Exhibit 4.23


 




 





AMENDED AND RESTATED
DECLARATION OF TRUST


 


ST. PAUL TRAVELERS
CAPITAL TRUST [II] [III] [IV] [V]


 


 


DATED AS OF          ,
200  




 





 





















 


CROSS-REFERENCE TABLE*


 


	
  Section of Trust Indenture

  Act of 1939, as amended

  	
   

  	
  Section of

  Declaration

  	
   

  
	
  310(a)

  	
   

  	
  5

  	
  .3

  	
   

  
	
  310(b)

  	
   

  	
  5

  	
  .3(c); 5.3(d)

  	
   

  
	
  311(a)

  	
   

  	
  2

  	
  .2(b)

  	
   

  
	
  311(b)

  	
   

  	
  2

  	
  .2(b)

  	
   

  
	
  312(a)

  	
   

  	
  2

  	
  .2(a)

  	
   

  
	
  312(b)

  	
   

  	
  2

  	
  .2(b)

  	
   

  
	
  313

  	
   

  	
  2

  	
  .3

  	
   

  
	
  314(a)

  	
   

  	
  2.4; 2

  	
  .7(b); 3.6(i)

  	
   

  
	
  314(b)

  	
   

  	
  2

  	
  .5

  	
   

  
	
  315(a)

  	
   

  	
  3

  	
  .6(i); 3.9

  	
   

  
	
  315(b)

  	
   

  	
  2

  	
  .7(a)

  	
   

  
	
  315(c)

  	
   

  	
  3

  	
  .9(a)

  	
   

  
	
  315(d)

  	
   

  	
  3

  	
  .9(b)

  	
   

  
	
  316(a)

  	
   

  	
  2

  	
  .6

  	
   

  
	
  316(c)

  	
   

  	
  3

  	
  .9(e)

  	
   

  
	
  317(a)

  	
   

  	
  3

  	
  .8(e); 3.8(h)

  	
   

  
	
  317(b)

  	
   

  	
  3

  	
  .8(j); 7.3

  	
   

  
	
  318

  	
   

  	
  2

  	
  .1

  	
   

  



 










*  This
Cross-Reference Table does not constitute part of this Declaration and shall
not affect the interpretation of any of its terms or provisions.


 


2





















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  
	
  INTERPRETATION AND
  DEFINITIONS

  	
   

  
	
  SECTION 1.1 Definitions

  	
   

  
	
  ARTICLE II

  	
   

  
	
  TRUST INDENTURE ACT

  	
   

  
	
  SECTION 2.1 Trust Indenture Act: Application

  	
   

  
	
  SECTION 2.2 Lists of Holders of Securities

  	
   

  
	
  SECTION 2.3 Reports by the Institutional Trustee

  	
   

  
	
  SECTION 2.4 Periodic Reports to Institutional
  Trustee

  	
   

  
	
  SECTION 2.5 Evidence of Compliance with Conditions
  Precedent

  	
   

  
	
  SECTION 2.6 Events of Default: Waiver

  	
   

  
	
  SECTION 2.7 Event of Default: Notice

  	
   

  
	
  ARTICLE III

  	
   

  
	
  ORGANIZATION

  	
   

  
	
  SECTION 3.1 Name

  	
   

  
	
  SECTION 3.2 Office

  	
   

  
	
  SECTION 3.3 Declaration

  	
   

  
	
  SECTION 3.4 Authority

  	
   

  
	
  SECTION 3.5 Title to Property of the Trust

  	
   

  
	
  SECTION 3.6 Powers and Duties of the Regular
  Trustees

  	
   

  
	
  SECTION 3.7 Prohibition of Actions by the Trust and
  the Trustees

  	
   

  
	
  SECTION 3.8 Powers and Duties of the Institutional
  Trustee

  	
   

  
	
  SECTION 3.9 Certain Duties and Responsibilities of
  the Institutional Trustee

  	
   

  
	
  SECTION 3.10 Certain Rights of Institutional Trustee

  	
   

  
	
  SECTION 3.11 Delaware Trustee

  	
   

  
	
  SECTION 3.12 Execution of Documents

  	
   

  
	
  SECTION 3.13 Not Responsible for Recitals or
  Issuance of Securities

  	
   

  
	
  SECTION 3.14 Duration of Trust

  	
   

  
	
  SECTION 3.15 Mergers

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  SPONSOR

  	
   

  
	
  SECTION 4.1 Sponsor’s Purchase of Common Securities

  	
   

  
	
  SECTION 4.2 Responsibilities of the Sponsor

  	
   

  
	
  SECTION 4.3 Guarantee of Payment of Trust
  Obligations

  	
   

  
	
  ARTICLE V

  	
   

  
	
  TRUSTEES

  	
   

  
	
  SECTION 5.1 Number of Trustees

  	
   

  
	
  SECTION 5.2 Delaware Trustee

  	
   

  
	
  SECTION 5.3 Institutional Trustee: Eligibility

  	
   

  
	
  SECTION 5.4 Qualifications of Regular Trustees and
  Delaware Trustee Generally

  	
   

  
	
  SECTION 5.5 Initial Trustees: Additional Powers of
  Regular Trustees

  	
   

  
	
  SECTION 5.6 Appointment, Removal and Resignation of
  Trustees

  	
   

  
	
  SECTION 5.7 Vacancies among Trustees

  	
   

  
	
  SECTION 5.8 Effect of Vacancies

  	
   

  
	
  SECTION 5.9 Meetings

  	
   

  
	
  SECTION 5.10 Delegation of Power

  	
   

  
	
  SECTION 5.11 Merger, Conversion, Consolidation or
  Succession to Business

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  DISTRIBUTIONS

  	
   

  
	
  SECTION 6.1 Distributions

  	
   

  
	
  ARTICLE VII

  	
   

  
	
  ISSUANCE OF SECURITIES

  	
   

  
	
  SECTION 7.1 General Provisions Regarding Securities

  	
   

  
	
  SECTION 7.2 Registrar and Paying Agent

  	
   

  
	
  SECTION 7.3 Paying Agent to Hold Money in Trust

  	
   

  



 


3





















 


	
  ARTICLE VIII

  	
   

  
	
  DISSOLUTION OF TRUST

  	
   

  
	
  SECTION 8.1 Dissolution of Trust

  	
   

  
	
  ARTICLE IX

  	
   

  
	
  TRANSFER OF INTERESTS

  	
   

  
	
  SECTION 9.1 Transfer of Securities

  	
   

  
	
  SECTION 9.2 Transfer of Certificates

  	
   

  
	
  SECTION 9.3 Deemed Security Holders

  	
   

  
	
  SECTION 9.4 Book Entry Interests

  	
   

  
	
  SECTION 9.5 Notices to Clearing Agency

  	
   

  
	
  SECTION 9.6 Appointment of Successor Clearing Agency

  	
   

  
	
  SECTION 9.7 Definitive Preferred Security
  Certificates

  	
   

  
	
  SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
  Certificates

  	
   

  
	
  ARTICLE X

  	
   

  
	
  LIMITATION OF LIABILITY
  OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

  	
   

  
	
  SECTION 10.1 Liability

  	
   

  
	
  SECTION 10.2 Exculpation

  	
   

  
	
  SECTION 10.3 Fiduciary Duty

  	
   

  
	
  SECTION 10.4 Indemnification

  	
   

  
	
  SECTION 10.5 Outside Businesses

  	
   

  
	
  ARTICLE XI

  	
   

  
	
  ACCOUNTING

  	
   

  
	
  SECTION 11.1 Fiscal Year

  	
   

  
	
  SECTION 11.2 Certain Accounting Matters

  	
   

  
	
  SECTION 11.3 Banking

  	
   

  
	
  SECTION 11.4 Withholding

  	
   

  
	
  ARTICLE XII

  	
   

  
	
  AMENDMENTS AND MEETINGS

  	
   

  
	
  SECTION 12.1 Amendments

  	
   

  
	
  SECTION 12.2 Meetings of the Holders of Securities:
  Action by Written Consent

  	
   

  
	
  ARTICLE XIII

  	
   

  
	
  REPRESENTATIONS OF
  INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

  	
   

  
	
  SECTION 13.1 Representations and Warranties of
  Institutional Trustee

  	
   

  
	
  SECTION 13.2 Representations and Warranties of
  Delaware Trustee

  	
   

  
	
  ARTICLE XIV

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
  SECTION 14.1 Notices

  	
   

  
	
  SECTION 14.2 Governing Law

  	
   

  
	
  SECTION 14.3 Intention of the Parties

  	
   

  
	
  SECTION 14.4 Headings

  	
   

  
	
  SECTION 14.5 Successors and Assigns

  	
   

  
	
  SECTION 14.6 Partial Enforceability

  	
   

  
	
  SECTION 14.7 Counterparts

  	
   

  



 


4





















 


AMENDED AND RESTATED DECLARATION OF TRUST
(“Declaration”) dated and effective as of [        ,
200  ], by the Trustees (as defined herein), the Sponsor (as
defined herein) and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration;


 


WHEREAS, certain of the Trustees and the Sponsor
established St. Paul Travelers Capital Trust [II] [III] [IV] [V] (the “Trust”),
a trust under the Statutory Trust Act (as defined herein), pursuant to a
Declaration of Trust dated as of [                ]
(the “Original Declaration”), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on [                ],
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein);


 


WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration.


 


NOW, THEREFORE, it being the intention of the parties
hereto to continue the Trust as a statutory trust under the Statutory Trust Act
and that this Declaration constitute the governing instrument of such statutory
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.


 


ARTICLE I


INTERPRETATION AND
DEFINITIONS


 


SECTION 1.1  Definitions.


 


Unless the context otherwise requires:


 


(a) Capitalized terms
used in this Declaration but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;


 


(b) a term defined anywhere
in this Declaration has the same meaning throughout;


 


(c) all references to
“the Declaration” or “this Declaration” are to this Declaration as modified,
supplemented or amended from time to time;


 


(d) all references in
this Declaration to Articles, Sections, Annexes and Exhibits are to Articles
and Sections of, and Annexes and Exhibits to, this Declaration unless otherwise
specified;


 


(e) a term defined in the
Trust Indenture Act has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or unless the context otherwise requires;
and


 


(f) a reference to the
singular includes the plural and vice versa.


 


“Affiliate” has the same meaning as given to that term
in Rule 405 under the Securities Act, or any successor provision thereto and as
may be amended from time to time.


 


“Authorized Officer” of a Person means any vice
president, senior vice president, president, chief executive officer,
treasurer, controller or other individual executing a document or otherwise
acting by virtue of authority vested in such individual by such Person in an
instrument expressly designating such individual as an Authorized Officer and
referencing this Declaration.


 


“Book Entry Interest” means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section 9.4.


 


5





















 


“Business Day”
means any day other than a day on which banking institutions in the City of New
York, New York are authorized or required by any applicable law or executive
order to close.


 


“Certificate” means a Common Security Certificate or a
Preferred Security Certificate.


 


“Clearing Agency” means an organization registered as
a “Clearing Agency” pursuant to Section 17A of the Exchange Act that is acting
as depositary for the Preferred Securities and in whose name or in the name of
a nominee of that organization shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.


 


“Clearing Agency Participant” means a broker, dealer,
bank, other financial institution or other Person for whom from time to time
the Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.


 


“Closing Date” means the Closing Date as defined in
the Underwriting Agreement, which date is also the date of execution and
delivery of this Declaration.


 


“Code” means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.


 


“Commission” means the Securities and Exchange
Commission.


 


“Common Security” has the meaning specified in Section
7.1.


 


“Common Security Certificate” means a definitive
certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.


 


“Company Indemnified Person” means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.


