written notice delivered to the Funding Note Indenture Trustee on or prior to a Regular Interest Record Date or at least fifteen calendar days prior to the Maturity Date, as the case may be. Registered holders of a Foreign Currency Note to be held in the name of a broker or nominee should contact their broker or nominee to determine whether and how an election to receive payments in the Specified Currency may be made.
Unless otherwise specified on the face hereof, if the Specified Currency is other than United States dollars, if the Holder hereof elects to receive payments of principal, premium, if any, and/or interest, if any, in the Specified Currency, the Holder must notify the Funding Note Indenture Trustee of that election on or prior to the fifth Business Day after the applicable Regular Interest Record Date or at least ten calendar days prior to the Maturity Date, as the case may be. If complete instructions are received by the Funding Note Indenture Trustee on or prior to such dates, then the Holder will receive payments in the Specified Currency.
Unless otherwise specified on the face hereof, if payment in the Specified Currency hereon is not available to Global Funding for any required payment of principal, premium, if any, and/or interest, if any, due to the imposition of exchange controls or other circumstances beyond Global Funding’s control, then Global Funding will be entitled to satisfy its obligations by making payments in United States dollars on the basis of the Market Exchange Rate, computed by the Exchange Rate Agent as described above, on the second Business Day prior to the particular payment or, if the Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate. The “Market Exchange Rate” for a Specified Currency other than United States dollars means the noon dollar buying rate in The City of New York for cable transfers for the Specified Currency as certified for customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New York. Any payment in respect hereof made under such circumstances in U.S. Dollars will not constitute an Event of Default under the Funding Note Indenture.
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In the event that a member state of the European Union in whose national currency the Funding Note is denominated becomes a participant member in the third stage of the European economic and monetary union, Global Funding may on or after the date of such occurrence, without the consent of any Holder hereof, redenominate all, but not less than all, of the Principal amount of the Funding Note represented hereby.
All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion and, in the absence of manifest error, shall be conclusive for all purposes and binding on any Holder hereof.
All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.
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SECTION 3 Determination of Interest Rate and Other Payment Provisions. |
Fixed Rate Note. If the Funding Note is designated on the face hereof as a “Fixed Rate Note,” the Funding Note will bear interest from the Original Issue Date until the Maturity Date. Unless otherwise specified on the face hereof, the rate of interest payable on the Funding Note will not be adjusted; unless otherwise specified on the face hereof, interest will be payable on the Interest Payment Dates set forth on the face hereof and at the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, any payments of principal, premium, if any, and/or interest or other amounts required to be made, will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Discount Note. If the Funding Note is designated on the face hereof as a “Discount Note” (as defined below), payments in respect of the Funding Note shall be made as set forth on the face hereof. In the event a Discount Note is redeemed, repaid or accelerated, the amount payable to the Holder of the Discount Note will be equal to the sum of: (1) the Issue Price (increased by any accruals of discount) and, in the event of any redemption of the Discount Note, if applicable, multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid interest accrued on the Discount Note to the date of redemption, repayment or acceleration of maturity, as applicable. For purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment or acceleration of maturity of the Funding Note occurs for a Discount Note, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates for a Discount Note (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to a Discount Note and an assumption that the maturity of such Discount Note will not be accelerated. If the period from the date of issue to the first Interest Payment Date for a Discount Note (the “Initial Period”) is shorter than the compounding period for such Discount Note, a proportionate amount of the yield for an entire compounding period will be accrued. If the Initial Period is longer than the compounding period, then the period will be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Code, certain Discount Notes may not be treated as having original issue discount within the meaning of the Code, and certain Funding Notes other than Discount Notes may be treated as issued with original issue discount for federal income tax purposes. The Funding Note is a “Discount Note” if its Issue Price is less than 100% of the principal amount thereof by more than a percentage equal to the product of 0.25% and the number of full years to the Stated Maturity Date. A Discount Note may not bear any interest currently or may bear interest at a rate that is below market rates at the time of issuance.
Amortizing Note. If the Funding Note is specified on the face hereof as an “Amortizing Note,” the Funding Note shall bear interest at the rate set forth on the face hereof, and payments of principal and interest shall be made as set forth on the face hereof and/or in accordance with SCHEDULE I attached hereto. Unless otherwise specified on the face hereof, interest on the Funding Note will be computed on the basis of a 360-day year of twelve 30-day months. Payments with respect to an Amortizing Note will be applied first to interest due and payable on the Funding Note and then to the reduction of the unpaid principal amount of the Funding Note.
Floating Rate Note. If the Funding Note is specified on the face hereof as a “Floating Rate Note,” interest on the Funding Note shall accrue and be payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate Note, Eleventh District Cost of Funds Rate Note, Federal Funds Rate Note, LIBOR Note, EURIBOR Note, Prime Rate Note or Treasury Rate Note. If the Funding Note is designated on the face hereof as a Floating Rate Note, the face hereof will specify whether the Funding Note is a Regular Floating Rate Note, Inverse Floating Rate Note or Floating Rate/Fixed Rate Note. For the period from the date of issue to, but
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not including, the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset as of and be effective as of each Interest Reset Date.
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(A) |
If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next day that is a Business Day; provided, however, that if the Funding Note is a LIBOR Note or a EURIBOR Note and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the Business Day immediately preceding such Interest Reset Date. |
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(B) |
Unless specified otherwise on the face hereof, Interest Reset Dates are as follows: (1) if the Funding Note resets daily, each Business Day; (2) if the Funding Note resets weekly, other than Treasury Rate Note, the Wednesday of each week; (3) if the Funding Note is a Treasury Rate Note that resets weekly, and except as provided below under “Treasury Rate Note,” the Tuesday of each week; (4) if the Funding Note resets monthly, the third Wednesday of each month, unless the Eleventh District Cost of Funds Rate is the Interest Rate Basis (as defined below) applicable to the Funding Note, in which case the Funding Note will reset the first calendar day of the month; (5) if the Funding Note resets quarterly, the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued; (6) if the Funding Note resets semiannually, the third Wednesday of each of the two months specified on the face hereof; and (7) if the Funding Note resets annually, the third Wednesday of the month specified on the face hereof; provided, however, that with respect to a Floating Rate/Fixed Rate Note, the rate of interest thereon will not reset after the particular Fixed Rate Commencement Date specified on the face hereof (the “Fixed Rate Commencement Date”). |
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(C) |
Accrued interest is calculated by multiplying the principal amount of the Floating Rate Note by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the particular Interest Period. The interest factor for each day will be computed by dividing the interest rate applicable to such day by 360, in the case of a Floating Rate Note as to which the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an applicable Interest Rate Basis, or by the actual number of days in the year, in the case of a Floating Rate Note as to which the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. In the case of a Floating Rate Note as to which the Constant Maturity Swap Rate is the Interest Rate Basis, the interest factor will be computed by dividing the number of days in the interest period by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the last day of the interest period is the 31st day of a month but the first day of the interest period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the last day of the interest period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)). The interest factor for a Floating Rate Note as to which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only the applicable Interest Rate Basis specified on the face hereof applied. The interest rate shall be set forth on the face hereof. For purposes of making the foregoing calculation, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. Unless otherwise specified on the face hereof, the interest rate that is effective on the applicable Interest Reset Date will be determined on the applicable Interest Determination Date and calculated on the applicable Funding Note Calculation Date (as defined below). “Funding Note Calculation Date” means the date by which the Funding Note Calculation Agent designated on the face hereof, is to calculate the interest rate which will be the earlier of (1) the tenth calendar day after the particular Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. |
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(D) |
Unless otherwise specified on the face hereof, all percentages resulting from any calculation on a Floating Rate Note will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. All dollar amounts used in or resulting from any calculation on a Floating Rate Note will be rounded, in the case of United States dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards). |
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(E) |
Unless otherwise specified on the face hereof, if the Funding Note is designated on the face hereof as a |
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Floating Rate Note, if any Interest Payment Date (other than the Maturity Date for the Funding Note) would otherwise be a day that would not be a Business Day, such Interest Payment Date would be postponed to the next succeeding Business Day; provided, however, that if the Funding Note is a LIBOR Note or a EURIBOR Note and such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. Unless otherwise specified on the face hereof, if the Funding Note is designated on the face hereof as a Floating Rate Note, if the Maturity Date of the Funding Note falls on a day this is not a Business Day, Global Funding will make the required payment of principal, premium, if any, and interest or other amounts on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.
Unless otherwise specified on the face hereof and except as provided below, interest will be payable as follows: (1) if the Interest Reset Date for the Funding Note is daily, weekly or monthly, interest will be payable on the third Wednesday of each month or on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, as specified on the face hereof, (2) if the Interest Reset Date for the Funding Note is quarterly, interest will be payable on the third Wednesday of every third calendar month, beginning in the third calendar month following the month in which the Notes were issued, (3) if the Interest Reset Date for the Funding Note is semiannually, interest will be payable on the third Wednesday of each of two months of each year specified on the face hereof, (4) if the Interest Reset Date for the Funding Note is annually, interest will be payable on the third Wednesday of the month of each year specified on the face hereof. In each of these cases, the Maturity Date will also be an Interest Payment Date.
If specified on the face hereof, the Funding Note may have either or both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for a Floating Rate Note cannot ever exceed such Maximum Interest Rate and in the event that the interest rate on any Interest Reset Date would exceed such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If a Minimum Interest Rate is so designated, the interest rate that may accrue during any Interest Period for a Floating Rate Note cannot ever be less than such Minimum Interest Rate and in the event that the interest rate on any Interest Reset Date would be less than such Minimum Interest Rate (as if no Minimum Interest Rate were in effect) then the interest rate on such Interest Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the contrary contained herein, if the Funding Note is designated on the face hereof as a Floating Rate Note, the interest rate on the Funding Note shall not exceed the maximum interest rate permitted by applicable law.
