Exhibit 10.1
ALLSTATE LIFE INSURANCE COMPANY
FUNDING AGREEMENT
FA-41092
ALLSTATE LIFE INSURANCE COMPANY, an Illinois insurance company ("Allstate
Life"), agrees to establish a Funding Account as specified in this agreement
(this "Agreement") for Allstate Life Global Funding, (the "Owner", which term
shall include its permissible successors and assignees).
This Agreement is issued pursuant to an application (the "Application") by the
Owner, a copy of which is attached to and made a part of this Agreement.
This Agreement is issued in and is subject to the laws of the State of Illinois.
This Agreement is executed by Allstate Life at its principal offices located at
Northbrook, Illinois on April 12, 2006, to take effect as of such date (the
"Effective Date").
1. Deposit Amounts
Allstate Life agrees to accept, and the Owner agrees to pay or cause to be
paid to Allstate Life, on the Effective Date the amount (the "Deposit
Amount") identified in the Funding Agreement Pricing Annex ("Annex")
attached hereto.
2. Funding Account
Upon receipt of the Deposit Amount, Allstate Life will establish an account
in the name of the Owner on its books and records (the "Funding Account")
and credit such account with an amount equal to the Principal Amount (as
identified in the Annex). Allstate Life is neither a trustee nor a
fiduciary with respect to the Funding Account. All assets credited to the
Funding Account shall be the exclusive property of Allstate Life and
Allstate Life shall have the sole rights to control, manage and administer
such assets. Allstate Life may commingle such assets with its other general
account assets.
Allstate Life shall calculate and credit interest to the Funding Account in
accordance with the terms set forth in the Annex. At the end of any day,
the balance of the Funding Account (the "Funding Account Balance") shall be
equal to the Principal Amount, plus any accrued interest, less any amounts
previously withdrawn pursuant to the terms hereof.
3. Entire Agreement
This Agreement (including the Annex) and the Application constitute the
entire contract between Allstate Life and the Owner with respect to the
subject matter hereof except for additional terms, if any, regarding any
transfers or assignments hereof made in accordance with Section 5.
4. Representations and Warranties
Each party hereto represents and warrants to the other that as of the date
hereof:
(i) it has the power to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) this Agreement has been duly authorized, executed and delivered by the
representing party;
(iii) assuming the due authorization, execution and delivery of this
Agreement by the other party, this Agreement constitutes a legal,
valid and binding obligation of the representing party; and
(iv) this Agreement is enforceable in accordance with the terms hereof,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and subject as to enforceability to
general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
It is understood and agreed that Allstate Life makes no representation or
warranty as to:
(i) the eligibility of the Owner to enter into or own this Agreement;
(ii) any other matter regarding the Owner or any depositor, trustor, agent
or holder of any interest, instrument or security of the Owner; or
(iii) whether any payment made under this Agreement will be subject to
withholding, deduction or reduction as a result of any tax or similar
law or regulation.
In performing its obligations hereunder, Allstate Life is not acting as a
fiduciary, agent or other representative of the Owner or anyone else. All
representations and warranties made by the Owner and Allstate Life in this
Agreement shall be considered to have been relied upon by the other and
shall survive the execution hereof.
5. Assignment of Agreement
This Agreement may not be transferred or assigned by the Owner without the
express written consent of Allstate Life. Allstate Life shall maintain a
record of the ownership of this Agreement as part of its books and records.
Notwithstanding anything in this Agreement to the contrary, no transfer or
assignment of an interest in this Agreement or any right to receive
payments under this Agreement shall be effective until Allstate Life shall
have affirmed in writing to the new Owner or a financial institution
holding this Agreement on behalf of the new Owner that it has changed its
books and records to reflect such transfer or assignment of an interest in
this Agreement or any right to receive payments hereunder. Allstate Life
covenants, and the Owner agrees, that Allstate Life will effect all
transfers and assignments of this Agreement only through a book entry
system maintained by Allstate Life within the meaning of Treasury
Regulation Section 1.871-14 (c)(1)(i).
6. Tax Treatment
Allstate Life and the Owner agree that this Agreement shall be disregarded
for United States federal income tax purposes. Allstate Life and the Owner
further agree that if this Agreement is not so disregarded, it will and is
intended to be treated as a debt obligation of Allstate Life issued in
registered form within the meaning of Treasury Regulation Section
1.871-14(c)(1)(i).