 


“Corporate Trust Office” means the office of the
Institutional Trustee at which the corporate trust business of the Institutional
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Declaration is located at 4 New York
Plaza, New York, New York 10004-2413, Attention: Institutional Trust Services.


 


“Covered Person” means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust’s Affiliates; and (b) any Holder of Securities.


 


“Debenture Issuer” means the Sponsor, in its capacity
as issuer of the Debentures under the Indenture.


 


“Debenture Trustee” means JPMorgan Chase Bank, N.A.,
as trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.


 


“Debentures” means the [ ]% Subordinated Debentures
due [ ], to be issued by the Debenture Issuer pursuant to the Indenture to be
held by the Institutional Trustee.


 


“Definitive Preferred Security Certificates” has the
meaning set forth in Section 9.4.


 


“Delaware Trustee” has the meaning set forth in Section
5.2.


 


“Distribution” has the meaning set forth in Section
6.1.


 


“DTC” means The Depository Trust Company, the initial
Clearing Agency.


 


“Event of Default” in respect of the Securities means
an Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debentures.


 


6





















 


“Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, or any successor legislation.


 


“Fiduciary Indemnified Person” has the meaning set
forth in Section 10.4(b).


 


“Global Certificate” has the meaning set forth in
Section 9.4.


 


“Holder” means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Statutory Trust Act.


 


“Indemnified Person” means a Company Indemnified
Person or a Fiduciary Indemnified Person.


 


“Indenture” means the Subordinated Debt Indenture
dated as of [          , 200  ],
between the Debenture Issuer and the Debenture Trustee, as amended or
supplemented from time to time, pursuant to which the Debentures are to be
issued.


 


“Institutional Trustee” means the Trustee meeting the
eligibility requirements set forth in Section 5.3.


 


“Institutional Trustee Account” has the meaning set forth
in Section 3.8(c).


 


“Investment Company” means an investment company as
defined in the Investment Company Act.


 


“Investment Company Act” means the Investment Company
Act of 1940, as amended, or any successor legislation.


 


“Investment Company Event” has the meaning set forth
in Annex I hereto.


 


“Legal Action” has the meaning set forth in Section
3.6(g).


 


“List of Holders” has the meaning set forth in Section
2.2(a).


 


“Majority in liquidation amount of the Securities”
means, except to the extent otherwise provided in the terms of the Preferred
Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities
voting together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of an aggregate
liquidation amount representing more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.


 


“Officers’ Certificate” means, with respect to any
Person, a certificate signed by two Authorized Officers of such Person. Any
Officers’ Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:


 


(A)  a statement
that each officer signing the Officers’ Certificate has read the covenant or
condition and the definitions relating thereto;


 


(B)  a brief
statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate;


 


(C)  a statement
that each such officer has made such examination or investigatiOn as, in such
officer’s opinion, is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and


 


(D)  a statement
as to whether, in the opinion of each such officer, such condition or covenant
has been complied with.


 


7





















 


“Paying Agent” has the meaning specified in Section
3.8(h).


 


“Payment Amount” has the meaning specified in Section
6.1.


 


“Person” means a legal person, including any
individual, corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.


 


“Preferred Securities Guarantee” means the guarantee
agreement dated as of [          ,
200  ], between the Sponsor and the trustee named therein
relating to the Preferred Securities.


 


“Preferred Security” has the meaning specified in
Section 7.1.


 


“Preferred Security Beneficial Owner” means, with
respect to a Book Entry Interest, a Person who is the beneficial owner of such
Book Entry Interest, as reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).


 


“Preferred Security Certificate” means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.


 


“Quorum” means a majority of the Regular Trustees or,
if there are only two Regular Trustees, both of them.


 


“Regular Trustee” has the meaning specified in Section
5.1.


 


“Related Party” means, with respect to the Sponsor,
any direct or indirect wholly owned subsidiary of the Sponsor or any other
Person that owns, directly or indirectly, 100% of the outstanding voting
securities of the Sponsor.


 


“Responsible Officer” means, with respect to the
Institutional Trustee, any officer of the Institutional Trustee with direct
responsibility for the administration of this Amended and Restated Declaration
of Trust and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer’s
knowledge of and familiarity with the particular subject.


 


“Rule 3a-5” means Rule 3a-5 under the Investment
Company Act.


 


“Securities” means the Common Securities and the
Preferred Securities.


 


“Securities Act” means the Securities Act of 1933, as
amended from time to time, or any successor legislation.


 


“Special Event” has the meaning set forth in Annex I
hereto.


 


“Sponsor” means The St. Paul Travelers Companies,
Inc., or any successor entity in a merger, consolidation or amalgamation, in
its capacity as sponsor of the Trust.


 


“St. Paul Travelers” means The St. Paul Travelers
Companies, Inc., a Minnesota corporation.


 


“Statutory Trust Act” means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Sections 3801 et seq., as it may be amended
from time to time, or any successor legislation.


 


 “Successor
Delaware Trustee” has the meaning set forth in Section 5.6.


 


“Successor Entity” has the meaning set forth in
Section 3.15(b).


 


“Successor Institutional Trustee” has the meaning set
forth in Section 5.6.


 


8





















 


“Successor Securities” has the meaning set forth in
Section 3.15(b).


 


“Super Majority” has the meaning set forth in Section
2.6(a)(ii).


 


“Tax Event” has the meaning set forth in Annex I
hereto.


 


“10% in liquidation amount of the Securities” means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of an aggregate liquidation amount
representing 10% or more of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.


 


“Treasury Regulations” means the income tax
regulations, including temporary and proposed regulations, promulgated under
the Code by the United States Treasury, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).


 


“Trustee” or “Trustees” means each Person who has
signed this Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.


 


“Trust Indenture Act” means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.


 


“Underwriting Agreement” means the Underwriting
Agreement for the offering and sale of Preferred Securities substantially in
the form appearing as exhibit 1.5 to the registration statement on Form S-3 of
St. Paul Travelers and the Trust relating to the Preferred Securities and the
related Preferred Securities Guarantee.


 


ARTICLE II


TRUST INDENTURE ACT


 


SECTION 2.1  Trust Indenture Act: Application.


 


(a) This Declaration is subject to the provisions of
the Trust Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.


 


(b) The Institutional Trustee shall be the only
Trustee that is a Trustee for the purposes of the Trust Indenture Act.


 


(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.


 


(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.


 


SECTION 2.2  Lists of Holders of Securities.


 


(a) Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide the Institutional Trustee (i) within 14 days
after each record date for payment of Distributions, a list, in such form as
the Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Securities (“List of Holders”) as of such record date, and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request therefor, a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Institutional Trustee; provided,


 


9





















 


that neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders given to the
Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust. The Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Institutional trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders. Unless
supplemented, amended or restated pursuant to this Section 2.2(a), the
Institutional Trustee shall be entitled to rely exclusively on the last List of
Holders provided to it by the Sponsor or any Regular Trustee.


 


(b) The Institutional Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture
Act.


 


SECTION 2.3  Reports by the Institutional Trustee.


 


Within 60 days after May 15 of each year, the
Institutional Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by such Section 313. The Institutional
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.


 


SECTION 2.4  Periodic Reports to Institutional Trustee.


 


Each of the Sponsor and the Regular Trustees on behalf
of the Trust shall provide to the Institutional Trustee such documents, reports
and information as required by Sections 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.


 


SECTION 2.5  Evidence of Compliance With Conditions
Precedent.


 


Each of the Sponsor and the Regular Trustees on behalf
of the Trust shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Sections 314(c) of
the Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers’
Certificate.


 


SECTION 2.6  Events of Default: Waiver.


 


(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:


 


(i) is not waivable under
the Indenture, the Event of Default under the Declaration shall also not be
waivable; or


 


(ii) is waivable only
with the consent of holders of more than a majority in principal amount of the
Debentures (a “Super Majority”) affected thereby, only the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities that
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding may waive such Event of Default in respect of the
Preferred Securities under the Declaration.


 


The foregoing provisions of this Section 2.6(a) shall
be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(l)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Preferred Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or an Event of Default with
respect to the Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default with
respect to the


 


10





















 


Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.


 


(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:


 


(i) is not waivable under
the Indenture, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided in this
Section 2.6(b), the Event of Default under the Declaration shall also not be
waivable; or


 


(ii) is waivable only
with the consent of a Super Majority, except where the Holders of the Common
Securities are deemed to have waived such Event of Default under the
Declaration as provided in this Section 2.6(b), only the Holders of at least
the proportion in aggregate liquidation amount of the Common Securities that
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding may waive such Event of Default in respect of the Common
Securities under the Declaration; provided further, each Holder of Common
Securities will be deemed to have waived any such Event of Default and all
Events of Default with respect to the Common Securities and its consequences
until all Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated, and until such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of
the Trust Indenture Act and such sections are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Subject to the foregoing provisions of this Section 2.6(b), upon the waiver of
an Event of Default by the Holders of a Majority in liquidation amount of the
Common Securities, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.


 


(c) A waiver of an Event of Default under the
Indenture by the Institutional Trustee, at the direction of the Holders of the
Preferred Securities, constitutes a waiver of the corresponding Event of
Default under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the Securities,
as permitted by the Trust Indenture Act.


 


SECTION 2.7  Event of Default: Notice.


 


(a) The Institutional Trustee shall, within 90 days
after the Institutional Trustee has knowledge of the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Securities (i) notices of all defaults with respect to the Securities actually
known to a Responsible Officer of the Institutional Trustee, unless such Event
of Default has been cured before the giving of such notice and (ii) any notice
of default received from the Indenture Trustee with respect to the Debentures,
which notice from the Institutional Trustee to the Holders shall state that an
Event of Default under the Indenture also constitutes an Event of Default with
respect to the Securities; provided that, except for a default in the payment
of principal of (or premium, if any) or interest on any of the Debentures or in
the payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.


 


(b) The Institutional Trustee shall not be deemed to
have knowledge of any default except:


 


(i) a default under
Sections 501(1) and 501(2) of the Indenture; or


 


(ii) any default as to
which the Institutional Trustee shall have received written notice or of which
a


 


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Responsible Officer of the Institutional Trustee
charged with the administration of this Declaration shall have actual
knowledge.


 


ARTICLE III


ORGANIZATION


 


SECTION 3.1  Name.


 


The Trust is named “St. Paul Travelers Capital Trust
[II] [III] [IV] [V] as such name may be modified from time to time by the
Regular Trustees following written notice to the Holders of Securities. The
Trust’s activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.


 


SECTION 3.2  Office.


 


The address of the principal office of the Trust is
c/o The St. Paul Travelers Companies, Inc., 385 Washington Street, St. Paul,
Minnesota 55102. On ten Business Days’ written notice to the Institutional
Trustee, the Delaware Trustee and the Holders of Securities, the Regular
Trustees may designate another principal office.


 


SECTION 3.3  Declaration.


 


(a) The exclusive purposes and functions of the Trust
are (i) to issue and sell Securities and use the proceeds from such sale to
acquire the Debentures, (ii) to maintain the status of the Trust as a grantor
trust for United States federal income tax purposes, and (iii) except as
otherwise limited herein, to engage in only those other activities necessary,
or incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust
not to be classified for United States federal income tax purposes as a grantor
trust.


 


(b) The Trust will be classified as a grantor trust
for United States federal income tax purposes under Subpart E of Subchapter J
of the Code, pursuant to which the Holders of the Preferred Securities and the
Common Securities will be the owners of the Trust for United States federal
income tax purposes, and such Holders will include directly in their gross
income the income, gain, deduction or loss of the Trust as if the Trust did not
exist. By the acceptance of this Trust, neither the Trustees, the Sponsor nor
the owners of the Preferred Securities or Common Securities will take any
position for United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.