All determinations of interest by the Funding Note Calculation Agent designated on the face hereof will, in the absence of manifest error, be conclusive for all purposes and binding on the Holder of the Funding Note and neither the Funding Note Indenture Trustee nor the Funding Note Calculation Agent shall have any liability to the Holder of the Funding Note in respect of any determination, calculation, quote or rate made or provided by the Funding Note Calculation Agent. Upon request of the Holder of the Funding Note, the Funding Note Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to the Funding Note. If the Funding Note Calculation Agent is incapable or unwilling to act as such or if the Funding Note Calculation Agent fails duly to establish the interest rate for any interest accrual period or to calculate the interest amount or any other requirements, Global Funding will appoint a successor to act as such in its place. The Funding Note Calculation Agent may not resign its duties until a successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on the Funding Note on and after the first Interest Reset Date shall be the interest rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof (the “Interest Rate Basis”), the base rate, plus or minus the Spread, if any, specified on the face hereof and/or multiplied by the Spread Multiplier, if any, specified on the face hereof.
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(A) |
CD Rate Note. If the Interest Rate Basis is the CD Rate, the Funding Note shall be deemed to be a “CD Rate Note”. A CD Rate Note will bear interest at the interest rate calculated with reference to the CD Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the CD Rate on each Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“CD Rate” means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as
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published in H.15(519) (as defined below) under the caption “CDs (secondary market)”; or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of the particular Index Maturity as published in the H.15 Daily Update (as defined below) or other recognized electronic source used for the purpose of displaying the applicable rate under the heading “CDs (secondary market)”; or (3) if the rate referred to in clause (2) is not yet published in either H.15(519) or the H.15 Daily Update by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, then the CD Rate will be the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time on that Interest Determination Date of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent (after consultation with Allstate Life Insurance Company ("Allstate Life")) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time; or (4) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date; provided that if no CD Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“H.15(519)” means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.
“H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication.
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(B) |
CMT Rate Note. If the Interest Rate Basis is the CMT Rate, the Funding Note shall be deemed to be a “CMT Rate Note”. A CMT Rate Note will bear interest at the interest rate calculated with reference to the CMT Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the CMT Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the second Business Day prior to the Interest Reset Date. |
“CMT Rate” means: (1) if Reuters Page FRBCMT is specified on the face hereof: (a) the percentage equal to the yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) under the caption “Treasury constant maturities”, as the yield is displayed on the Reuters Service (“Reuters”) (or any successor service) on page FRBCMT (or any other page as may replace the specified page on that service) (“Reuters Page FRBCMT”), for the particular Interest Determination Date; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or is not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or is not so published by 3:00 P.M. New York City time, on that Interest Determination Date, the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Funding Note Calculation Agent determines to be comparable to the rate formerly displayed on Reuters and published in H.15(519); or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date reported, based on their written records, by three leading primary United States government securities dealers in The City of New York (which may include the Agents or their affiliates) (each, a “Reference Dealer”), selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five
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Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate; or (2) if Reuters Page FEDCMT is specified on the face hereof: (a) the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the Index Maturity specified on the face hereof as published in H.15(519) opposite the caption “Treasury constant maturities”, as the yield is displayed on Reuters (or any successor service) (on page FEDCMT or any other page as may replace the specified page on that service) (“Reuters Page FEDCMT”), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (b) if the rate referred to in clause (a) does not so appear on Reuters Page FEDCMT or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the percentage equal to the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption “Treasury constant maturities”; or (c) if the rate referred to in clause (b) does not so appear in H.15(519) or if not so published by 3:00 P.M., New York City time, on that Interest Determination Date, the one-week or one-month, as specified on the face hereof, average yield for United States Treasury securities at “constant maturity” having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls; or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market offered rates at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than one year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time; or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation
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Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated; or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date reported based on their written records, by three Reference Dealers selected by the Funding Note Calculation Agent (after consultation with Allstate Life) from five Reference Dealers so selected by the Funding Note Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for the most recently issued United States Treasury securities with an original maturity of approximately the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time; or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated; or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date; provided that if no CMT Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity greater than the Index Maturity specified on the face hereof have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used.
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(C) |
Commercial Paper Rate Note. If the Interest Rate Basis is the Commercial Paper Rate, the Funding Note shall be deemed to be a “Commercial Paper Rate Note”. A Commercial Paper Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Commercial Paper Rate on each applicable Interest Determination Date. The Interest Determination Date is the second Business Day preceding the related Interest Reset Date. |
“Commercial Paper Rate” means: (1) the Money Market Yield (calculated as described below) on the Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as such rate is published in H.15(519) under the heading “Commercial Paper—Nonfinancial”; or (2) if the rate referred to in clause (1) is not published by 3:00 P.M., New York City time, on the Funding Note Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield on the particular Interest Determination Date of the rate for commercial paper having the particular Index Maturity as published on H.15 Daily Update or such other recognized electronic source used for the purposes of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not published by 3:00 P.M., New York City time, on the Funding Note Calculation Date, then the Commercial Paper Rate as calculated by the Funding Note Calculation Agent shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent (after consultation with Allstate Life) for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is “Aa” by Moody’s or the equivalent from another nationally recognized statistical rating organization; or (4) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date; provided that if no Commercial Paper Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Money Market Yield” shall be a yield (expressed as a percentage) calculated in accordance with the following formula:
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Money Market Yield = |
D x 360 |
x 100 |
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360 - (D x M) |
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where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the applicable Interest Period.
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(D) |
Constant Maturity Swap Rate Notes. If the Interest Rate Basis is the Constant Maturity Swap Rate, the Notes shall be deemed to be “Constant Maturity Swap Rate Notes.” Constant Maturity Swap Rate Notes will bear interest at the interest rate calculated with reference to the Constant Maturity Swap Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Constant Maturity Swap Rate on each applicable Interest Determination Date. The Interest Determination Date is the second U.S. Government Securities Business Day (as defined below) preceding the related Interest Reset Date; provided, however, that if, after attempting to determine the Constant Maturity Swap Rate (as described below), such rate is not determinable for a particular Interest Determination Date (the “Original Interest Determination Date”), then such Interest Determination Date shall be the first U.S. Government Securities Business Day preceding the Original Interest Determination Date for which the Constant Maturity Swap Rate can be determined as described below. Constant Maturity Swap Rate” means (1) the rate for U.S. Dollar swaps with the designated maturity specified on the face hereof, expressed as a percentage, which appears on the Reuters Screen TGM42276 as of 11:00 A.M., New York City time, on the particular Interest Determination Date, or (2) if the rate referred to in clause (1) does not appear on the Reuters Screen TGM42276 by 2:00 P.M., New York City time, on such Interest Determination Date, a percentage determined on the basis of the mid-market semi-annual swap rate quotations provided by the Reference Banks (as defined below) as of approximately 11:00 A.M., New York City time, on such Interest Determination Date, and, for this purpose, the semi-annual swap rate means the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar interest rate swap transaction with a term equal to the designated maturity specified in the face hereof commencing on the Interest Reset Date and in a Representative Amount (as defined below) with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified on the face hereof. The Funding Note Calculation Agent will request the principal New York City office of each of the Reference Banks to provide a quotation of its rate. If at least three quotations are provided, the rate for that Interest Determination Date will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest). |
“U.S. Government Securities Business Day” means any day except for Saturday, Sunday, or a day on which The Bond Market Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.
“Reference Banks” mean five leading swap dealers in the New York City interbank market, selected by the Funding Note Calculation Agent, after consultation with Allstate Life.
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(E) |
Eleventh District Cost of Funds Rate Note. If the Interest Rate Basis is the Eleventh District Costs of Funds Rate, the Funding Note shall be deemed to be a “Eleventh District Cost of Funds Rate Note”. An Eleventh District Cost of Funds Note will bear interest at the interest rate calculated with reference to the Eleventh District Cost of Funds Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Eleventh District Cost of Rate on each applicable Interest Determination Date. The applicable Interest Determination Date is the last working day of the month immediately preceding the related Interest Reset Date on which the Federal Home Loan Bank of San Francisco publishes the Eleventh District Index. The “Eleventh District Cost of Funds Rate” means (1) the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which the |
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particular Interest Determination Date falls as set forth under the caption “11th District” on the display on Reuters (or any successor service) on page COFI/ARMS (or any other page as may replace the specified page on that service) (“Reuters Page COFI/ARMS”) as of 11:00 A.M., San Francisco time, on that Interest Determination Date, or (2) if the rate referred to in clause (1) does not so appear on Reuters Page COFI/ARMS, the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the “Eleventh District Index”) by the Federal Home Loan Bank of San Francisco as the cost of funds for the calendar month immediately preceding that Interest Determination Date, or (3) if the Federal Home Loan Bank of San Francisco fails to announce the Eleventh District Index on or prior to the particular Interest Determination Date for the calendar month immediately preceding that Interest Determination Date, the Eleventh District Cost of Funds Rate in effect on the particular Interest Determination Date; provided that if no Eleventh District Cost of Funds Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
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(F) |
EURIBOR Note. If the Interest Rate Basis is EURIBOR (as defined below), the Funding Note shall be deemed to be a “EURIBOR Note”. A EURIBOR Note will bear interest at the rates (calculated with references to the European inter-bank offered rate for deposits in Euro, or “EURIBOR”, and the Spread and/or Spread Multiplier, if any) specified on the face hereof. |
“EURIBOR” means, with respect to any Interest Determination Date relating to a EURIBOR Note or if the Funding Note bears interest at a floating rate for which the interest rate is determined with reference to EURIBOR (a “EURIBOR Interest Determination Date”), the rate for deposits in Euros as sponsored, calculated and published jointly by the European Banking Federation and ACI—The Financial Market Association, or any company established by the joint sponsors for purposes of compiling and publishing those rates, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, as the rate appears on Reuters (or any successor service) on page EURIBOR 01 (or any other page as may replace that specified page on the service) (“Reuters Page EURIBOR 01”) as of 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date. If such rate does not appear on Reuters Page EURIBOR 01, or is not so published by 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date, such rate will be calculated by the Funding Note Calculation Agent and will be the arithmetic mean of at least two quotations obtained by the Funding Note Calculation Agent after requesting the principal Euro-zone (as defined below) offices of four major banks in the Euro-zone interbank market selected by the Funding Note Calculation Agent (after consultation with Allstate Life) to provide the Funding Note Calculation Agent with its offered quotation for deposits in Euros for the period of the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date, to prime banks in the Euro-zone interbank market at approximately 11:00 A.M., Brussels time, on the applicable EURIBOR Interest Determination Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euro in the market at that time. If fewer than two such quotations are so provided, the rate on the applicable EURIBOR Interest Determination Date will be calculated by the Funding Note Calculation Agent and will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date by four major banks in the Euro-zone selected by the Funding Note Calculation Agent (after consultation with Allstate Life) for loans in Euro to leading European banks, having the Index Maturity specified on the face hereof, commencing on the applicable Interest Reset Date and in a principal amount not less than the equivalent of $1 million in Euros that is representative for a single transaction in Euros in the market at that time. If the banks so selected by the Funding Note Calculation Agent are not quoting as mentioned above, EURIBOR will be EURIBOR in effect on the applicable EURIBOR Interest Determination Date; provided that if no EURIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Euro-zone” means the region comprised of member states of the European Union that have adopted the single currency in accordance with the Treaty Establishing the European Community, as amended by the Treaty on European Union.
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(G) |
Federal Funds Rate Note. If the Interest Rate Basis is the Federal Funds Rate, the Funding Note shall be deemed to be a “Federal Funds Rate Note”. A Federal Funds Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Federal Funds Rate on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. “Federal Funds Rate” means (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption “EFFECT” and displayed on Reuters (or any successor service) on page FEDFUNDS1 (or any other page as may replace the specified page on that service) (“Reuters Page FEDFUNDS1”), or (2) if the rate referred to in clause (1) does not so appear on Reuters Page FEDFUNDS1 or is not so published by 5:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds (Effective)”, or (3) if the rate referred to in clause (2) is not so published by 5:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate will be the rate for the first preceding day for which such rate is set forth in H.15(519) under the caption “Federal Funds (Effective)”, as such rate is displayed on Reuters Page FEDFUNDS1. |
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(H) |
LIBOR Note. If the Interest Rate Basis is LIBOR (as defined below), the Funding Note shall be deemed to be a “LIBOR Note”. A LIBOR Note will bear interest for each Interest Period at the interest rate calculated with reference to LIBOR and the Spread or Spread Multiplier, if any. On each applicable Interest Determination Date the Funding Note Calculation Agent will determine LIBOR. The applicable Interest Determination Date is the second London Banking Day preceding the related Interest Reset Date. |
“LIBOR” means: (1) the rate for deposits in the LIBOR Currency (as defined below) having the Index Maturity specified on the face hereof, commencing on the related Interest Reset Date, that appears on the LIBOR Page (as defined below) as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if no rate appears on the particular Interest Determination Date on the LIBOR Page as specified in clause (1), the rate calculated by the Funding Note Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Funding Note Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents), in the London interbank market selected by the Funding Note Calculation Agent (after consultation with Allstate Life) to provide the Funding Note Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (3) if fewer than two offered quotations referred to in clause (2) are provided as requested, the rate calculated by the Funding Note Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents), in that Principal Financial Center selected by the Funding Note Calculation Agent (after consultation with Allstate Life) for loans in the LIBOR Currency to leading European banks, having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if the banks so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (3), LIBOR in effect on the particular Interest Determination Date; provided that if no LIBOR is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“LIBOR Currency” means the currency specified on the face hereof as to which LIBOR shall be calculated or, if no currency is specified on the face hereof, United States dollars.
“LIBOR Page” means the display on Reuters (or any successor service) on the page specified on the face hereof (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR currency.
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“London Banking Day” means a day on which commercial banks are open for business (including dealings in the LIBOR Currency) in London.
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(I) |
Prime Rate Note. If the Interest Rate Basis is the Prime Rate, the Funding Note shall be deemed to be a “Prime Rate Note”. A Prime Rate Note will bear interest for each Interest Reset Date calculated with reference to the Prime Rate and the Spread or Spread Multiplier, if any, subject to the Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on the face hereof. The Funding Note Calculation Agent will determine the Prime Rate for each Interest Reset Date on each applicable Interest Determination Date. The Interest Determination Date is the Business Day immediately preceding the related Interest Reset Date. “Prime Rate” means (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption “Bank Prime Loan”, or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Bank Prime Loan”, or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date, or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Funding Note Calculation Agent (after consultation with Allstate Life), or (5) if the banks so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date; provided that if no Prime Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate. “Reuters Screen US PRIME 1 Page” means the display on the Reuters (or any successor service) on the “US PRIME 1” page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks. |
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(J) |
Treasury Rate Note. If the Interest Rate Basis is the Treasury Rate, the Funding Note shall be deemed to be a “Treasury Rate Note”. A Treasury Rate Note will bear interest for each Interest Reset Date at the interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent will determine the Treasury Rate on each Treasury Rate Determination Date (as defined below). “Treasury Rate” means (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified on the face hereof under the caption “INVESTMENT RATE” on the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace that page on that service) (“Reuters USAUCTION10”) or page USAUCTION11(or any other page as may replace that page on that service) (“Reuters USAUCTION11”), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Auction High”, or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New |
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York City time, on the related Funding Note Calculation Date, the rate on the particular Interest Determination Date calculated by the Funding Note Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Funding Note Calculation Agent (after consultation with Allstate Life), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified on the face hereof, or (7) if the dealers so selected by the Funding Note Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date; provided that if no Treasury Rate is then in effect, the interest rate that will be effective as of the next Interest Reset Date will be the Initial Interest Rate.
“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:
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Bond Equivalent Yield = |
D x N |
x 100 |
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360 - (D x M) |
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where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Period.
The “Treasury Rate Determination Date” for each Interest Reset Date means the day in the week in which the related Interest Reset Date falls on which day Treasury Bills are normally auctioned (i.e., Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.
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(K) |
Regular Floating Rate Note. Unless the Funding Note is designated as a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note, or as having an Addendum attached or having other/additional provisions apply, in each case relating to a different interest rate formula, the Funding Note that bears interest at floating rates will be a Regular Floating Rate Note and will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, as specified on the face hereof, the rate at which interest on a Regular Floating Rate Note is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate. |
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(L) |
Floating Rate/Fixed Rate Note. If the Funding Note is designated as a “Floating Rate/Fixed Rate Note” on the face hereof, the Funding Note that bears interest at floating rates will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Commencing on the first Interest Reset Date, the rate at which interest on a Floating Rate/Fixed Rate Note is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, as specified on the face hereof; and the interest rate in effect commencing on the Fixed Rate Commencement Date will be the Fixed Interest Rate, if specified on the face hereof, or, if not so specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. |
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(M) |
Inverse Floating Rate Note. If the Funding Note is designated as an “Inverse Floating Rate Note” on the face hereof, the Inverse Floating Rate shall be equal to the Fixed Interest Rate minus the rate determined by reference to the applicable Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any; provided, however, that interest on an Inverse Floating Rate Note will not be less than zero. Commencing on the first Interest Reset Date, the rate at which interest on an Inverse Floating Rate Note is payable will be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the date of issue to the first |
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Interest Reset Date will be the Initial Interest Rate.
SECTION 4 Optional Redemption. If any Initial Redemption Date is specified on the face hereof, Global Funding may redeem the Funding Note prior to the Stated Maturity Date at its option on any Business Day on or after the Date Initial Redemption in whole or from time to time in part in increments of $1,000 or any other integral multiple of an authorized denomination specified on the face hereof at the applicable Redemption Price (as defined below) together with any unpaid interest accrued on the Funding Note, any Additional Amounts and other amounts payable with respect thereto, as of the Redemption Date. Unless otherwise specified in the Funding Note Indenture or on the face hereof, Global Funding shall give a notice of such redemption to the Holder of any portion of the Funding Note to be redeemed not more than 60 nor less than 30 days prior to the Redemption Date. “Redemption Price” means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of the Funding Note to be redeemed. The Initial Redemption Percentage, if any, shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid amount the Funding Note to be redeemed.
SECTION 5 Sinking Funds and Amortizing Note. Unless otherwise specified on the face hereof or unless the Funding Note is an Amortizing Note, the Funding Note will not be subject to, or entitled to the benefit of, any sinking fund. If it is specified on the face hereof that the Funding Note is an Amortizing Note, Global Funding will make payments combining principal and interest on the dates and in the amounts set forth in the table appearing in SCHEDULE I, attached to this Funding Note Certificate. If the Funding Note is an Amortizing Note, payments made on the Funding Note will be applied first to interest due and payable on each such payment date and then to the reduction of the unpaid principal amount.
SECTION 6 Optional Repayment. If so specified on the face hereof, the Holder or Holders of the Funding Note may require Global Funding to repay the Funding Note on the Optional Repayment Date(s) specified on the face hereof, in whole or from time to time, in part, in increments of U.S.$1,000 or any other integral multiple of an authorized denomination specified on the face hereof (provided that any remaining principal amount of the Funding Note shall be at least U.S.$1,000 or any other integral multiple of an authorized denomination specified on the face hereof), at a repayment price equal to 100% of the unpaid principal amount of the Funding Note to be repaid, together with unpaid interest accrued thereon to the Repayment Date (as defined below) and any other amounts then due and owing. For the Funding Note or any portion thereof to be so repaid, the Funding Note Indenture Trustee must receive at its Corporate Trust Office not more than 60 nor less than 30 calendar days prior to the applicable Repayment Date, a properly completed Option to Elect Repayment form, which is attached hereto as Annex A, forwarded by the Holder or Holders of the Funding Note. Exercise of such repayment option shall be irrevocable. As used herein, the term “Repayment Date” shall mean the date fixed for repayment in accordance with the repayment provisions specified above.