 


SECTION 3.4  Authority.


 


Subject to the limitations provided in this
Declaration and to the specific duties of the Institutional Trustee, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust and
an action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.


 


SECTION 3.5  Title to Property of the Trust.


 


Except as provided in Section 3.8 with respect to the
Debentures and the Institutional Trustee Account or as otherwise expressly provided
in this Declaration, legal title to all assets of the Trust shall be vested in
the Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.


 


SECTION 3.6  Powers and Duties of the Regular Trustees.


 


The Regular Trustees shall have the exclusive power,
duty and authority to cause the Trust to engage in the following activities:


 


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(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there shall
be no beneficial interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to a simultaneous issuance of both
Preferred Securities and Common Securities on the Closing Date;


 


(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:


 


(i) assist in the
preparation of a prospectus in preliminary and final form prepared by the
Sponsor in relation to the offering and sale of Preferred Securities and to assist
in the preparation of and filing with the Commission on behalf of the Trust a
registration statement on Form S-3 or on another appropriate form (including,
if appropriate, a registration statement under Rule 462(b) of the Securities
Act), including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities;


 


(ii) execute and file any
documents prepared by the Sponsor, or take any acts determined by the Sponsor
to be necessary, in order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;


 


(iii) assist in the
filing of an application, prepared by the Sponsor, to the New York Stock
Exchange, Inc., any other national stock exchange or the Nasdaq National Market
for listing upon notice of issuance of any Preferred Securities;


 


(iv) assist in the filing
with the Commission on behalf of the Trust a registration statement on Form
8-A, prepared by the Sponsor, including any pre-effective or post-effective
amendments thereto, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act;


 


(v) assist in the
preparation of the Underwriting Agreement providing for the sale and
distribution of the Preferred Securities; and


 


(vi) execute and deliver
letters, documents, or instruments with the Clearing Agency relating to the
Preferred Securities;


 


(c) to acquire the Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;


 


(d) to give the Sponsor and the Institutional Trustee
prompt written notice of the occurrence of a Special Event;


 


(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges, and to
issue relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;


 


(f) to take all actions and perform such duties as may
be required of the Regular Trustees pursuant to the terms of the Securities or
this Declaration;


 


(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or demands of or
against the Trust (“Legal Action”), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;


 


(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such services;


 


13





















 


(i) to give the certificate required by Section
314(a)(4) of the Trust Indenture Act to the Institutional Trustee, which
certificate may be executed by any Regular Trustee;


 


(j) to incur expenses that are necessary or incidental
to carry out any of the purposes of the Trust;


 


(k) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;


 


(l) to give prompt written notice to the Holders of
the Securities of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;


 


(m) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust’s valid
existence, rights, franchises and privileges as a statutory trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of the
Preferred Securities or to enable the Trust to effect the purposes for which
the Trust was created;


 


(n) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:


 


(i) causing the Trust not
to be deemed to be an Investment Company required to be registered as such
under the Investment Company Act;


 


(ii) causing the Trust to
be classified for United States federal income tax purposes as a grantor trust;
and


 


(iii) cooperating with
the Debenture Issuer to ensure that the Debentures will be treated as
indebtedness of the Debenture Issuer for United States federal income tax
purposes, provided that such action does not adversely affect the interests of
Holders;


 


(o) to the extent provided in this Declaration,
terminating, dissolving and liquidating the Trust and preparing, executing and
filing the certificate of cancellation with the Secretary of State of the State
of Delaware;


 


(p) to take all action necessary to cause all
applicable tax returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust; and


 


(q) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.


 


The Regular Trustees must exercise the powers set
forth in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Regular Trustees shall
not take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.


 


Subject to this Section 3.6, the Regular Trustees
shall have none of the powers or the authority of the Institutional Trustee set
forth in Section 3.8.


 


Any expenses incurred by the Regular Trustees pursuant
to this Section 3.6 shall be reimbursed by the Debenture Issuer.


 


SECTION 3.7  Prohibition of Actions by the Trust and the
Trustees.


 


(a) The Trust shall not, and the Trustees (including
the Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and no Trustee (including the Institutional Trustee) shall cause the Trust to:


 


(i) invest any proceeds
received by the Trust from holding the Debentures, but shall promptly
distribute all such proceeds to Holders of Securities pursuant to the terms of
this Declaration and of the Securities;


 


14





















 


(ii) acquire any assets
other than as expressly provided herein;


 


(iii) possess Trust
property for other than a Trust purpose;


 


(iv) make any loans or
incur any indebtedness other than loans represented by the Debentures;


 


(v) possess any power or
otherwise act in such a way as to vary the Trust assets or the terms of the
Securities in any way whatsoever;


 


(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other than the
Securities;


 


(vii) other than as
provided in this Declaration or Annex I, (A) direct the time, method and place
of exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is waivable under
the Indenture, or (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable;


 


(viii) consent to any
amendment, modification or termination of the Indenture or the Debentures where
such consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such amendment, modification or termination will
not cause more than an insubstantial risk that the Trust will not be classified
as a grantor trust for United States federal income tax purposes; or


 


(ix) take any action
inconsistent with the status of the Trust as a grantor trust for United States
federal income tax purposes.


 


SECTION 3.8  Powers and Duties of the Institutional
Trustee.


 


(a) The legal title to the Debentures shall be owned
by and held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.


 


(b) The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (if the Institutional Trustee does not also act as Delaware
Trustee).


 


(c) The Institutional
Trustee shall:


 


(i) establish and
maintain a segregated non-interest bearing trust account (the “Institutional
Trustee Account”) in the name of and under the exclusive control of the
Institutional Trustee on behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the Debentures held by the
Institutional Trustee, deposit such funds into the Institutional Trustee
Account and make payments to the Holders of the Preferred Securities and
Holders of the Common Securities from the Institutional Trustee Account in
accordance with Section 6.1. Funds in the Institutional Trustee Account shall
be held uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured indebtedness
assigned by a “nationally recognized statistical rating organization,” as that
term is defined for purposes of Rule 436(g)(2) under the Securities Act, is at
least equal to the rating assigned to the Preferred Securities by a nationally
recognized statistical rating organization, unless the Preferred Securities are
not rated, in which case the banking institution’s long-term unsecured
indebtedness shall be rated at least investment grade by such an organization;


 


(ii) engage in such
ministerial activities as shall be specified in written instructions from the
Regular Trustees or the Sponsor to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are redeemed
or mature; and


 


15





















 


(iii) upon written notice
of distribution issued by the Regular Trustees in accordance with the terms of
the Securities, engage in such ministerial activities as shall be specified in
written instructions from the Regular Trustees or the Sponsor to effect the
distribution of the Debentures to Holders of Securities upon the occurrence of
certain Special Events or other specified circumstances pursuant to the terms
of the Securities.


 


(d) The Institutional Trustee shall take all actions
and perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of the Securities or this Declaration.


 


(e) Subject to Section 2.6, the Institutional Trustee
shall take any Legal Action which arises out of or in connection with an Event
of Default of which a Responsible Officer of the Institutional Trustee has
actual knowledge or the Institutional Trustee’s duties and obligations under
this Declaration or the Trust Indenture Act.


 


(f)  The
Institutional Trustee shall not resign as a Trustee unless either:


 


(i) the Trust has been
completely liquidated and the proceeds of the liquidation distributed to the
Holders of Securities pursuant to the terms of the Securities; or


 


(ii) a Successor
Institutional Trustee has been appointed and has accepted that appointment in
accordance with Section 5.6.


 


(g) The Institutional Trustee shall have the legal
power to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of such Securities, this Declaration, the
Statutory Trust Act and the Trust Indenture Act.


 


(h) The Institutional Trustee may authorize one or
more Persons (each, a “Paying Agent”) to pay Distributions, redemption payments
or liquidation payments on behalf of the Trust with respect to all Securities
and any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Institutional Trustee at
any time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Institutional Trustee.


 


(i) Subject to this Section 3.8, the Institutional
Trustee shall have none of the duties, liabilities, powers or the authority of
the Regular Trustees set forth in Section 3.6.


 


The Institutional Trustee shall be authorized to
undertake any actions set forth in Section 317(a) of the Trust Indenture Act.


 


The Institutional Trustee must exercise the powers set
forth in this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional Trustee
shall not take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.


 


SECTION 3.9  Certain Duties and Responsibilities of the
Institutional Trustee.


 


(a) The Institutional Trustee, before the occurrence
of any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in the exercise of such
rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.


 


(b) No provision of this Declaration shall be
construed to relieve the Institutional Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


16





















 


(i) prior to the
occurrence of an Event of Default and after the curing or waiving of all such
Events of Default that may have occurred:


 


(A) the duties and
obligations of the Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the Institutional Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee; and


 


(B) in the absence of bad
faith on the part of the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Institutional Trustee and substantially conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be under a duty to examine the same to
determine whether or not they substantially conform to the requirements of this
Declaration;


 


(ii) the Institutional
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Institutional Trustee, unless it shall be proved
that the Institutional Trustee was negligent in ascertaining the pertinent
facts;


 


(iii) the Institutional
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the Securities relating to the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;


 


(iv) no provision of this
Declaration shall require the Institutional Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Institutional Trustee against such
risk or liability is not reasonably assured to it;


 


(v) the Institutional
Trustee’s sole duty with respect to the custody, safe keeping and physical
preservation of the Debentures and the Institutional Trustee Account shall be
to deal with such property in a similar manner as the Institutional Trustee
deals with similar property for its own account, subject to the protections and
limitations on liability afforded to the Institutional Trustee under this
Declaration and the Trust Indenture Act;


 


(vi) the Institutional
Trustee shall have no duty or liability for or with respect to the value,
genuineness, existence or sufficiency of the Debentures or the payment of any
taxes or assessments levied thereon or in connection therewith;


 


(vii) the Institutional
Trustee shall not be liable for any interest on any money received by it except
as it may otherwise agree in writing with the Sponsor. Money held by the
Institutional Trustee need not be segregated from other funds held by it except
in relation to the Institutional Trustee Account maintained by the
Institutional Trustee pursuant to Section 3.8(c)(i) to the extent required by
law; and


 


(viii) the Institutional
Trustee shall not be responsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under this Declaration,
nor shall the Institutional Trustee be liable for any act, omission, default or
misconduct of the Regular Trustees or the Sponsor.


 


SECTION 3.10  Certain Rights of Institutional Trustee.


 


(a)  Subject
to the provisions of Section 3.9:


 


(i) the Institutional
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,


 


17





















 


order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;


 


(ii) any direction or act
of the Sponsor or the Regular Trustees contemplated by this Declaration shall
be sufficiently evidenced by an Officers’ Certificate;


 


(iii) whenever in the
administration of this Declaration, the Institutional Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Institutional Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers’ Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or the
Regular Trustees;


 


(iv) the Institutional
Trustee shall have no duty to see to any recording, filing or registration of
any instrument (including any financing or continuation statement or any filing
under tax or securities laws) or any rerecording, refiling or registration
thereof;


 


(v) the Institutional
Trustee may consult with counsel or other experts and the advice or opinion of
such counsel and experts with respect to legal matters or advice within the
scope of such experts’ area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its Affiliates,
and may include any of its employees. The Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;


 


(vi) the Institutional
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the Institutional Trustee, against
the costs, expenses (including attorneys’ fees and expenses and the expenses of
the Institutional Trustee’s agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by
this Declaration;


 


(vii) the Institutional
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Institutional
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;


 


(viii) the Institutional
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians, nominees or
attorneys and the Institutional Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;


 


(ix) any action taken by
the Institutional Trustee or its agents hereunder shall bind the Trust and the
Holders of the Securities, and the signature of the Institutional Trustee or
its agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the terms
and provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee’s or its agent’s taking such action;


 


(x) whenever in the
administration of this Declaration the Institutional Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions may only be
given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under the
terms of the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions; and


 


18





















 


(xi) except as otherwise
expressly provided by this Declaration, the Institutional Trustee shall not be
under any obligation to take any action that is discretionary under the
provisions of this Declaration.