SECTION 7 Tax Redemption. If (i) Global Funding is required at any time to pay Additional Amounts (as defined below) or if Global Funding is obligated to withhold or deduct any United States taxes with respect to any payment under the Funding Note, as set forth in the Funding Note Certificate, or if there is a material probability that Global Funding will become obligated to withhold or deduct any such United States taxes or otherwise pay Additional Amounts (in the opinion of independent legal counsel selected by the Funding Agreement Provider), in each case pursuant to any change in or amendment to any United States tax laws (or any regulations or rulings thereunder) or any change in position of the Internal Revenue Service regarding the application or interpretation thereof (including, but not limited to, the Funding Agreement Provider’s or Global Funding’s receipt of a written adjustment from the Internal Revenue Service in connection with an audit) (a “Tax Event”), and (ii) the Funding Agreement Provider, pursuant to the terms of the relevant Funding Agreement, has delivered to the Owner notice that the Funding Agreement Provider intends to terminate the relevant Funding Agreement pursuant to the terms of such Funding Agreement, then Global Funding will redeem the Funding Note on the Redemption Date at the Redemption Price together with any unpaid interest accrued thereon, any Additional Amounts and other amounts payable with respect thereto, as of the Redemption Date.
Unless otherwise specified in the Funding Note Indenture or on the face hereof, Global Funding shall give a notice of such redemption to the Holder of the Funding Note to be redeemed not more than 75 days nor less than 30 days prior to the Redemption Date; provided, that no such notice of redemption may be given earlier than 90 days prior to the earliest day on which Global Funding would become obligated to pay the applicable Additional Amounts were a payment in respect of the Funding Note then due. Failure to give such notice to the Holder of any portion of the Funding Note designated for redemption in whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other portion of the Funding Note.
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SECTION 8 Modifications and Amendments. The Funding Note Indenture contains provisions permitting Global Funding and the Funding Note Indenture Trustee (1) without the consent of any Holder, to execute Supplemental Funding Note Indentures for limited purposes and take other actions set forth in the Funding Note Indenture, and (2) with the consent of the Holder or Holders of not less than 662/3% of the outstanding principal amount of the Funding Note, evidenced as provided in the Funding Note Indenture, to execute Supplemental Funding Note Indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Funding Note Indenture or any Supplemental Funding Note Indenture or modifying in any manner the rights of the Holder or Holders of the Funding Not e subject to specified limitations.
SECTION 9 Obligations Unconditional. No reference herein to the Funding Note Indenture and no provision of the Funding Note or of the Funding Note Indenture shall alter or impair the obligation of Global Funding, which is absolute and unconditional, to pay the principal of, interest on, or any other amount due and owing with respect to, the Funding Note at the places, at the respective times, at the rate, and in the coin or currency, herein prescribed.
SECTION 10 Collateral. Pursuant to the Funding Note Indenture, Global Funding will grant a security interest in, pledge and collaterally assign the relevant Funding Agreement(s) issued by the Funding Agreement Provider in connection with the issuance of the Funding Note (each, a “Funding Agreement”) to the Funding Note Indenture Trustee. The Funding Note will be secured by the Security Interest in the Collateral in favor of the Funding Note Indenture Trustee for the benefit of each Holder of the Funding Note and each other person for whose benefit the Funding Note Indenture Trustee is or will be holding the Collateral (the “Secured Parties”).
SECTION 11 Security; Limited Recourse. The Funding Note is solely the obligation of Global Funding, and will not be guaranteed by any person, including but not limited to the Funding Agreement Provider, any Allstate Life Global Funding Trust, any Agent, the Global Funding Trust Beneficial Owner, the Delaware Trustee, the Funding Note Indenture Trustee or any of their affiliates. Global Funding’s obligations under the Funding Note will be secured by all of Global Funding’s rights and title in one or more Funding Agreement(s) issued by the Funding Agreement Provider and other rights and assets included in the applicable Collateral. The Holder or Holders of the Funding Note have no direct contractual rights against the Funding Agreement Provider under the Funding Agreement(s). Under the terms of each Funding Agreement, recourse rights to the Funding Agreement Provider will belong to Global Funding, its successors and permitted assignees. Global Funding has pledged and collaterally assigned each Funding Agreement to the Funding Note Indenture Trustee and has granted the Security Interest in the Collateral to the Funding Note Indenture Trustee for the benefit of the Secured Parties. Recourse to the Funding Agreement Provider under each Funding Agreement will be enforceable only by the Funding Note Indenture Trustee on behalf of the Secured Parties.
SECTION 12 Events of Default. If one or more Events of Default, as defined in the Funding Note Indenture, shall have occurred and be continuing with respect to the Funding Note, then, and in every such event, unless the principal of the Funding Note shall have already become due and payable, the entire principal and premium (if any) of the Funding Note, any interest accrued thereon, and any Additional Amounts due and owing and any other amounts payable with respect thereto, may be declared to be, and upon any such declaration the same shall become immediately, due and payable; provided that, with respect to certain Events of Default, without any notice to Global Funding or any other act by the Funding Note Indenture Trustee or any Holder of the Funding Note, the entire principal and premium (if any) of the Funding Note, any interest accrued thereon, and any Additional Amounts due and owing, and any other amounts payable with respect thereto, shall become immediately due and payable without presentment, demand, protest or other notice of any kind. If the Funding Note is a Discount Note, the amount of principal of the Funding Note that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3 hereof.
SECTION 13 Withholding; Additional Amounts. All amounts due in respect of the Funding Note will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority in the United States having the power to tax payments on the Funding Note unless the withholding or deduction is required by law. Unless otherwise specified on the face hereof, Global Funding will not pay any Additional Amounts to the Holders of the Funding Note in the event that any withholding or deduction is so required by law, regulation or official interpretation thereof, and the imposition of a requirement to make any such withholding or deduction will not give rise to any independent right or obligation to redeem or repay the Funding Note and shall not constitute an Event of Default.
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SECTION 14 Listing. Unless otherwise specified on the face hereof, the Funding Note will not be listed on any |
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securities exchange.
SECTION 15 No Recourse. Notwithstanding anything to the contrary contained in the Funding Note Indenture, or the Funding Note Certificate or Supplemental Funding Note Indenture, none of the Funding Agreement Provider, its officers, directors, affiliates, employees or agents, or any of the Delaware Trustee, the Funding Note Indenture Trustee or the Global Funding Trust Beneficial Owner, or any of their officers, directors, affiliates, employees or agents (the “Non-recourse Parties”) will be personally liable for the payment of any principal, interest or any other sums at any time owing under the terms of the Funding Note. If any Event of Default shall occur with respect to the Funding Note, the right of the Holders of the Funding Note and the Funding Note Indenture Trustee on behalf of such Holders in connection with a claim on the Funding Note shall be limited solely to a proceeding against the Collateral. Neither the Holders nor the Funding Note Indenture Trustee on behalf of the Holders will have the right to proceed against the Non-recourse Parties to enforce the Funding Note (except that to the extent they exercise their rights, if any, to seize the relevant Funding Agreement, they may enforce the relevant Funding Agreement against the Funding Agreement Provider) or for any deficiency judgment remaining after foreclosure of any property included in the Collateral.
SECTION 16 Governing Law. Pursuant to Section 5-1401 of the General Obligations Law of the State of New York, the Funding Note shall be governed by, and construed in accordance with, the laws of the State of New York.
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ANNEX A
OPTION TO ELECT REPAYMENT
The undersigned Holder of the Funding Note hereby irrevocably elects to have Global Funding repay the principal amount of the Funding Note or portion hereof at the optional repayment price in accordance with the terms of the Funding Note.
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Date: __________________________ |
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Signature | |||
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Sign exactly as name appears on the front of this Note Certificate [SIGNATURE GUARANTEED - required only if Funding Note is to be issued and delivered to other than the registered Holder] | |||
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$ ________________________ |
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Name: _____________________ | |||
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Address:_____________________ | ||||
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(Please print name and address including zip code) | |||
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Social Security or Other Taxpayer ID Number
SCHEDULE IAMORTIZATION TABLE
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A-1
EXHIBIT 10.10
FORM OF AMENDED AND RESTATED NAME LICENSING AGREEMENT
between
ALLSTATE INSURANCE COMPANY
and
ALLSTATE LIFE GLOBAL FUNDING
Dated as of —, 2007
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
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SECTION 1.1 |
Definitions |
1 |
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SECTION 1.2 |
Other Definitional Provisions |
2 |
ARTICLE 2
CONTINUATION OF GRANT OF LICENSE; INDEPENDENT CONTRACTORS
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SECTION 2.1 |
Continuation of Grant of License |
3 |
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SECTION 2.2 |
Independent Contractors |
3 |
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SECTION 2.3 |
Continuation of the Base Name Licensing Agreement |
3 |
ARTICLE 3
AGREEMENTS AND ACKNOWLEDGEMENTS OF LICENSEE
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SECTION 3.1 |
Agreements and Acknowledgements of Licensee |
3 |
ARTICLE 4
INFRINGEMENT PROCEEDINGS
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SECTION 4.1 |
Notification of Unauthorized Use |
5 |
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SECTION 4.2 |
Payments for Damages |
5 |
ARTICLE 5
TERM AND TERMINATION
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SECTION 5.1 |
Term |
6 |
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SECTION 5.2 |
Automatic Termination |
6 |
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SECTION 5.3 |
Immediate Termination |
6 |
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SECTION 5.4 |
Termination on Notice |
6 |
ARTICLE 6
EFFECT OF TERMINATION
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SECTION 6.1 |
Discontinuation of Use of Licensed Marks |
6 |
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SECTION 6.2 |
Licensee Cooperation |
7 |
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SECTION 6.3 |
Rights in Licensed Marks |
7 |
i
ARTICLE 7
MISCELLANEOUS
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SECTION 7.1 |
Enforcement |
7 |
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SECTION 7.2 |
Severability |
7 |
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SECTION 7.3 |
Entire Agreement |
7 |
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SECTION 7.4 |
Amendments |
7 |
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SECTION 7.5 |
Governing Law |
7 |
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SECTION 7.6 |
Consent to Jurisdiction |
8 |
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SECTION 7.7 |
Waiver of Jury Trial |
8 |
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SECTION 7.8 |
No Waiver |
8 |
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SECTION 7.9 |
Remedies Cumulative |
8 |
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SECTION 7.10 |
Notices |
8 |
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SECTION 7.11 |
Counterparts |
9 |
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SECTION 7.12 |
Limitation of Delaware Trustee Liability |
9 |
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Appendix A |
Licensed Marks |
ii
This Amended And Restated Name Licensing Agreement dated as of —, 2007 (this “Amended and Restated Name Licensing Agreement”), between Allstate Insurance Company (“Licensor”), an Illinois stock insurance company, and Allstate Life Global Funding (“Licensee”), a statutory trust organized under the laws of the State of Delaware,
W I T N E S S E T H:
WHEREAS, Licensor and Licensee entered into that certain Name Licensing Agreement, dated as of April 27, 2004, as amended and restated by the Amended and Restated Name Licensing Agreement, dated as of August 16, 2005, and the Amended and Restated Name Licensing Agreement, dated as of March 15, 2006 (as so amended and restated, the “Base Name Licensing Agreement”), and the parties hereto desire to amend and restate the Base Name Licensing Agreement in its entirety;
WHEREAS, Licensor is the owner of the Licensed Marks (as defined below);
WHEREAS, Licensee desires to use the Licensed Marks and use Allstate as part of its company name; and
WHEREAS, Licensor and Licensee wish to formalize the agreement between them regarding Licensee’s use of the Licensed Marks;
NOW, THEREFORE, in consideration of the mutual promises set forth in this Amended and Restated Name Licensing Agreement and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the following meanings:
“Amended and Restated Name Licensing Agreement” means this instrument, as originally executed, and as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Amended and Restated Trust Agreement” means that certain Amended and Restated Trust Agreement of Licensee, dated as of March 15, 2006, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Base Name Licensing Agreement” has the meaning ascribed in the first recital.
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“Delaware Trustee” has the meaning ascribed in Section 7.12.
“Licensed Marks” shall include all marks listed on Appendix A attached hereto as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Licensed Services” means the activities necessary to accomplish all purposes of Licensee as set forth in the Amended and Restated Trust Agreement.
“Licensee” means Allstate Life Global Funding, a statutory trust organized under the laws of the State of Delaware.
“Licensor” means Allstate Insurance Company, an Illinois stock insurance company, and its successors.
“Person” means any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, joint venture, association, company, trust (including any beneficiary thereof), bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and governments and agencies and political subdivisions thereof.
“Territory” shall mean worldwide.
SECTION 1.2 Other Definitional Provisions. For all purposes of this Amended and Restated Name Licensing Agreement except as otherwise expressly provided or unless the context otherwise requires:
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(a) |
the terms defined in this Article shall have the meanings ascribed to them in this Article and shall include the plural as well as the singular; |
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(b) |
the words “include”, “includes” and “including” shall be construed to be followed by the words “without limitation”; |
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(c) |
Article and Section headings are for the convenience of the reader and shall not be considered in interpreting this Amended and Restated Name Licensing Agreement or the intent of the parties to this Amended and Restated Name Licensing Agreement; |
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(d) |
the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Amended and Restated Name Licensing Agreement as a whole and not to any particular Article, Section, Appendix or other subdivision; and |
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(e) |
references herein to Articles, Sections and Appendices shall, unless otherwise specified, refer respectively to Articles, Sections and Appendices hereof. |
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ARTICLE 2
CONTINUATION OF GRANT OF LICENSE; INDEPENDENT CONTRACTORS
SECTION 2.1 Continuation of Grant of License. Licensor has previously granted to Licensee, and Licensor hereby agrees to continue to grant to Licensee for the term of this Amended and Restated Name Licensing Agreement, a nonexclusive, nontransferable right and license to use the Licensed Marks for the Licensed Services within the Territory. Licensor is not representing that it has rights with respect to Licensed Marks or the Licensed Marks in every jurisdiction within the Territory.
SECTION 2.2 Independent Contractors. Licensor and Licensee are independent contractors and are not, and shall not, represent themselves as principal and agent, partners or joint venturers.
SECTION 2.3 Continuation of the Base Name Licensing Agreement. The parties hereto agree that, upon the execution of this Amended and Restated Name Licensing Agreement:
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(a) |
the Base Name Licensing Agreement shall continue in full force and effect as amended and restated by this Amended and Restated Name Licensing Agreement; and |
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(b) |
the rights and obligations of the parties hereto shall be as provided in this Amended and Restated Name Licensing Agreement. |
ARTICLE 3
AGREEMENTS AND ACKNOWLEDGEMENTS OF LICENSEE
SECTION 3.1 Agreements and Acknowledgements of Licensee. Licensee acknowledges and agrees that:
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(a) |
Licensor is the sole owner of the Licensed Marks; |
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(b) |
Licensee shall do nothing inconsistent with the ownership of the Licensed Marks by Licensor; |
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(c) |
all use of the Licensed Marks by Licensee shall inure only to the benefit of and be on behalf of Licensor; |
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(d) |
Licensee shall assist Licensor in executing any additional documents that may be necessary or desirable to effect the protection of Licensor’s interests in Licensed Marks, including, but not limited to, the execution of any and all documents required by governmental agencies in order to register or maintain trademark and service mark registrations; in addition, Licensee shall not oppose Licensor’s registration of the |
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Licensed Marks nor take action that jeopardizes Licensor’s rights in Licensed Marks;
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(e) |
nothing in this Amended and Restated Name Licensing Agreement shall give Licensee any right, title or interest in Licensed Marks other than the license granted in this Amended and Restated Name Licensing Agreement; |
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(f) |
Licensee shall not attack or challenge in any way Licensor’s rights in and to Licensed Marks or the validity or enforceability of this Amended and Restated Name Licensing Agreement; |
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(g) |
Licensee shall not assign any of the rights granted under this Amended and Restated Name Licensing Agreement without the prior express written consent of Licensor; |
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(h) |
Licensee shall not grant to any Person a right and license to use the Licensed Marks without the prior express written consent of Licensor; |
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(i) |
Licensee shall not use any Licensor’s Mark not covered by this Amended and Restated Name Licensing Agreement which is the property or is claimed as the property of Licensor or Licensor’s subsidiaries or affiliates, except with the prior express written consent of Licensor; |
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(j) |
Licensee shall comply with all applicable law, rules and regulations pertaining to its business; |
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(k) |
Licensor has the sole and exclusive right to control the appearance of the Licensed Marks, including the quality of the mark in the Licensed Marks; |
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(l) |
the nature and quality of the business conducted by Licensee under the Licensed Marks, and all related advertising, promotional and other uses of Licensed Marks by Licensee shall conform to standards set by and under the control of Licensor and communicated to Licensee from time to time; |
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(m) |
except as otherwise agreed in writing by Licensor from time to time, Licensee shall submit to Casey Mangan, or successor in the Corporate Law Division of Licensor for Licensor’s prior approval representative samples of all proposed materials bearing the Licensed Marks, to the extent that such materials are not contained in the Registration Statement on Form S-3 (File No. 333-112249), as amended and the exhibits thereto, the Registration Statement on Form S-3 (File No. 333-125937), as amended and the exhibits thereto, the Registration Statement on Form S- |
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3 (File No. 333-129157), as amended and the exhibits thereto or the Registration Statement on Form S-3 (File No. 333-143541), as amended and the exhibits thereto;
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(n) |
Licensor shall have the right to inspect, upon reasonable notice, the business facilities of Licensee and to request submission of written materials at any time during the term of this Amended and Restated Name Licensing Agreement so that Licensor may satisfy itself that quality standards are being appropriately complied with and will immediately modify or discontinue any use of Licensed Marks that Licensor deems not to be in compliance with its quality standards; |
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(o) |
the standards of conduct of Licensee’s business shall be equivalent to the high standards of quality and ethics characteristic of the businesses conducted by Licensor; |
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(p) |
the value and goodwill of the Licensed Marks accrues solely to Licensor; and |
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(q) |
Licensee will not act or use Licensed Marks in any manner which may, in Licensor’s judgment, be in bad taste, be inconsistent with Licensor’s public image or which may in any way disparage Licensor or its reputation including, but not limited to, types and placement of advertising, or take any action which will harm or jeopardize the Licensed Marks or Licensor’s ownership thereof. |
ARTICLE 4
INFRINGEMENT PROCEEDINGS
SECTION 4.1 Notification of Unauthorized Use. Licensee agrees to promptly notify Licensor of any unauthorized use of any of Licensed Marks as such unauthorized use comes to Licensee’s attention. Licensor shall have the sole right and discretion to take any action relating to Licensed Marks; provided, that Licensee agrees to cooperate fully, should Licensor decide to take any such action.
SECTION 4.2 Payments for Damages. If infringement proceedings result in an award of damages or the payment of any sums to Licensor, any such damages or payments shall belong solely to Licensor.
ARTICLE 5
TERM AND TERMINATION
SECTION 5.1 Term. This Amended and Restated Name Licensing Agreement shall continue in force and effect for so long as Licensee continues to exist
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in accordance with the terms of the Amended and Restated Trust Agreement, unless it is sooner terminated as provided for in this Amended and Restated Name Licensing Agreement.
SECTION 5.2 Automatic Termination. This Amended and Restated Name Licensing Agreement shall automatically terminate upon the happening of any of the following events:
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(a) |
Licensee is ordered or adjudged bankrupt, is placed under the supervision of a receiver, or enters into any scheme or composition with creditors to make an assignment for the benefit of creditors; |
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(b) |
any assets of Licensee are seized or attached in conjunction with any action against Licensee by a third party; or |
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(c) |
any of the assets of Licensee are seized or appropriated by any governmental authority, whether or not compensation for such action is offered to Licensee. |
SECTION 5.3 Immediate Termination. Licensor shall have the right, but not the obligation, to immediately terminate this Amended and Restated Name Licensing Agreement and all rights granted under this Amended and Restated Name Licensing Agreement in the event that Licensee (a) ceases to conduct business as a statutory trust, (b) breaches any of its representations, agreements, covenants and undertakings in this Amended and Restated Name Licensing Agreement, (c) fails to comply with laws, rules and regulations applicable to it or the conduct of its business to the complete satisfaction of Licensor, (d) acts in a manner that impugns Licensor’s reputation or (e) uses the Licensed Marks in a manner that is inconsistent with or beyond the scope of the license granted herein.