 


(b) No provision of this Declaration shall be deemed
to impose any duty or obligation on the Institutional Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Institutional Trustee shall be construed to be a duty.


 


SECTION 3.11   Delaware Trustee.


 


Notwithstanding any other provision of this
Declaration other than Section 5.2, the Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Statutory Trust Act. In performing such
limited role, the Delaware Trustee shall have all of the rights and protections
afforded to the Institutional Trustee under Section 3.9(b)(i) (except that (i)
the Delaware Trustee’s standard of care shall be gross negligence, and (ii)
such rights and protections shall pertain to the Delaware Trustee without
regard to the occurrence of any Event of Default) and Section 3.10 of this
Declaration.


 


SECTION 3.12   Execution of Documents.


 


Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Statutory Trust Act, a majority of or,
if there are only two, any Regular Trustee or, if there is only one, such
Regular Trustee is authorized to execute on behalf of the Trust any documents
that the Regular Trustees have the power and authority to execute pursuant to
Section 3.6.


 


SECTION 3.13   Not Responsible for Recitals or Issuance of
Securities.


 


The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.


 


SECTION 3.14   Duration of Trust.


 


The Trust, unless dissolved pursuant to the provisions
of Article VIII hereof, shall dissolve on the date that is 49 years after the
Closing Date.


 


SECTION 3.15   Mergers.


 


(a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c) or in Annex I.


 


(b) The Trust may, with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Securities, the Delaware Trustee or
the Institutional Trustee, and subject to the terms of Section 3.15(c),
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that:


 


(i) such successor entity (the “Successor Entity”)
either:


 


(A) expressly assumes all
of the obligations of the Trust under the Securities; or


 


(B) substitutes for the
Securities other securities having substantially the same terms as the
Preferred


 


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Securities (the “Successor Securities”) so long as the
Successor Securities rank the same as the Preferred Securities rank with
respect to Distributions and payments upon liquidation, redemption and
otherwise;


 


(ii) the Debenture Issuer
expressly acknowledges a trustee of the Successor Entity that possesses the
same powers and duties as the Institutional Trustee as the Holder of the
Debentures;


 


(iii) if the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;


 


(iv) such merger,
consolidation, amalgamation or replacement does not cause the Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;


 


(v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of such Holders’ interests in the Successor Entity as a result of
such merger, consolidation, amalgamation or replacement);


 


(vi) such Successor
Entity has a purpose substantially identical to that of the Trust;


 


(vii) prior to such
merger, consolidation, amalgamation or replacement, the Trust has received an
opinion of a nationally recognized independent counsel to the Trust experienced
in such matters to the effect that:


 


(A) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the Holders’ interest in the Successor Entity);


 


(B) following such
merger, consolidation, amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment Company;


 


(C) following such
merger, consolidation, amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for United States
federal income tax purposes;


 


(viii) the Sponsor
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Preferred Securities
Guarantee, and


 


(ix) the Sponsor, or,
subject to Section 9.1(c), a Related Party, continues to hold the Common
Securities so long as any Preferred Securities or Successor Securities remain
outstanding.


 


(c) Notwithstanding Section 3.15(b), the Trust shall
not, without the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if in the opinion of a nationally recognized
independent tax counsel experienced in such matters, such consolidation,
amalgamation, merger or replacement would cause the Trust or Successor Entity
to be classified as other than a grantor trust for United States federal income
tax purposes.


 


ARTICLE IV


SPONSOR


 


SECTION 4.1  Sponsor’s Purchase of Common Securities.


 


On the Closing Date, the Sponsor will purchase all of
the Common Securities issued by the Trust in an amount equal to 3% or more of
the capital of the Trust, at the same time as the Preferred Securities are
sold.


 


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SECTION 4.2  Responsibilities of the Sponsor.


 


In connection with
the issue and sale of the Preferred Securities, the Sponsor is hereby appointed
an agent of the Trust pursuant to Section 3806(b)(7) of the Statutory Trust Act
and in such capacity shall have the exclusive right and responsibility to
engage in the following activities:


 


(a) to prepare a prospectus relating to the offering
of Preferred Securities by the Trust and to prepare for filing by the Trust
with the Commission, and execute on behalf of the Trust, a registration
statement on Form S-3 or on another appropriate form (including, if
appropriate, a registration statement under Rule 462(b) of the Securities Act)
and any pre-effective or post-effective amendments thereto, relating to the
registration under the Securities Act of the Preferred Securities;


 


(b) to determine the States in which to take
appropriate action to qualify or register for sale of all or part of the
Preferred Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;


 


(c) to prepare for filing by the Trust, and execute on
behalf of the Trust, an application to the New York Stock Exchange, any other
national stock exchange or the Nasdaq National Market for listing upon notice
of issuance of any Preferred Securities;


 


(d) to prepare for filing by the Trust with the
Commission, and execute on behalf of the Trust, a registration statement on
Form 8-A, including any pre-effective or post-effective amendments thereto,
relating to the registration of the Preferred Securities under Section 12(b) of
the Exchange Act, including any amendments thereto;


 


(e) to negotiate the terms of, and execute on behalf
of the Trust, the Underwriting Agreement providing for the sale of the
Preferred Securities; and


 


(f) to execute and deliver letters, documents or
instruments on behalf of the Trust with any Clearing Agency.


 


The Sponsor must exercise the powers set forth in this
Section 4.2 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Sponsor shall not take any action
that is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.


 


Subject to this Section 4.2, the Sponsor shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.


 


SECTION 4.3  Guarantee of Payment of Trust Obligations.


 


(a) Subject to the terms and conditions of this
Section 4.3, the Holder of Common Securities hereby irrevocably and
unconditionally guarantees to each Person to whom the Trust is now or hereafter
becomes indebted or liable (the “Beneficiaries”) the full payment, when and as
due, of any and all costs, expenses or liabilities of the Trust (other than
obligations of the Trust to make payments to holders of a Trust Security
pursuant to the terms thereof) (“Obligations”) to such Beneficiaries.


 


(b) The agreement of the Holder of Common Securities
in Section 4.3(a) is intended to be for the benefit of, and to be enforceable
by, all such Beneficiaries, whether or not such Beneficiaries have received
notice hereof.


 


(c) The agreement of the Holder of Common Securities
set forth in Section 4.3(a) shall terminate and be of no further force and
effect upon the later of (a) the date on which full payment has been made of
all amounts payable to all Holders of all the Preferred Securities (whether
upon redemption, liquidation, exchange or otherwise) and (b) the date on which
there are no Beneficiaries remaining; provided, however, that such agreement
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any Holder of Preferred Securities or any Beneficiary must restore
payment of any sums paid under the Preferred Securities, under any Obligation,
under the Preferred Securities Guarantee or under this Declaration for any
reason whatsoever. Such agreement is continuing, irrevocable, unconditional and
absolute.


 


21





















 


ARTICLE V


TRUSTEES


 


SECTION 5.1  Number of Trustees.


 


The number of Trustees initially shall be [four (4)],
and:


 


(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees; and


 


(b) after the issuance of any Securities, the number
of Trustees may be increased or decreased by vote of the Holders of a majority
in liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities, provided, however, that, the number of
Trustees shall in no event be less than two (2); provided further that (i) if
required by the Statutory Trust Act, there shall be at least one Delaware
Trustee; (ii) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a “Regular Trustee”); and (iii) for so
long as this Declaration is required to qualify as an indenture under the Trust
Indenture Act, there shall be one Institutional Trustee, who may also serve as
Delaware Trustee if it meets the applicable requirements.


 


SECTION 5.2
Delaware Trustee.


 


If required by the Statutory Trust Act, one Trustee
(the “Delaware Trustee”) shall be:


 


(a) a natural person who
is a resident of the State of Delaware; or


 


(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Institutional Trustee has
its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall also
be the Delaware Trustee and Section 3.11 shall have no application.


 


SECTION 5.3  Institutional Trustee: Eligibility.


 


(a) There shall at all times be one Trustee that shall
act as Institutional Trustee which shall:


 


(i) not be an Affiliate
of the Sponsor;


 


(ii) be a corporation
organized and doing business under the laws of the United States of America or
any State or territory thereof or of the District of Columbia, or a corporation
or Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
State, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above, then
for the purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published; and


 


(iii) if the Trust is
excluded from the definition of an Investment Company solely by means of Rule
3a-7 and to the extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the “eligible assets” of the Trust, the
Institutional Trustee shall possess those qualifications.


 


(b) If at any time the Institutional Trustee shall
cease to be eligible to so act under Section 5.3(a), the Institutional Trustee
shall immediately resign in the manner and with the effect set forth in Section
5.6(c).


 


(c) If the Institutional Trustee has or shall acquire
any “conflicting interest” within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holders of the Common
Securities (as if such


 


22





















 


Holders were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.


 


(d) The Preferred Securities Guarantee shall be deemed
to be specifically described in this Declaration for purposes of clause (i) of
the first provision contained in Section 310(b) of the Trust Indenture Act.


 


(e) The initial Institutional Trustee shall be as set
forth in Section 5.5 hereof


 


SECTION 5.4  Qualifications of Regular Trustees and
Delaware Trustee Generally.


 


Each Regular Trustee and the Delaware Trustee (unless
the Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
have the power and authority to act as a trustee hereunder and shall be
represented in such capacity by one or more Authorized Officers.


 


SECTION 5.5  Initial Trustees: Additional Powers of
Regular Trustees.


 


(a)  The
initial Regular Trustees shall be:


 


Jay S. Benet and Bruce A. Backberg [in each case] c/o
The St. Paul Travelers Companies, Inc., 385 Washington Street, St. Paul,
Minnesota  55102


 


The initial Delaware Trustee shall be:


 


Chase Manhattan Bank USA, National Association c/o
J.P. Morgan Chase, 500 Stanton Christiana Road, Fl. 3 / OPS4 Newark, Delaware
19713, Attention: Institutional Trust Services


 


The initial Institutional
Trustee shall be:


 


JPMorgan Chase Bank, N.A., 4 New York Plaza, New York,
New York 10004-2413, Attention:  Institutional Trust Services


 


(b) Except as expressly set forth in this Declaration
and except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.


 


SECTION 5.6  Appointment, Removal and Resignation of
Trustees.


 


(a) Subject to Section 5.6(b), Trustees may be
appointed or removed without cause at any time:


 


(i) until the issuance of
any Securities, by written instrument executed by the Sponsor;


 


(ii) after the issuance
of any Securities, by vote of the Holders of a Majority in liquidation amount
of the Common Securities voting as a class at a meeting of the Holders of the
Common Securities or acting by unanimous written consent; and


 


(iii) if an Event of
Default shall have occurred and be continuing after the issuance of any
Preferred Securities, the Institutional Trustee and the Delaware Trustee may
only be removed and appointed by the vote of Holders of a Majority in
liquidation amount of the Preferred Securities voting as a class.


 


(b) (i) The Trustee that acts as Institutional Trustee
shall not be removed in accordance with Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Institutional Trustee under
Section 5.3 (a “Successor Institutional Trustee”) has been appointed and has
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the Sponsor;
and


 


(ii) the Trustee that
acts as Delaware Trustee shall not be removed in accordance with Section 5.6(a)
until a successor Trustee possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a


 


23





















 


“Successor Delaware Trustee”) has been appointed and
has accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.