SECTION 5.4 Termination on Notice. Licensor may terminate this Amended and Restated Name Licensing Agreement without cause upon the provision of ten days’ prior written notice to Licensee.
ARTICLE 6
EFFECT OF TERMINATION
SECTION 6.1 Discontinuation of Use of Licensed Marks. Upon termination of this Amended and Restated Name Licensing Agreement, Licensee agrees to immediately change Licensee’s name as to not include any Licensed Marks, and to discontinue and not to use in the future any of the Licensed Marks, any trade name incorporating any of the Licensed Marks, or any terms confusingly similar to any of Licensed Marks.
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SECTION 6.2 Licensee Cooperation. Upon termination of this Amended and Restated Name Licensing Agreement, Licensee agrees to cooperate fully with Licensor to amend or cancel any governmental recordations or approvals pertaining to any trade names, trademarks or service marks which consist of or include any of Licensed Marks.
SECTION 6.3 Rights in Licensed Marks. Upon termination of this Amended and Restated Name Licensing Agreement, any and all rights in the Licensed Marks heretofor granted to Licensee and the goodwill connected therewith shall remain the property of Licensor.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 Enforcement. The parties agree that any breaches of this Amended and Restated Name Licensing Agreement shall cause irreparable injury to the nonbreaching party and that an injunction shall be an appropriate remedy.
SECTION 7.2 Severability. In the event any provision of, or obligation under, this Amended and Restated Name Licensing Agreement shall be invalid, illegal or unenforceable, in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby to the fullest extent permitted under applicable law.
SECTION 7.3 Entire Agreement. This Amended and Restated Name Licensing Agreement constitutes the entire agreement between the parties hereto relating to the subject matter of this Amended and Restated Name Licensing Agreement, and supersedes all previous agreements between the parties, whether written or oral.
SECTION 7.4 Amendments. Any amendments, supplements, modifications, restatements or replacements of this Amended and Restated Name Licensing Agreement, or waivers or consents to this Amended and Restated Name Licensing Agreement, shall be in writing signed by the parties.
SECTION 7.5 Governing Law. This Amended and Restated Name Licensing Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to its choice of law principles.
SECTION 7.6 Consent to Jurisdiction. Each party to this Amended and Restated Name Licensing Agreement submits to the nonexclusive jurisdiction of the United States Federal court located in Cook County, Illinois, for purposes of any legal proceeding arising out of or relating to this Amended and Restated Name Licensing Agreement or the transactions contemplated by this Amended and Restated Name
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Licensing Agreement. Each party to this Amended and Restated Name Licensing Agreement irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Each party to this Amended and Restated Name Licensing Agreement consents to process being served in any suit, action or proceeding with respect to this Amended and Restated Name Licensing Agreement, or any document delivered pursuant to this Amended and Restated Name Licensing Agreement by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to its respective address specified at the time for notices under this Amended and Restated Name Licensing Agreement or to any other address of which it shall have given written notice to the other party. The foregoing shall not limit the ability of any party to this Amended and Restated Name Licensing Agreement to bring suit in the courts of any other jurisdiction.
SECTION 7.7 Waiver of Jury Trial. Each of the parties to this Amended and Restated Name Licensing Agreement irrevocably waives any and all right to a trial by jury with respect to any legal proceeding arising out of or relating to this Amended and Restated Name Licensing Agreement or any claims or transactions in connection with this Amended and Restated Name Licensing Agreement. Each of the parties to this Amended and Restated Name Licensing Agreement hereby acknowledges that such waiver is made with full understanding and knowledge of the nature of the rights and benefits waived hereby.
SECTION 7.8 No Waiver. No failure on the part of Licensor to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Amended and Restated Name Licensing Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof or the exercise of any other right, power or privilege operate as such a waiver.
SECTION 7.9 Remedies Cumulative. No right, power or remedy of Licensor under this Amended and Restated Name Licensing Agreement shall be exclusive of any other right, power or remedy, but shall be cumulative and in addition to any other right, power or remedy thereunder or existing by law or in equity.
SECTION 7.10 Notices. All notices, demands, or other communications required or permitted to be given under this Amended and Restated Name Licensing Agreement shall be given in writing by delivering the same against receipt thereof by facsimile transmission (confirmed by registered or certified mail, postage prepaid, return receipt requested), or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of a confirmation, if sent by facsimile):
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If to Licensor: |
Allstate Insurance Company |
3100 Sanders Road
Northbrook, Illinois 60062
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Attention: |
Michael J. Velotta, Vice President, Deputy General |
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Counsel and Assistant Secretary |
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Facsimile: |
(847) 326-6742 |
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If to Licensee: |
Allstate Life Global Funding |
c/o AMACAR Pacific Corp.
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Attention: President
Facsimile: (704) 365-1362
or at such other address as shall be designated by any party in a written notice to the other party.
SECTION 7.11 Counterparts. This Amended and Restated Name Licensing Agreement and any amendments, supplements, modifications, restatements or replacements of this Amended and Restated Name Licensing Agreement, or waivers or consents to this Amended and Restated Name Licensing Agreement, may be executed in any number of counterparts, and by different parties to this Amended and Restated Name Licensing Agreement in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which counterparts, when taken together shall constitute one and the same instrument. This Amended and Restated Name Licensing Agreement shall become effective upon the execution of a counterpart by each of the parties.
SECTION 7.12 Limitation of Delaware Trustee Liability. Notwithstanding any provision of this Amended and Restated Name Licensing Agreement to the contrary, it is expressly understood and agreed by the parties that (a) this Amended and Restated Name Licensing Agreement is executed and delivered by Wilmington Trust Company (The “Delaware Trustee”) not individually or personally, but solely as trustee, as applicable, in the exercise of the powers and authority conferred and vested in it, pursuant to the Amended and Restated Trust Agreement of the Licensee, (b) each of the representations, undertakings and agreements in this Amended and Restated Name Licensing Agreement made on the part of the Licensee is made and intended not as personal representations, undertakings and agreements by the Delaware Trustee but is made and intended for the purpose of binding only the Licensee, (c) nothing contained in this Amended and Restated Name Licensing Agreement shall be construed as creating any liability on the Delaware Trustee, individually or personally, to perform any covenant either expressed or implied contained in this Amended and Restated Name Licensing Agreement, all such liability, if any, being expressly waived by the parties to this Amended and Restated Name Licensing Agreement and by any person claiming by, through or under the parties to this Amended and Restated Name
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Licensing Agreement, and (d) under no circumstances shall the Delaware Trustee be personally liable for the payment of any indebtedness or expenses of the Licensee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Licensee under this Amended and Restated Name Licensing Agreement of any other related documents.
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IN WITNESS WHEREOF, the parties have caused this Amended and Restated Name Licensing Agreement to be executed by duly authorized representatives on the date first written above.
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ALLSTATE INSURANCE COMPANY | |
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By: |
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Name: |
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ALLSTATE LIFE GLOBAL FUNDING
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By:
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WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Delaware Trustee
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By: |
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Name: |
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APPENDIX A
LICENSED MARKS
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• |
Allstate |
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Allstate Life |
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[ALLSTATE® LOGO] |
A-1
EXHIBIT 10.12
STANDARD NAME LICENSING AGREEMENT TERMS
with respect to
ALLSTATE LIFE GLOBAL FUNDING TRUSTS
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
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SECTION 1.1 |
Definitions |
1 |
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SECTION 1.2 |
Other Definitional Provisions |
3 |
ARTICLE 2
GRANT OF LICENSE; INDEPENDENT CONTRACTORS
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SECTION 2.1 |
Grant of License |
4 |
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SECTION 2.2 |
Independent Contractors |
4 |
ARTICLE 3
AGREEMENTS AND ACKNOWLEDGEMENTS OF LICENSEE
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SECTION 3.1 |
Agreements and Acknowledgements of Licensee |
4 |
ARTICLE 4
INFRINGEMENT PROCEEDINGS
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SECTION 4.1 |
Notification of Unauthorized Use |
6 |
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SECTION 4.2 |
Payments for Damages |
6 |
ARTICLE 5
TERM AND TERMINATION
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SECTION 5.1 |
Term |
6 |
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SECTION 5.2 |
Automatic Termination |
6 |
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SECTION 5.3 |
Immediate Termination |
7 |
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SECTION 5.4 |
Termination on Notice |
7 |
ARTICLE 6
EFFECT OF TERMINATION
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SECTION 6.1 |
Change of Licensee Marks |
7 |
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SECTION 6.2 |
Licensee Cooperation |
7 |
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SECTION 6.3 |
Rights in Licensed Marks |
7 |
ARTICLE 7
MISCELLANEOUS
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SECTION 7.1 |
Enforcement |
7 |
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SECTION 7.2 |
Severability |
7 |
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SECTION 7.3 |
Entire Agreement |
8 |
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SECTION 7.4 |
Amendment of Name Licensing Agreement |
8 |
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SECTION 7.5 |
Governing Law |
8 |
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SECTION 7.6 |
Consent to Jurisdiction |
8 |
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SECTION 7.7 |
Waiver of Jury Trial |
8 |
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SECTION 7.8 |
No Waiver |
8 |
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SECTION 7.9 |
Remedies Cumulative |
9 |
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SECTION 7.10 |
Notices |
9 |
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SECTION 7.11 |
Counterparts |
9 |
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APPENDIX A |
LICENSED MARKS |
A-1 |
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ii |
This document constitutes the Standard Name Licensing Agreement Terms which will be incorporated by reference in the Name Licensing Agreement (as defined below) between Allstate Insurance Company (the “Licensor”) and the Trust (as defined below) (the “Licensee”).
These Standard Name Licensing Agreement Terms shall be of no force and effect unless and until incorporated by reference in, and then only to the extent not modified by, the Name Licensing Agreement.
The following terms and provisions shall govern the use of the Licensor’s Licensed Marks (as defined below) by the Licensee, subject to contrary terms and provisions expressly adopted in the Name Licensing Agreement, which contrary terms shall be controlling.
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the following meanings:
“Administrative Services Agreement” means that certain Administrative Services Agreement included in Part B of the Series Instrument, by and between the Trust and the Administrator, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Administrator” means AMACAR Pacific Corp., a Delaware corporation, in its capacity as the sole administrator of the Trust, or another entity specified in the Indenture as the Administrator, and, in each case, its permitted successors and assigns.
“Agents” has the meaning ascribed in the Distribution Agreement.
“Coordination Agreement” means that certain Coordination Agreement included in Part F of the Series Instrument, among the Trust and the other parties specified therein, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Delaware Trustee” means Wilmington Trust Company, a Delaware banking corporation, or another entity specified in the Indenture as the Delaware Trustee, in each case not in its individual capacity but solely as trustee, and its successors.
“Distribution Agreement” means that certain Distribution Agreement dated as of -, 2007, by and among Allstate Life Global Funding and the Agents named therein, as the same may be amended, restated, modified or supplemented from time to time.
“Funding Note Indenture” means that certain Funding Note Indenture included in Part H of the Series Instrument, among Global Funding and the other parties
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1 |
specified therein, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Indenture” means that certain Indenture included in Part G of the Series Instrument, among the Trust and the other parties specified therein, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Licensed Marks” shall include all marks listed on Appendix A attached hereto as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Licensed Services” means the activities necessary to accomplish all purposes of the Trust as set forth in the Trust Agreement.
“Licensee” means the Trust.
“Licensor” means Allstate Insurance Company, an Illinois stock insurance company, and its successors.
“Name Licensing Agreement” means that certain Name Licensing Agreement included in Part D of the Series Instrument, between Licensor and Licensee, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Note” means each medium term note issued by the Trust under the Indenture, each in an authorized denomination and represented, individually or collectively, by a Note Certificate authenticated by the Indenture Trustee pursuant to the terms of the Indenture.
“Note Certificate” means a security certificate representing one or more Notes.
“Person” means any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, joint venture, association, company, trust (including any beneficiary thereof), bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and governments and agencies and political subdivisions thereof.
“Series Instrument” means the series instrument of the Trust, pursuant to which the Administrative Services Agreement, the Coordination Agreement, the Funding Note Indenture, the Indenture, the Name Licensing Agreement, the Support Agreement, the Terms Agreement and the Trust Agreement are entered into, and certain other documents are executed, in connection with the issuance of the Notes by the Trust.
“Support Agreement” means that certain Support and Expenses Agreement included in Part C of the Series Instrument, by and between Allstate Life Insurance
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Company and the Trust, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Terms Agreement” means that certain Terms Agreement included in Part E of the Series Instrument, by and among Allstate Life Global Funding, the Trust and each Agent named therein, which will incorporate by reference the terms of the Distribution Agreement.
“Territory” shall mean worldwide.
“Trust” means the Allstate Life Global Funding Trust specified in the Series Instrument, together with its permitted successors and assigns.
“Trust Agreement” means that certain Trust Agreement included in Part A of the Series Instrument, among the Trust Beneficial Owner, the Administrator and the Delaware Trustee, as the same may be amended, supplemented, modified, restated or replaced from time to time.
“Trust Beneficial Owner” means Allstate Life Global Funding, a Delaware statutory trust, in its capacity as trust beneficial owner.
SECTION 1.2 Other Definitional Provisions. For all purposes of the Name Licensing Agreement except as otherwise expressly provided or unless the context otherwise requires:
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(a) |
the terms defined in this Article shall have the meanings ascribed to them in this Article and shall include the plural as well as the singular; |
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(b) |
the words “include”, “includes” and “including” shall be construed to be followed by the words “without limitation”; |
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(c) |
Article and Section headings are for the convenience of the reader and shall not be considered in interpreting the Name Licensing Agreement or the intent of the parties to the Name Licensing Agreement; |
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(d) |
the words “herein”, “hereof” and “hereunder” and other words of similar import refer to the Name Licensing Agreement as a whole and not to any particular Article, Section, Appendix or other subdivision; and |
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(e) |
references herein to Articles, Sections and Appendices shall, unless otherwise specified, refer respectively to Articles, Sections and Appendices |
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3 |
ARTICLE 2
GRANT OF LICENSE; INDEPENDENT CONTRACTORS
SECTION 2.1 Grant of License. Licensor hereby grants to Licensee for the term of the Name Licensing Agreement a nonexclusive, nontransferable right and license to use the Licensed Marks for the Licensed Services within the Territory. Licensor is not representing that it has rights with respect to Licensed Marks or the Licensed Marks in every jurisdiction within the Territory.
SECTION 2.2 Independent Contractors. Licensor and Licensee are independent contractors and are not, and shall not, represent themselves as principal and agent, partners or joint venturers.
ARTICLE 3
AGREEMENTS AND ACKNOWLEDGEMENTS OF LICENSEE
SECTION 3.1 Agreements and Acknowledgements of Licensee. Licensee acknowledges and agrees that:
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(a) |
Licensor is the sole owner of the Licensed Marks; |
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(b) |
Licensee shall do nothing inconsistent with the ownership of the Licensed Marks by Licensor; |
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(c) |
all use of the Licensed Marks by Licensee shall inure only to the benefit of and be on behalf of Licensor; |
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(d) |
Licensee shall assist Licensor in executing any additional documents that may be necessary or desirable to effect the protection of Licensor’s interests in Licensed Marks, including, but not limited to, the execution of any and all documents required by governmental agencies in order to register or maintain trademark and service mark registrations; in addition, Licensee shall not oppose Licensor’s registration of the Licensed Marks nor take action that jeopardizes Licensor’s rights in Licensed Marks; |
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(e) |
nothing in the Name Licensing Agreement shall give Licensee any right, title or interest in Licensed Marks other than the license granted in the Name Licensing Agreement; |
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(f) |
Licensee shall not attack or challenge in any way Licensor’s rights in and to Licensed Marks or the validity or enforceability of the Name Licensing Agreement; |
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4 |
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(g) |
Licensee shall not assign any of the rights granted under the Name Licensing Agreement without the prior express written consent of Licensor; |
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(h) |
Licensee shall not grant to any Person a right and license to use the Licensed Marks without the prior express written consent of Licensor; |
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(i) |
Licensee shall not use any Licensor’s Mark not covered by the Name Licensing Agreement which is the property or is claimed as the property of Licensor or Licensor’s subsidiaries or affiliates, except with the prior express written consent of Licensor; |
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(j) |
Licensee shall comply with all applicable law, rules and regulations pertaining to its business; |
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(k) |
Licensor has the sole and exclusive right to control the appearance of the Licensed Marks, including the quality of the mark in the Licensed Marks; |
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(l) |
the nature and quality of the business conducted by Licensee under the Licensed Marks, and all related advertising, promotional and other uses of Licensed Marks by Licensee shall conform to standards set by and under the control of Licensor and communicated to Licensee from time to time; |
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(m) |
except as otherwise agreed in writing by Licensor from time to time, Licensee shall submit to Casey Mangan, or successor in the Corporate Law Division of Licensor for Licensor’s prior approval representative samples of all proposed materials bearing the Licensed Marks, to the extent that such materials are not contained in the Registration Statement on Form S-3 (File No. 333-143541), as amended and exhibits thereto; |
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(n) |
Licensor shall have the right to inspect, upon reasonable notice, the business facilities of Licensee and to request submission of written materials at any time during the term of the Name Licensing Agreement so that Licensor may satisfy itself that quality standards are being appropriately complied with and will immediately modify or discontinue any use of Licensed Marks that Licensor deems not to be in compliance with its quality standards; |
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5 |
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(o) |
the standards of conduct of Licensee’s business shall be equivalent to the high standards of quality and ethics characteristic of the businesses conducted by Licensor; |
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(p) |
the value and goodwill of the Licensed Marks accrues solely to Licensor; and |
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(q) |
Licensee will not act or use Licensed Marks in any manner which may, in Licensor’s judgment, be in bad taste, be inconsistent with Licensor’s public image or which may in any way disparage Licensor or its reputation including, but not limited to, types and placement of advertising, or take any action which will harm or jeopardize the Licensed Marks or Licensor’s ownership thereof. |
ARTICLE 4
INFRINGEMENT PROCEEDINGS
SECTION 4.1 Notification of Unauthorized Use. Licensee agrees to promptly notify Licensor of any unauthorized use of any of Licensed Marks as such unauthorized use comes to Licensee’s attention. Licensor shall have the sole right and discretion to take any action relating to Licensed Marks; provided, that Licensee agrees to cooperate fully, should Licensor decide to take any such action.
SECTION 4.2 Payments for Damages. If infringement proceedings result in an award of damages or the payment of any sums to Licensor, any such damages or payments shall belong solely to Licensor.
ARTICLE 5
TERM AND TERMINATION
SECTION 5.1 Term. The Name Licensing Agreement shall continue in force and effect for so long as Licensee continues to exist in accordance with the terms of the Trust Agreement, unless it is sooner terminated as provided for in the Name Licensing Agreement.