 


(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; provided,
however, that:


 


(i) No such resignation
of the Trustee that acts as the Institutional Trustee shall be effective:


 


(A) until a Successor
Institutional Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Institutional Trustee and delivered to
the Trust, the Sponsor and the resigning Institutional Trustee; or


 


(B) until the assets of
the Trust have been completely liquidated and the proceeds thereof distributed
to the holders of the Securities; and


 


(ii) no such resignation
of the Trustee that acts as the Delaware Trustee shall be effective until a
Successor Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee whereupon the resigning
Trustee shall be released and discharged of the trusts and other duties imposed
on such Trustee in connection herewith.


 


(d) The Holders of the Common Securities shall use
their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional Trustee
or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.


 


(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Institutional Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.


 


(f) No Institutional Trustee or Delaware Trustee shall
be liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.


 


SECTION 5.7  Vacancies Among Trustees.


 


If a Trustee ceases to hold office for any reason and
the number of Trustees is not reduced pursuant to Section 5.1, or if the number
of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.


 


SECTION 5.8  Effect of Vacancies.


 


The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul, dissolve or terminate the Trust
or terminate this Declaration. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees
by this Declaration.


 


24





















 


SECTION 5.9   Meetings.


 


If there is more than one
Regular Trustee, meetings of the Regular Trustees shall be held from time to
time upon the call of any Regular Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meetings of the Regular Trustees shall be
hand delivered or otherwise delivered in writing (including by facsimile, with
a hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.


 


SECTION 5.10   Delegation of Power.


 


(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including making any governmental filing; and


 


(b) the Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.


 


SECTION 5.11   Merger, Conversion, Consolidation or
Succession to Business.


 


Any corporation into which the Institutional Trustee
or the Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be a party, or any corporation succeeding to
all or substantially all the corporate trust business of the Institutional
Trustee or the Delaware Trustee, as the case may be, shall be the successor of
the Institutional Trustee or the Delaware Trustee, as the case may be,
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.


 


ARTICLE VI


DISTRIBUTIONS


 


SECTION 6.1   Distributions.


 


Holders shall receive Distributions (as defined
herein) in accordance with the applicable terms of the relevant Holder’s
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Additional Interest (as defined in the Indenture)),
premium or principal, or both, on the Debentures held by the Institutional
Trustee (the amount of any such payment being a “Payment Amount”), the
Institutional Trustee shall and is directed to make a distribution (a
“Distribution”) of the Payment Amount to Holders.


 


25





















 


ARTICLE VII


ISSUANCE OF SECURITIES


 


SECTION 7.1   General
Provisions Regarding Securities.


 


(a) The Trust shall issue one class of preferred
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the “Preferred
Securities”) and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the “Common Securities”). The Trust shall issue no securities
or other interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.


 


(b) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any Regular
Trustee of the Trust who shall have signed any of the Securities shall cease to
be such Regular Trustee before the Certificates so signed shall be delivered by
the Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration
any such person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage.


 


(c) The Preferred Security Certificates shall not be
valid until authenticated by the manual signature of an authorized officer of
the Institutional Trustee, the signature of whom shall be conclusive evidence
that the Preferred Security Certificates have been authenticated under this
Declaration. Upon a written order of the Trust signed by one Regular Trustee,
the Institutional Trustee shall authenticate the Preferred Security
Certificates for original issue. The Institutional Trustee may appoint an
authenticating agent acceptable to the Trust to authenticate the Preferred
Security Certificates. An authenticating agent may authenticate the Preferred
Security Certificates whenever the Institutional Trustee may do so. Each reference
to authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Sponsor or an Affiliate thereof.


 


(d) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.


 


(e) Upon issuance of the Securities as provided in
this Declaration, the Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable; subject to Section 10.1 with respect to
the Common Securities.


 


(f) Every Person, by virtue of having become a Holder
or a Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.


 


SECTION 7.2   Registrar and Paying Agent.


 


The Trust shall maintain in New York, New York (i) an
office or agency where Preferred Securities may be presented for registration
of transfer or for exchange (“Registrar”), and (ii) an office or agency where
Preferred Securities may be presented for payment. The Registrar shall keep a
register of the Preferred Securities and of their transfer and exchange. The
Trust may appoint the Registrar and the Paying Agent and may appoint one or
more co-registrars and one or more additional paying agents in such other
locations as it shall determine. The term “Paying Agent” includes any
additional paying agent. The Trust may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder. The Trust shall notify the
Institutional Trustee of the name and address of any agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar or Paying


 


26





















 


Agent, the Institutional Trustee shall act as such. The Trust or any of
its Affiliates may act as Paying Agent or Registrar. The Trust shall act as
Paying Agent, Registrar and co-registrar for the Common Securities.


 


The Trust initially appoints the Institutional Trustee
as Registrar and Paying Agent for the Preferred Securities.


 


SECTION 7.3  Paying Agent to Hold Money in Trust.


 


The Trust shall require each Paying Agent other than
the Institutional Trustee to agree in writing that the Paying Agent will hold
in trust for the benefit of Holders or the Institutional Trustee all money held
by the Paying Agent for the payment of principal or Distributions on Securities,
and will notify the Institutional Trustee if there are insufficient funds.
While any such insufficiency continues, the Institutional Trustee may require a
Paying Agent to pay all money held by it to the Institutional Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Institutional Trustee and to account for any money disbursed by it. Upon
payment to the Institutional Trustee, the Paying Agent (if other than the Trust
or an Affiliate of the Trust) shall have no further liability for the money. If
the Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.


 


ARTICLE VIII


DISSOLUTION OF TRUST


 


SECTION 8.1  Dissolution of Trust.


 


(a) The Trust shall
dissolve:


 


(i) upon the bankruptcy
of any Holder of the Common Securities or the Sponsor;


 


(ii) upon the filing of a
certificate of dissolution or its equivalent with respect to any Holder of the
Common Securities or the Sponsor; or the revocation of the Holder of the Common
Securities or the Sponsor’s charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;


 


(iii) upon the entry of a
decree of judicial dissolution of any Holder of the Common Securities, the
Sponsor or the Trust;


 


(iv) when all of the
Securities shall have been called for redemption and the amounts necessary for
redemption thereof shall have been paid to the Holders in accordance with the
terms of the Securities;


 


(v) at the election of
the Sponsor (which is wholly within its sole discretion); provided that the
Trust shall have been dissolved in accordance with the terms of the Securities
and all of the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or


 


(vi) before the issuance
of any Securities, with the consent of all of the Regular Trustees and the
Sponsor.


 


(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a) or upon the expiration of the term of
the Trust set forth in Section 3.14 and the winding up of the affairs of the
Trust, the Trustees shall file a certificate of cancellation with the Secretary
of State of the State of Delaware.


 


(c) The provisions of Section 3.9(b) and Article X
shall survive the termination of the Trust.


 


ARTICLE IX


TRANSFER OF INTERESTS


 


SECTION 9.1  Transfer of Securities.


 


(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.


 


27





















 


(b) Subject to this Article IX, Preferred Securities
shall be freely transferable.


 


(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor or a Related
Party of the Sponsor; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of a
nationally recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:


 


(i) the Trust would not
continue to be classified for United States federal income tax purposes as a
grantor trust; or


 


(ii) the Trust would be
an Investment Company or the transferee would become an Investment Company.


 


SECTION 9.2  Transfer of Certificates.


 


The Registrar shall provide for the registration of
Certificates representing Preferred Securities and of transfers of such
Certificates, which will be effected without charge but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
government charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Certificate representing Preferred Securities,
the Registrar shall cause one or more new Certificates to be issued in the name
of the designated transferee or transferees. Every such Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder’s attorney duly authorized in writing. Each such Certificate
surrendered for registration of transfer shall be canceled by the Registrar.


 


The Regular Trustees shall provide for the
registration of Certificates representing Common Securities and of transfers of
such Certificates, which will be effected without charge but only upon payment
(with such indemnity as the Regular Trustees may require) in respect of any tax
or other government charges that may be imposed in relation to it. Upon
surrender for registration of transfer of any such Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate representing a
Common Security surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the Regular
Trustees duly executed by the Holder or such Holder’s attorney duly authorized
in writing. Each such Certificate surrendered for registration of transfer
shall be canceled by the Regular Trustees.


 


A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.


 


SECTION 9.3  Deemed Security Holders.


 


The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.


 


SECTION 9.4  Book Entry Interests.


 


Unless otherwise specified in the terms of the
Preferred Securities, the Preferred Securities Certificates, on original
issuance, will be issued in the form of one or more, fully registered, global
Preferred Security Certificates (each a “Global Certificate”), to be delivered
to DTC, the initial Clearing Agency, or its custodian, by, or on behalf of, the
Trust. Such Global Certificates shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of DTC, and no
Preferred Security Beneficial Owner will receive a definitive Preferred
Security Certificate representing such Preferred Security Beneficial Owner’s
interests in such Global Certificates, except as provided in Section 9.7.
Unless and until definitive, fully registered Preferred Security Certificates
(the “Definitive Preferred Security Certificates”) have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7:


 


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(a) the provisions of
this Section 9.4 shall be in full force and effect;


 


(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Preferred Security Beneficial Owners;


 


(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the provisions of
this Section 9.4 shall control; and


 


(d) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants.


 


SECTION 9.5  Notices to Clearing Agency.


 


Whenever a notice or other communication to the
Preferred Security Holders is required under this Declaration, unless and until
Definitive Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7, the Trustees
shall give all such notices and communications specified herein to be given to
the Preferred Security Holders to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.


 


SECTION 9.6  Appointment of Successor Clearing Agency.


 


If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred Securities, the
Regular Trustees may, in their sole discretion, appoint a successor Clearing
Agency with respect to such Preferred Securities.


 


SECTION 9.7  Definitive Preferred Security Certificates.


 


If:


 


(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred Securities and
a successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or


 


(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then:


 


(i) Definitive Preferred
Security Certificates shall be prepared by the Regular Trustees on behalf of
the Trust with respect to such Preferred Securities; and


 


(ii) upon surrender of
the Global Certificates by the Clearing Agency, accompanied by registration
instructions, the Regular Trustees shall cause Definitive Certificates to be
executed, and the Institutional Trustee shall cause such Definitive Securities
to be authenticated and delivered, to Preferred Security Beneficial Owners in
accordance with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on, and shall be protected in relying
on, said instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
as the Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.


 


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SECTION 9.8   Mutilated,
Destroyed, Lost or Stolen Certificates.


 


If:


 


(a) any mutilated Certificates should be surrendered
to the Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate; and


 


(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of the
Trustees harmless


 


then, in the absence of notice that such Certificate
shall have been acquired by a Protected Purchaser (as such term is used in
section 8-405(a)(1) of the UCC as in effect in the State of Delaware (1994
Rev)), any Regular Trustee on behalf of the Trust shall execute, and, in the
case of any Preferred Security, cause the Institutional Trustee to authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.


 


ARTICLE X


LIMITATION OF LIABILITY
OF HOLDERS OF SECURITIES,


TRUSTEES OR OTHERS


 


SECTION 10.1   Liability.


 


(a) Except as expressly set forth in this Declaration,
the Preferred Securities Guarantee and the terms of the Securities, the Sponsor
shall not be:


 


(i) personally liable for
the return of any portion of the capital contributions (or any return thereon)
of the Holders of the Securities which shall be made solely from assets of the
Trust; and


 


(ii) required to pay to
the Trust or to any Holder of Securities any deficit upon dissolution of the
Trust or otherwise.


 


(b) The Holder of the Common Securities shall be
liable for all of the debts and obligations of the Trust (other than with
respect to the Securities) to the extent not satisfied out of the Trust’s
assets.