SECTION 5.2 Automatic Termination. The Name Licensing Agreement shall automatically terminate upon the happening of any of the following events:
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(a) |
Licensee is ordered or adjudged bankrupt, is placed under the supervision of a receiver, or enters into any scheme or composition with creditors to make an assignment for the benefit of creditors; |
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(b) |
any assets of Licensee are seized or attached in conjunction with any action against Licensee by a third party; or |
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6 |
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(c) |
any of the assets of Licensee are seized or appropriated by any governmental authority, whether or not compensation for such action is offered to Licensee. |
SECTION 5.3 Immediate Termination. Licensor shall have the right, but not the obligation, to immediately terminate the Name Licensing Agreement and all rights granted under the Name Licensing Agreement in the event that Licensee (a) ceases to conduct business as a statutory trust, (b) breaches any of its representations, agreements, covenants and undertakings in the Name Licensing Agreement, (c) fails to comply with laws, rules and regulations applicable to it or the conduct of its business to the complete satisfaction of Licensor, (d) acts in a manner that impugns Licensor’s reputation or (e) uses the Licensed Marks in a manner that is inconsistent with or beyond the scope of the license granted herein.
SECTION 5.4 Termination on Notice. Licensor may terminate the Name Licensing Agreement without cause upon the provision of ten days’ prior written notice to Licensee.
ARTICLE 6
EFFECT OF TERMINATION
SECTION 6.1 Change of Licensee Marks. Upon termination of the Name Licensing Agreement, Licensee agrees to immediately change Licensee’s name as to not include any Licensed Marks, and to discontinue and not to use in the future any of the Licensed Marks, any trade name incorporating any of the Licensed Marks, or any terms confusingly similar to any of Licensed Marks.
SECTION 6.2 Licensee Cooperation. Upon termination of the Name Licensing Agreement, Licensee agrees to cooperate fully with Licensor to amend or cancel any governmental recordations or approvals pertaining to any tradenames, trademarks or servicemarks which consist of or include any of Licensed Marks.
SECTION 6.3 Rights in Licensed Marks. Upon termination of the Name Licensing Agreement, any and all rights in the Licensed Marks heretofor granted to Licensee and the goodwill connected therewith shall remain the property of Licensor.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 Enforcement. The parties agree that any breaches of the Name Licensing Agreement shall cause irreparable injury to the nonbreaching party and that an injunction shall be an appropriate remedy.
SECTION 7.2 Severability. In the event any provision of, or obligation under, the Name Licensing Agreement shall be invalid, illegal or unenforceable, in any jurisdiction, the validity, legality and enforceability of the remaining provisions or
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7 |
obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby to the fullest extent permitted under applicable law.
SECTION 7.3 Entire Agreement. The Name Licensing Agreement constitutes the entire agreement between the parties hereto relating to the subject matter of the Name Licensing Agreement, and supersedes all previous agreements between the parties, whether written or oral.
SECTION 7.4 Amendment of Name Licensing Agreement. Any amendments, supplements, modifications, restatements or replacements of the Name Licensing Agreement, or waivers or consents to the Name Licensing Agreement, shall be in writing signed by the parties.
SECTION 7.5 Governing Law. The Name Licensing Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to its choice of law principles.
SECTION 7.6 Consent to Jurisdiction. Each party to the Name Licensing Agreement submits to the nonexclusive jurisdiction of the United States Federal court located in Cook County, Illinois, for purposes of any legal proceeding arising out of or relating to the Name Licensing Agreement or the transactions contemplated by the Name Licensing Agreement. Each party to the Name Licensing Agreement irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Each party to the Name Licensing Agreement consents to process being served in any suit, action or proceeding with respect to the Name Licensing Agreement, or any document delivered pursuant to the Name Licensing Agreement by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to its respective address specified at the time for notices under the Name Licensing Agreement or to any other address of which it shall have given written notice to the other party. The foregoing shall not limit the ability of any party to the Name Licensing Agreement to bring suit in the courts of any other jurisdiction.
SECTION 7.7 Waiver of Jury Trial. Each of the parties to the Name Licensing Agreement irrevocably waives any and all right to a trial by jury with respect to any legal proceeding arising out of or relating to the Name Licensing Agreement or any claims or transactions in connection with the Name Licensing Agreement. Each of the parties to the Name Licensing Agreement hereby acknowledges that such waiver is made with full understanding and knowledge of the nature of the rights and benefits waived hereby.
SECTION 7.8 No Waiver. No failure on the part of Licensor to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under the Name Licensing Agreement shall operate as a waiver thereof, nor
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8 |
shall any single or partial exercise thereof or the exercise of any other right, power or privilege operate as such a waiver.
SECTION 7.9 Remedies Cumulative. No right, power or remedy of Licensor under the Name Licensing Agreement shall be exclusive of any other right, power or remedy, but shall be cumulative and in addition to any other right, power or remedy thereunder or existing by law or in equity.
SECTION 7.10 Notices. All notices, demands, or other communications required or permitted to be given under the Name Licensing Agreement shall be given in writing by delivering the same against receipt thereof by facsimile transmission (confirmed by registered or certified mail, postage prepaid, return receipt requested), or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of a confirmation, if sent by facsimile):
If to Licensor:
Allstate Insurance Company
3100 Sanders Road
Northbrook, Illinois 60062
Attention: Michael J. Velotta, Vice President, Deputy General
Counsel and Assistant Secretary
Facsimile: (847) 326-6742
If to Licensee:
Allstate Life Global Funding
c/o AMACAR Pacific Corp.
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Attention: President
Facsimile: (704) 365-1362
or at such other address as shall be designated by any party in a written notice to the other party.
SECTION 7.11 Counterparts. The Name Licensing Agreement and any amendments, supplements, modifications, restatements or replacements of the Name Licensing Agreement, or waivers or consents to the Name Licensing Agreement, may be executed in any number of counterparts, and by different parties to the Name Licensing Agreement in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which counterparts, when taken together shall constitute one and the same instrument. The Name Licensing Agreement shall become effective upon the execution of a counterpart by each of the parties.
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9 |
APPENDIX A
LICENSED MARKS
Allstate
Allstate Life
[ALLSTATE® LOGO]
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A-1 |
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Exhibit 12 | |||||||||||||||||||||||||||
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ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||
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COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO | |||||||||||||||||||||||||||
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(in millions) |
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Three months ended March 31, |
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For the Year ended December 31, |
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2007 |
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2006 |
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2006 |
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2005 |
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2004 |
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2003 |
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2002 |
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1. |
Income from operations |
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before income tax and cumulative effect of change in |
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accounting principle, after-tax |
$ |
225 |
$ |
144 |
$ |
624 |
$ |
591 |
$ |
545 |
$ |
453 |
$ |
302 |
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Fixed Charges: |
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2. |
Interest on indebtedness |
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8 |
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2 |
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13 |
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6 |
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2 |
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1 |
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- |
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3. |
Interest factor of annual rental expense |
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- |
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- |
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- |
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- |
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- |
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- |
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2 |
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4. |
Total fixed charges (2+3) |
$ |
8 |
$ |
2 |
$ |
13 |
$ |
6 |
$ |
2 |
$ |
1 |
$ |
2 |
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5. |
Income from operations before income taxes and fixed |
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charges (1+4) |
$ |
233 |
$ |
146 |
$ |
637 |
$ |
597 |
$ |
547 |
$ |
454 |
$ |
304 |
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6. |
Ratio of earnings to fixed charges before dividends on |
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redeemable preferred securities and interest credited to contractholder funds (5/4) |
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29.1 |
X |
73.0 |
X |
49.0 |
X |
99.5 |
X |
273.5 |
X |
454.0 |
X |
152.0 |
X | |||||||||||
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7. |
Dividends on redeemable preferred securities |
- |
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- |
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- |
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- |
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1 |
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2 |
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3 |
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8. |
Total fixed charges and dividends on |
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redeemable preferred securities (4+7) |
$ |
8 |
$ |
2 |
$ |
13 |
$ |
6 |
$ |
3 |
$ |
3 |
$ |
5 |
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9. |
Income from continuing operations before |
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income taxes, fixed charges and dividends on redeemable preferred securities (1+4+7) |
$ |
233 |
$ |
146 |
$ |
637 |
$ |
597 |
$ |
548 |
$ |
456 |
$ |
307 |
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10. |
Ratio of earnings to fixed charges, excluding interest credited to contractholder funds (A) (9/8) |
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29.1 |
X |
73.0 |
X |
49.0 |
X |
99.5 |
X |
182.7 |
X |
152.0 |
X |
61.4 |
X | |||||||||||
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11. |
Interest credited to contractholder funds |
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635 |
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603 |
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2,543 |
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2,340 |
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1,923 |
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1,764 |
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1,691 |
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12. |
Total fixed charges including dividends on |
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redeemable preferred securities and interest |
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credited to contractholder funds (8+11) |
$ |
643 |
$ |
605 |
$ |
2,556 |
$ |
2,346 |
$ |
1,926 |
$ |
1,767 |
$ |
1,696 |
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13. |
Income from continuing operations |
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before income taxes and fixed charges |
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including dividends on redeemable preferred securities and interest credited to contractholder |
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funds (1+12) |
$ |
868 |
$ |
749 |
$ |
3,180 |
$ |
2,937 |
$ |
2,471 |
$ |
2,220 |
$ |
1,998 |
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14. |
Ratio of earnings to fixed charges (13/12) |
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1.3 |
X |
1.2 |
X |
1.2 |
X |
1.3 |
X |
1.3 |
X |
1.3 |
X |
1.2 |
X | |||||||||||
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(A) |
In this presentation, interest credited to contractholder funds is excluded to promote transparency and allows users of this exhibit to quantify the impact of interest credited to contractholder funds on the ratio of earnings to fixed charges. |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-143541 of Allstate Life Global Funding and
Allstate Life Insurance Company on Form S-3 of our report dated March 9, 2007
(which report expresses an unqualified opinion and includes an explanatory
paragraph relating to a change in method of accounting for certain
nontraditional long-duration contracts and for separate accounts in 2004),
relating to the consolidated financial statements and financial statement
schedules of Allstate Life Insurance Company, appearing in the Annual Report on
Form 10-K of Allstate Life Insurance Company for the year ended December 31,
2006, and to the reference to us under the heading "Experts" in the Prospectus,
which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
Chicago, Illinois
June 22, 2007