 


(c) Pursuant to Section 3803(a) of the Statutory Trust
Act, the Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.


 


SECTION 10.2   Exculpation.


 


(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person’s gross
negligence or willful misconduct with respect to such acts or omissions.


 


(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or


 


30





















 


statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.


 


SECTION 10.3   Fiduciary Duty.


 


(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Institutional Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace such
other duties and liabilities of such Indemnified Person.


 


(b) Unless otherwise
expressly provided herein:


 


(i) whenever a conflict
of interest exists or arises between any Covered Person and any Indemnified
Person; or


 


(ii) whenever this
Declaration or any other agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of Securities, the
Indemnified Person shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or provided
by the Indemnified Person shall not constitute a breach of this Declaration or
any other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.


 


(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:


 


(i) in its “discretion”
or under a grant of similar authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Trust or any other Person; or


 


(ii) in its “good faith”
or under another express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.


 


SECTION 10.4   Indemnification.


 


(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful


 


(ii) The Debenture Issuer
shall indemnify, to the full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a


 


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Company Indemnified Person against expenses (including
attorneys’ fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.


 


(iii) To the extent that
a Company Indemnified Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the settlement of an
action without admission of liability) in defense of any action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a), or
in defense of any claim, issue or matter therein, he shall be indemnified, to
the full extent permitted by law, against expenses (including attorneys’ fees)
actually and reasonably incurred by him in connection therewith.


 


(iv) Any indemnification
under paragraphs (i) and (ii) of this Section 10.4(a) (unless ordered by a
court) shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such determination
shall be made (1) by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to such action, suit
or proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.


 


(v) Expenses (including
attorneys’ fees) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Debenture Issuer as authorized
in this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a quorum of disinterested
Regular Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common Security
Holder of the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder reasonably
determine that such person deliberately breached his duty to the Trust or its
Common or Preferred Security Holders.


 


(vi) The indemnification
and advancement of expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other
rights to which those seeking indemnification and advancement of expenses may
be entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between the
Debenture Issuer and each Company Indemnified Person who serves in such
capacity at any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or obligations
then existing.


 


(vii) The Debenture
Issuer may purchase and maintain insurance on behalf of any person who is or
was a Company Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Debenture Issuer would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a).


 


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(viii) For purposes of
this Section 10.4(a), references to “the Trust” shall include, in addition to
the resulting or surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such constituent
entity as a director, trustee, officer, employee or agent of another entity,
shall stand in the same position under the provisions of this Section 10.4(a)
with respect to the resulting or surviving entity as he would have with respect
to such constituent entity if its separate existence had continued.


 


(ix) The indemnification
and advancement of expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of such a
person.


 


(b) The Sponsor agrees to indemnify (i) the
Institutional Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
“Fiduciary Indemnified Person”) for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration or the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive the
resignation or removal of the Institutional Trustee or the Delaware Trustee,
the satisfaction and discharge of this Declaration and the termination of the
Trust.


 


(c) The Sponsor agrees to pay the Institutional
Trustee and the Delaware Trustee, from time to time, such compensation for all
services rendered by the Institutional Trustee and the Delaware Trustee
hereunder as may be mutually agreed upon in writing by the Sponsor and the
Institutional Trustee or the Delaware Trustee, as the case may be, and except
as otherwise expressly provided herein, to reimburse the Institutional Trustee
and the Delaware Trustee upon its or their request for all reasonable expenses
(including counsel fees and expenses), disbursements and advances incurred or
made by the Institutional Trustee or the Delaware Trustee, as the case may be,
in accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or
bad faith.


 


SECTION 10.5   Outside Businesses.


 


Any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee (subject to Section 5.3(c)) may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment
or other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.


 


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ARTICLE XI


ACCOUNTING


 


SECTION 11.1   Fiscal Year.


 


The fiscal year (“Fiscal Year”) of the Trust shall be
the calendar year, or such other year as is required by the Code.


 


SECTION 11.2   Certain Accounting Matters.


 


(a) At all times during the existence of the Trust,
the Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles of the United States, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes.


 


(b) The Regular Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, within 90 days after the
end of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.


 


(c) The Regular Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.


 


(d) The Regular Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.


 


SECTION 11.3   Banking.


 


The Trust shall maintain one or more bank accounts in
the name and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of the Debentures held by the Institutional
Trustee shall be made directly to the Institutional Trustee Account and no
other funds of the Trust shall be deposited in the Institutional Trustee
Account. The sole signatories for such accounts shall be designated by the
Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.


 


SECTION 11.4   Withholding.


 


The Regular Trustees shall, and shall cause the Trust
to, comply with all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the extent
of, and in fulfilling, its withholding obligations. The Regular Trustees shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.


 


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ARTICLE XII


AMENDMENTS AND MEETINGS


 


SECTION 12.1   Amendments.


 


(a) Except as otherwise provided in this Declaration
or by any applicable terms of the Securities, this Declaration may only be
amended by a written instrument approved and executed by:


 


(i) the Regular Trustees
(or, if there are more than two Regular Trustees a majority of the Regular
Trustees);


 


(ii) if the amendment
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee; and


 


(iii) if the amendment
affects the rights, powers, duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee;


 


(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:


 


(i) unless, in the case
of any proposed amendment, the Institutional Trustee shall have first received
an Officers’ Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);


 


(ii) unless, in the case
of any proposed amendment which affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, the Institutional Trustee shall
have first received:


 


(A) an Officers’
Certificate from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Declaration (including the terms
of the Securities); and


 


(B) an opinion of counsel
(who may be counsel to the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this Declaration (including the
terms of the Securities); and


 


(iii) to the extent the
result of such amendment would be to:


 


(A) cause the trust to
fail to continue to be classified for purposes of United States federal income
taxation as a grantor trust;


 


(B) reduce or otherwise
adversely affect the powers of the Institutional Trustee in contravention of
the Trust Indenture Act; or


 


(C) cause the Trust to be
deemed to be an Investment Company required to be registered under the
Investment Company Act;


 


(c) at such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the
terms of such Securities;


 


(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;


 


(e) Article IV shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the Common
Securities and;


 


(f) the rights of the Holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and


 


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(g) subject to Section 12.1(c), this Declaration may
be amended without the consent of the Holders of the Securities to:


 


(i) cure any ambiguity;


 


(ii) correct or
supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration;


 


(iii) add to the
covenants, restrictions or obligations of the Sponsor;


 


(iv) to conform to any
change in Rule 3a-5 or written change in interpretation or application of Rule
3a-5 by any legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders; and


 


(v) to modify, eliminate
and add to any provision of the Declaration to such extent as may be reasonably
necessary to effectuate any of the foregoing or to otherwise comply with
applicable law.


 


(h) In addition to and notwithstanding any other
provision in this Declaration, without the consent of each affected Holder
(such consent being obtained in accordance with this Declaration), this
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date; (ii) change any of the conversion or redemption provisions; or (iii)
restrict the right of a Holder to institute suit for the enforcement of any
such payment on or after such date.


 


SECTION 12.2   Meetings of the Holders of Securities:
Action by Written Consent.


 


(a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of Securities representing at least 25% in liquidation amount of such
class of Securities. Such direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of Securities
calling a meeting shall specify in writing the Security Certificates held by the
Holders of Securities exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.


 


(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to meetings of
Holders of Securities:


 


(i) notice of any such
meeting shall be given to all the Holders of Securities having a right to vote
thereat at least 7 days but not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not less than
the minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written ballot submitted to the Security Holder
for the purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Regular Trustees;


 


(ii) each Holder of a
Security may authorize any Person to act for it by proxy on all matters in
which a Holder of Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating


 


36





















 


at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Holder of
Securities executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware
corporation;


 


(iii) each meeting of the
Holders of the Securities shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate; and


 


(iv) unless the Statutory
Trust Act, this Declaration, the terms of the Securities, the Trust Indenture
Act or the listing rules of any stock exchange or market on which the Preferred
Securities are then listed or traded, otherwise provides, the Regular Trustees,
in their sole discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of Securities,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.


 


ARTICLE XIII


REPRESENTATIONS OF
INSTITUTIONAL TRUSTEE


AND DELAWARE TRUSTEE


 


SECTION 13.1   Representations and Warranties of
Institutional Trustee.


 


The Trustee that acts as initial Institutional Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Institutional
Trustee’s acceptance of its appointment as Institutional Trustee that:


 


(a) the Institutional Trustee is a New York banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the State of New York, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration;


 


(b) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by all
necessary corporate action on the part of the Institutional Trustee. The
Declaration has been duly executed and delivered by the Institutional Trustee,
and it constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors’ rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement
of such remedies is considered in a proceeding in equity or at law);


 


(c) the execution, delivery and performance of the
Declaration by the Institutional Trustee does not conflict with or constitute a
breach of the Articles of Incorporation or by-laws of the Institutional
Trustee; and


 


(d) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
governing the banking or trust powers of the Institutional Trustee is required
for the execution, delivery or performance by the Institutional Trustee, of the
Declaration.


 


SECTION 13.2   Representations and Warranties of Delaware
Trustee.


 


The Trustee that acts as initial Delaware Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee’s
acceptance of its appointment as Delaware Trustee that:


 


(a) The Delaware Trustee is a national banking
association with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver,


 


37





















 


and to carry out and perform its obligations under the terms of, the
Declaration.


 


(b) The Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors’ rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law).


 


(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
governing the banking or trust powers of the Institutional Trustee is required
for the execution, delivery or performance by the Delaware Trustee of the
Declaration.


 


(d) The Delaware Trustee has its principal place of
business in the State of Delaware.


 


ARTICLE XIV


MISCELLANEOUS


 


SECTION 14.1  Notices.


 


All notices provided for in this Declaration shall be
in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:


 


(a) if given to the Trust, in care of the Regular
Trustees at the Trust’s mailing address set forth below (or such other address
as the Trust may give notice of to the Institutional Trustee, the Delaware
Trustee and the Holders of the Securities):


 


St. Paul Travelers Capital Trust [II] [III] [IV] [V]


c/o The St. Paul Travelers Companies, Inc.


385 Washington Street


St. Paul, Minnesota 
55102


Attention: 
Bruce A. Backberg


With a copy to: 
Treasurer


 


(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):


 


Chase Manhattan Bank USA, National Association


c/o J.P. Morgan Chase


500 Stanton Christiana Road, Fl 3 / OPS4


Newark, Delaware 19713 Attention:  Institutional Trust Services


 


(c) if given to the Institutional Trustee, at its
Corporate Trust Office (or such other address as the Institutional Trustee may
give notice of to the Holders of the Securities):


 


JPMorgan Chase Bank, N.A.


4 New York Plaza


New York, New York 10004-2413


Attention: 
Institutional Trust Services


 


(d) if given to the Holder of the Common Securities,
at the mailing address of the Sponsor set forth below (or such other address as
the Holder of the Common Securities may give notice of to the Trust):


 


The St. Paul Travelers Companies, Inc.


385 Washington Street


St. Paul, Minnesota 
55102


 


38





















 


Attention: Bruce A. Backberg


With a copy to: 
Treasurer


 


(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.


 


All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.


 


SECTION 14.2   Governing Law.


 


This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such
laws without regard to principles of conflict of laws.


 


SECTION 14.3   Intention of the Parties.


 


It is the intention of the parties hereto that the
Trust be classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further this
intention of the parties.


 


SECTION 14.4   Headings.


 


Headings contained in this Declaration are inserted
for convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof


 


SECTION 14.5   Successors and Assigns.


 


Whenever in this Declaration any of the parties hereto
is named or referred to, the successors and assigns of such party shall be
deemed to be included, and all covenants and agreements in this Declaration by
the Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.


 


SECTION 14.6   Partial Enforceability.


 


If any provision of this Declaration, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Declaration, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.


 


SECTION 14.7  Counterparts.


 


This Declaration may contain more than one counterpart
of the signature page and this Declaration may be executed by the affixing of
the signature of each of the parties hereto to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.


 


IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above written.


 


	
   

  	
   

  	
   

  
	
   

  	
  [            ],
  as Regular Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bruce A. Backberg, as Regular Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHASE MANHATTAN BANK USA, NATIONAL

  	
   

  
	
   

  	
  ASSOCIATION, as Delaware Trustee

  	
   

  



 


39





















 


	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  [            ]

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  [            ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK, N.A., as Institutional

  	
   

  	
   

  
	
   

  	
   

  	
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  [            ]

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  [            ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE ST. PAUL TRAVELERS COMPANIES, INC., as

  Sponsor and Debenture Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Bruce A. Backberg

  	
   

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  	
   

  	
   

  



 


40





















 


ANNEX I


TERMS OF


[ ]% TRUST PREFERRED
SECURITIES


[ ]% TRUST COMMON
SECURITIES


 


Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of [         ,
200  ] (as amended from time to time, the “Declaration”), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):


 


1.  Designation
and Number.


 


(a) Preferred Securities. [            
(         )] Preferred Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of [         ]
dollars [($         )] and a
liquidation amount with respect to the assets of the Trust of [$ ] per
preferred security, are hereby designated for the purposes of identification
only as “[ ]% Trust Preferred Securities” (the “Preferred Securities”). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on which
the Preferred Securities are listed.


 


(b) Common Securities. [            
(         )] Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [         ]
dollars [($         )] and
a liquidation amount with respect to the assets of the Trust of [$ ] per common
security, are hereby designated for the purposes of identification only as “[
]% Trust Common Securities” (the “Common Securities”). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice.


 


2.  Distributions.


 


(a) Distributions payable on each Security will be
fixed at a rate per annum of [ ]% (the “Coupon Rate”) of the stated liquidation
amount of [$ ] per Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears beyond the first date such Distributions are payable (or would be
payable if not for any Extension Period (as defined below) or default by the
Debenture Issuer on the Debentures) will bear interest thereon at the Coupon
Rate compounded quarterly (to the extent permitted by applicable law) from the
relevant payment date for such Distribution. The term “Distributions” as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and to
the extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year consisting of twelve 30-day
months. Distributions payable for any period shorter than a full quarterly
Distribution period for which Distributions are computed will be computed on
the basis of a 30-day month and, for periods of less than one month, the actual
number of days elapsed during such month.


 


(b) Distributions on the Securities will be
cumulative, will accrue from and including [        ,
200  ], and will be payable quarterly in arrears, on [          ],
[         ], [         ]
and [         ] of each
year, commencing on [         ,
200  ]. When, as and if available for payment, Distributions
will be made by the Institutional Trustee, except as otherwise described below.
The Debenture Issuer has the right under the Indenture to defer payments of
interest on the Debentures by extending each interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive quarterly
periods (each an “Extension Period”), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
may extend beyond the date of maturity or prepayment of the Debentures. As a
consequence of the Debenture Issuer’s extension of the interest payment period,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon


 


41





















 


Rate compounded quarterly (to the extent permitted by applicable law)
from the relevant payment date for such Distribution during any such Extension
Period. In the event that the Debenture Issuer exercises its right to extend
the interest payment period, then (a) the Debenture Issuer shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than
(i) repurchases, redemptions or other acquisitions of shares of capital stock
of St. Paul Travelers in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of employees, officers,
directors or consultants, (ii) repurchases, redemptions or other acquisitions
of shares of capital stock of St. Paul Travelers or such subsidiary as a result
of an exchange or conversion of any class or series of capital stock of St.
Paul Travelers for any other class or series of the capital stock of St. Paul
Travelers or such subsidiary’s, (iii) the purchase of fractional interests in
shares of capital stock of St. Paul Travelers pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, or (iv) distributions of rights under any shareholders’ rights plan
adopted by St. Paul Travelers or such subsidiary) and (b) the Debenture Issuer
shall not make any payment of interest on or principal of (or premium, if any, on),
or repay, repurchase or redeem, any debt securities issued by the Debenture
Issuer or its subsidiaries that rank pari passu with or junior to the
Debentures. The foregoing, however, will not apply to any stock dividends paid
by St. Paul Travelers where the dividend stock is the same stock as that on
which the dividend is being paid. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period, together with all such previous
and further extensions thereof, may not exceed 20 quarterly periods; provided,
further, that no Extension Period may extend beyond the maturity of the
Debentures. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above requirements. The Regular
Trustees will give notice to each Holder of any Extension Period upon their
receipt of notice thereof from the Debenture Issuer.


 


(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust at the
close of business on the relevant record dates. While the Preferred Securities
remain in book-entry only form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment dates shall correspond to
the interest payment dates on the Debentures. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment in
respect of the Preferred Securities will be made as described under the heading
“Book-Entry Issuance” in the Prospectus, dated [         ,
200  ] (the “Prospectus”), of the Trust included in the
Registration Statement on Form S-3 of the Sponsor and the Trust. The relevant
record dates for the Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least 14 days but no more than 60 days before the relevant payment
dates, which payment dates shall correspond to the interest payment dates on
the Debentures. Distributions payable on any Securities that are not punctually
paid on any Distribution payment date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures (other than while an
Extension Period shall be continuing), will cease to be payable to the Person
in whose name such Securities are registered on the relevant record date, and
such defaulted Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such Distribution payment date.


 


(d) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders of
the Securities.


 


3.  Liquidation
Distribution Upon Dissolution.


 


In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Trust, the Holders of the
Securities on the date of the liquidation, dissolution or winding-up, as the
case may be, will be entitled to receive out of the assets of the Trust
available for distribution to Holders of Securities after satisfaction of
liabilities of


 


42





















 


creditors, distributions in an amount equal to the aggregate of the
stated liquidation amount of [$ ] per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
“Liquidation Distribution”), unless, in connection with such liquidation, dissolution,
or winding-up, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate equal to the
Coupon Rate, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, such Securities outstanding at such time,
have been distributed on a Pro Rata basis to the Holders of the Securities in
exchange for such Securities.


 


If, upon any such liquidation, dissolution, or
winding-up the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis, as such term is defined in
Section 8 below.


 


4.  Redemption
and Distribution.


 


(a) Upon the repayment of the Debentures in whole or
in part, whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
equal to the proceeds from such repayment or redemption of the Debentures (the
“Redemption Price”). Holders shall be given not less than 30 nor more than 60
days notice of such redemption.


 


(b) If fewer than all the outstanding Securities are
to be so redeemed, the Securities will be redeemed Pro Rata and the Preferred
Securities to be redeemed will be as described in Section 4(h)(ii) below.


 


(c) The Debenture Issuer shall have the right, at any
time, to dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Institutional Trustee, having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate, and with accrued and unpaid interest equal
to accrued and unpaid Distributions on, the Securities outstanding at such
time, to be distributed to the Holders of the Securities in liquidation of such
Holders’ interests in the Trust on a Pro Rata basis.


 


(d) The Debenture Issuer shall have the right (subject
to the conditions set forth in the Indenture) to elect to prepay the
Debentures, in whole or in part, at any time on or after [        ,
200  ] (the “Initial Optional Redemption Date”), and,
simultaneous with such prepayment, to cause a Like Amount (as defined below) of
the Debentures to be redeemed by the Trust at the Optional Redemption Price on
a Pro Rata basis.


 


“Like Amount” means, with respect to a redemption of
the Securities, Securities having a stated liquidation amount equal to the
principal amount of Debentures to be paid in accordance with their terms.


 


“Optional Redemption Price” means an amount equal to
100% of the stated liquidation amount of the Securities to be redeemed by the
Trust plus accumulated and unpaid Distributions thereon, if any to the date of
such redemption.


 


(e) The Debenture Issuer shall have the right, upon
not less than 30 nor more than 60 days notice, to redeem the Debentures, in
whole but not in part, for cash within 90 days following the occurrence of a
Tax Event or an Investment Company Event (each as defined below, and each a
“Special Event”), and, following such redemption, Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata
basis.


 


“Tax Event” means that the Regular Trustees shall have
received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a “Tax Event Opinion”) to the effect that, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, or (b) as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of the original issuance of the Securities there is more than an insubstantial risk
that (i) the Trust is, or will be within 90


 


43





















 


days of the date of such opinion, subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
the Trust is, or, within 90 days of the date of such opinion, will be subject
to more than a de minimis amount of other taxes, duties or other governmental
charges, or (iii) interest payable to the Trust on the Debentures is not or
will not, within 90 days of the date of such opinion, be deductible, in whole
or in part, by the Debenture Issuer for United States federal income tax
purposes.


 


“Investment Company Event” means that the Regular
Trustees shall have received an opinion of a nationally recognized independent
counsel experienced in practice under the Investment Company Act (an
“Investment Company Event Opinion”) to the effect that, as a result of (a) an
amendment to or a change (including any announced prospective change) in law or
regulation of the United States or any rules, guidelines or policies of any
applicable regulatory authority for the Debenture Issuer, or (b) as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of the
original issuance of the Securities (a “Change in 1940 Act Law”), there is a
more than an insubstantial risk that the Trust is or will be considered, within
90 days of the date of such opinion, an Investment Company which is required to
be registered under the Investment Company Act.


 


On and from the date fixed by the Regular Trustees for
any distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing Preferred Securities held by DTC or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid Distributions
on such Securities until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.


 


(f) The Trust may not redeem fewer than all the
outstanding Securities unless all accrued and unpaid Distributions have been
paid on all Securities for all quarterly Distribution periods terminating on or
before the date of redemption.


 


(g) If the Debentures are distributed to Holders of
the Securities, pursuant to the terms of the Indenture, the Debenture Issuer
will use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.


 


(h)  Redemption
or Distribution procedures will be as follows:


 


(i) Notice of any
redemption of, or notice of distribution of Debentures in exchange for the
Securities (a “Redemption/Distribution Notice”) will be given by the Trust by
mail to each Holder of Securities to be redeemed or exchanged not fewer than 30
nor more than 60 days before the date fixed for redemption or exchange thereof
which, in the case of a redemption, will be the date fixed for redemption of
the Debentures. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
4(h)(i), a Redemption/ Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be addressed
to the Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the Redemption/ Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.


 


(ii) In the event that
fewer than all the outstanding Securities are to be redeemed, the Securities to
be redeemed shall be redeemed Pro Rata from each Holder of Preferred
Securities, it being understood that, in respect of Preferred Securities
registered in the name of and held of record by DTC or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distribution of
the proceeds of such redemption will be made to each Clearing Agency
Participant (or Person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.


 


44





















 


(iii) If Securities are
to be redeemed and the Trust gives a Redemption/Distribution Notice, which
notice may only be issued if the Debentures are redeemed as set out in this
Section 4 (which notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date,
provided, that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will deposit irrevocably with DTC
or its nominee (or successor Clearing Agency or its nominee) funds sufficient
to pay the applicable Redemption Price with respect to the Preferred Securities
and will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Preferred Security Beneficial
Owners, and (B) with respect to Preferred Securities issued in definitive form
and Common Securities, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or on
the redemption date, as applicable, Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the Holders
of such Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Securities
that have been so called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If payment of
the Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Institutional Trustee or by the Sponsor as
guarantor pursuant to the Preferred Securities Guarantee, Distributions on such
Securities will continue to accrue from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.


 


(iv)
Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf
of the Trust to (A) in respect of the Preferred Securities, DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if Definitive Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common Securities to
the Holder thereof.


 


(v) Subject to the
foregoing and applicable law (including, without limitation, United States
federal securities laws), the Debenture Issuer or its affiliates may at any
time and from time to time purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.


 


5.  Voting
Rights - Preferred Securities.


 


(a) Except as provided under Sections 5(b) and 7 and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.


 


(b) Subject to the requirements set forth in this
paragraph, the Holders of a Majority in aggregate liquidation amount of the
Preferred Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including the right to
direct the Institutional Trustee, as holder of the Debentures, to (i) direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or exercise any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past Event of
Default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall
be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required, provided, however, that, where a consent or action under the
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Debentures affected thereby (a “Super
Majority”), the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super
Majority represents of the


 


45





















 


aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Except with
respect to directing the time, method and place of conducting a proceeding for
a remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Debentures, shall not take any of the actions described in
clauses (i), (ii), (iii) or (iv) above unless the Institutional Trustee has
obtained, at the expense of the Holder of Common Securities, an opinion of a
nationally recognized independent tax counsel experienced in such matters to
the effect that as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes. If
the Institutional Trustee fails to enforce its rights under the Declaration,
(other than by reason of the failure to obtain the opinion set forth in the
previous sentence) any Holder of Preferred Securities may, to the fullest
extent permitted by law, directly institute a legal proceeding against the
Debenture Issuer to enforce the Institutional Trustee’s rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person. If a Declaration Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Preferred Securities may also
directly institute a proceeding for enforcement of payment to such Holder (a
“Direct Action”) of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee’s rights under the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy available
to the Holders of the Debentures. In connection with such Direct Action, St.
Paul Travelers will be subrogated to the rights of such Holder of Preferred
Securities under the Declaration to the extent of any payment made by St. Paul
Travelers to such Holder of Preferred Securities in such Direct Action.


 


(c) Any required approval or direction of Holders of
Preferred Securities may be given at a separate meeting of Holders of Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular Trustees
or, at their election, the Institutional Trustee, will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.


 


No vote or consent of the Holders of the Preferred
Securities will be required for the Trust to redeem and cancel Preferred
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.


 


Notwithstanding that Holders of Preferred Securities
are entitled to vote or consent under any of the circumstances described above,
any of the Preferred Securities that are owned by the Sponsor or any Affiliate
of the Sponsor shall not be entitled to vote or consent and shall, for purposes
of such vote or consent, be treated as if they were not outstanding.


 


6.  Voting
Rights - Common Securities.


 


(a) Except as provided under Sections 6(b), (c) and 7
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.


 


(b) The Holders of the Common Securities are entitled,
in accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.


 


Subject to Section 2.6 of the Declaration and only
after the Event of Default with respect to the Preferred Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority in
aggregate liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any


 


46





















 


remedy available to the Institutional Trustee, or direct the exercise
of any trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waiving any past default and its consequences that is waivable
under the Indenture, or (iii) exercising any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
provided that, where a consent or action under the Indenture would require the
consent or act of Super Majority, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Pursuant to this Section 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Other than with respect to
directing the time, method and place of conducting any proceeding for any
remedy available to the Institutional Trustee or the Debenture Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this
paragraph unless the Institutional Trustee has obtained, at the expense of the
Holder of Common Securities, an opinion of tax counsel to the effect that for
the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee’s rights under the Declaration
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.


 


Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to
vote to be mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the date of such meeting,
(ii) a description of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote and (iii) instructions for the delivery
of proxies.


 


No vote or consent of the Holders of the Common
Securities will be required for the Trust to redeem and cancel Common
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.


 


7.  Amendments
to Declaration and Indenture.


 


(a) In addition to any requirements under Section 12.1
of the Declaration, if any proposed amendment to the Declaration provides for,
or the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.


 


(b) In the event the consent of the Institutional
Trustee as the holder of the Debentures is required under the Indenture with
respect to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written direction of
the Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where a consent
under the Indenture would require the consent of the holders of greater than a majority
in aggregate principal amount of the Debentures (a “Super Majority”, as defined
in Section 5(b)), the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of
the Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained, at the expense of the Holder of Common
Securities, an opinion of tax counsel to the effect that


 


47





















 


for the purposes of United States federal income tax the Trust will not
be classified as other than a grantor trust on account of such action.


 


8.  Pro
Rata.


 


A reference in these terms of the Securities to any
payment, distribution or treatment as being “Pro Rata” shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Preferred Securities pro rata according to the aggregate liquidation amount
of Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.


 


9.  Ranking.


 


The Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where an
Event of Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.


 


10.  Listing.


 


The Regular Trustees shall use their reasonable best
efforts to cause the Preferred Securities to be listed on the New York Stock
Exchange, Inc.


 


11.  Acceptance
of Securities Guarantee and Indenture.


 


Each Holder of Preferred Securities and Common
Securities, by the acceptance thereof, agrees to the provisions of the
Preferred Securities Guarantee, including the subordination provisions therein
and to the provisions of the Indenture.


 


12.  No
Preemptive Rights.


 


The Holders of the Securities shall have no preemptive
or similar rights to subscribe for any additional securities.


 


13.  Miscellaneous.


 


These terms constitute a part of the Declaration.


 


The Sponsor will provide a copy of any one or more of
the Declaration, the Preferred Securities Guarantee and the Indenture to a
Holder without charge on written request to the Sponsor at its principal place
of business.


 


48





















 


EXHIBIT A-1  FORM
OF PREFERRED SECURITY CERTIFICATE


 


[IF THE PREFERRED SECURITY IS TO BE A GLOBAL
CERTIFICATE INSERT —THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE
MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITARY”) OR A NOMINEE OF THE
DEPOSITARY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.


 


UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]


 


	
  Certificate Number

  	
   

  	
   

  
	
  Number of Preferred Securities

  	
   

  	
   

  
	
   

  
	
  CUSIP No. 

  	
   

  	
   

  
	
   

  
	
  Certificate Evidencing Preferred Securities of

  
	
   

  
	
  ST. PAUL TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]

  
	
   

  
	
  [ ]% Trust Preferred Securities (Liquidation Amount
  [$] per Preferred Security)

  
							



 


ST. PAUL TRAVELERS CAPITAL TRUST [II] [III] [IV] [V],
a statutory trust created under the laws of the State of Delaware (the
“Trust”), hereby certifies that Cede & Co. (the “Holder”) is the registered
owner of [                        ]
preferred securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust designated the [ ]% Trust Preferred
Securities (the “Preferred Securities”). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in,
and this certificate and the Preferred Securities represented hereby are issued
and shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of [          ,
200  ] as the same may be amended from time to time (the
“Declaration”), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.


 


The Holder of this certificate, by accepting this
certificate, is deemed to have (i) agreed to the terms of the Indenture and the
Debentures, including that the Debentures are subordinate and junior in right
of payment to all Senior Indebtedness (as defined in the Indenture) and (ii)
agreed to the terms of the Preferred Securities Guarantee, including that the
Preferred Securities Guarantee is (A) subordinate and junior in right of
payment to all Senior Indebtedness (as defined in the Indenture) of St. Paul
Travelers, (B) pari passu with the most senior preferred or preference stock
now or hereafter issued by St. Paul Travelers and with any guarantee now or
hereafter issued by The St. Paul Travelers Companies with respect to preferred
or preference stock of St. Paul Travelers affiliates and (C) senior to St. Paul
Travelers common stock.


 


Upon receipt of this certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.


 


49





















 


By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.


 


IN WITNESS WHEREOF, the Trust has executed this
certificate this [    ] day of [        ,
200  ].


 


	
   

  	
  ST. PAUL TRAVELERS CAPITAL TRUST [II]

  [III] [IV] [V]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Bruce A. Backberg

  
	
   

  	
  Title: Regular Trustee

  



 


50





















 


INSTITUTIONAL TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of the Preferred Securities referred to in
the within-mentioned Declaration.


 


	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized Officer

  



 


51





















 


[FORM OF REVERSE OF
SECURITY]


 


Distributions payable on each Preferred Security will
be fixed at a rate per annum of [ ]% (the “Coupon Rate”) of the stated
liquidation amount of [$ ] per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon at the Coupon Rate
compounded quarterly (to the extent permitted by applicable law). The term
“Distributions” as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year consisting of twelve 30-day months. Distributions payable for any period
of less than a full quarterly period will be computed on the basis of a 30-day
month and, for periods of less than one month, the actual number of elapsed
days per 30-day month.


 


Distributions on the Preferred Securities will be
cumulative, will accrue from the date of original issuance and will be payable
quarterly in arrears, on the following dates, which dates correspond to the
interest payment dates on the Debentures: [         ],
[         ], [        ]
and [        ] of each year,
commencing on [       , 200  ],
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
quarterly periods (each an “Extension Period”) and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 quarterly periods or extend beyond the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.


 


The Preferred Securities shall be redeemable as
provided in the Declaration.


 


52





















 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned assigns and
transfers this Preferred Security Certificate to:


 


 


	
   

  
	
  (Insert assignee’s social security or tax
  identification number)

  
	
   

  
	
   

  
	
  (Insert address and zip
  code of assignee) and irrevocably appoints

  



 


 


agent to transfer this Preferred Security Certificate
on the books of the Trust.  The agent may
substitute another to act for him or her.


 


	
  Date:

  	
   

  	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side
  of this Preferred Security Certificate)

  
					



 


53





















 


EXHIBIT A-2


 


FORM OF COMMON SECURITY
CERTIFICATE


 


TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE DECLARATION REFERRED
TO BELOW


 


	
  Certificate Number 

  	
   

  	
   

  
	
   

  
	
  Number of Common Securities 

  	
   

  	
   

  
	
   

  
	
  Certificate Evidencing Common Securities of 

  	
   

  	
   

  
							



 


ST. PAUL TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]


 


[ ]% Trust Common
Securities (Liquidation Amount [$ ] per Common Security)


 


ST. PAUL TRAVELERS CAPITAL TRUST [II] [III] [IV] [V],
a statutory trust created under the laws of the State of Delaware (the
“Trust”), hereby certifies that The St. Paul Travelers Companies, Inc., a
Minnesota corporation, (the “Holder”) is the registered owner of [ ] common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the [ ]% Trust Common Securities (the “Common
Securities”). The Common Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of
this certificate duly endorsed and in proper form for transfer and satisfaction
of the other conditions set forth in the Declaration (as defined below),
including, without limitation, Section 9.1 thereof. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of [           ,
200  ], as the same may be amended from time to time (the
“Declaration”), including the designation of the terms of the Common Securities
as set forth in Annex I thereto. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Sponsor will provide
a copy of the Declaration and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.


 


Upon receipt of this certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.


 


The Holder of this certificate, by accepting this
certificate, is deemed to have agreed to the terms of the Indenture and the
Debentures, including that the Debentures are subordinate and junior in right
of payment to all Senior Indebtedness (as defined in the Indenture) as and to
the extent provided in the Indenture.


 


By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.


 


IN WITNESS WHEREOF, the Trust has executed this
certificate this [    ] day of [           ,
200  ].


 


	
   

  	
  ST. PAUL TRAVELERS CAPITAL TRUST

  [II] [III] [IV] [V]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Bruce A. Backberg

  
	
   

  	
  Title: Regular Trustee

  



 


54





















 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned assigns and
transfers this Common Security Certificate to:


 


 


	
   

  
	
  (Insert assignee’s social security or tax
  identification number)

  
	
   

  
	
   

  
	
  (Insert address and zip code of assignee) and
  irrevocably appoints

  



 


 


 


agent to transfer this Common Security Certificate on
the books of the Trust.  The agent may
substitute another to act for him or her.


 


	
  Date:

  	
   

  	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side
  of this Common Security Certificate)

  
					



 


55