7. Notice Required
Any notice, directive, certificate or other writing required by the
provisions of this Agreement to be delivered to Allstate Life shall be
delivered in writing by prepaid first class mail or courier or facsimile
transmission to its principal office at Allstate Life Insurance Company,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: J2A. Any notice,
directive, certificate or other writing required under this Agreement to be
delivered to the Owner shall be delivered in writing by prepaid first class
mail or courier or facsimile transmission to the Owner at its principal
place of business. Unless otherwise specified in this Agreement, any notice
is effective when received.
8. Authority to Bind Allstate Life
No agent has authority to change, modify or add to this Agreement or to
waive any of its provisions. No change, modification, addition to, or
waiver of any provision of this Agreement shall be valid as against
Allstate Life unless evidenced by written modification or amendment hereto
signed on behalf of Allstate Life by the President and Secretary of
Allstate Life.
9. Amendment and Modification
This Agreement may be amended or modified with respect to any provision at
any time and from time to time by written agreement between the Owner and
Allstate Life. No such amendment or modification shall require the consent
of any other person.
10. Payments to the Owner
Allstate Life shall withdraw from the Funding Account and pay to or at the
direction of the Owner amounts in accordance with the terms set forth in
the Annex hereto.
All payments made by Allstate Life to the Owner hereunder shall be paid in
cash, in same-day, freely transferable funds on the date of payment to such
account as has been specified for such purpose in writing by the Owner to
Allstate Life.
11. Additional Amounts.
(i) All payments due to be made by Allstate Life to the Owner under the
terms of this Agreement will be made without any withholding or deduction
for or on account of any present or future taxes, duties, levies,
assessments or governmental charges of whatever nature imposed or levied by
or on behalf of any governmental authority in the United States having the
power to tax, unless such withholding or deduction is required by law.
12. Termination of Agreement
(a) This Agreement shall terminate and cease to be of any further force or
effect at the close of the first day upon which Allstate Life and the Owner
have completed all of the duties and obligations which have arisen under
this Agreement.
(b) Each of the following events shall constitute an "Event of Default"
under this Agreement:
(i) default in the payment when due and payable of any Principal
Amount; or
(ii) default in the payment of any interest accrued with respect to
the Funding Account Balance pursuant to the provisions of this
Agreement when such amounts become due and payable, and
continuance of such default for a period of five Business Days;
or
(iii) Allstate Life fails, is unable, or Allstate Life admits in
writing its inability, generally to pay its debts as such debts
become due; or the Board of Directors of Allstate Life adopts any
action to approve or for the purpose of effecting any of the
actions referred to in this paragraph (iii); or
(iv) default in the performance or breach of any one or more of the
other covenants of Allstate Life herein, and continuance of such
default or breach for a period of 45 days after there has been
given notice thereof to Allstate Life; or
(v) a court having jurisdiction in the premises has entered a decree
or order for relief in respect of Allstate Life in an involuntary
case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect of the United States of America or
any other applicable jurisdiction which decree or order is not
stayed; or any other similar relief has been granted under any
applicable law; or
(vi) an insolvency case has been commenced against Allstate Life under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect in the United States of America or any other
applicable jurisdiction and such case shall not have been
dismissed or stayed, in each case within 45 days, or a decree or
order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, rehabilitator,
conservator, sequestrator, trustee, custodian or other officer
having similar powers over Allstate Life, or over all or a
substantial part of its property, has been entered; or there has
occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Allstate Life, for all or a
substantial part of its property; or a court having jurisdiction
in the premises has entered a decree or order declaring the
dissolution of Allstate Life; or a warrant of attachment,
execution or similar process has been issued against any
substantial part of the property of Allstate Life; or
(vii) the Director of the Illinois Department of Insurance or any
other insurance supervisor having jurisdiction over Allstate Life
shall have issued any order under the Illinois Insurance Code or
other applicable insurance law to rehabilitate, liquidate, or
conserve the assets of, or take other similar action with respect
to, Allstate Life; or
(viii) Allstate Life commences a voluntary case or other proceeding
seeking liquidation, dissolution, reorganization or other relief with
respect to itself or its debts under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect in the
United States of America (or any state thereof) or any other
applicable jurisdiction, or seeking the appointment of a receiver,
liquidator, rehabilitator, sequestrator, conservator or other similar
officer of Allstate Life or any substantial part of its property, or
consents to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under
any such law, or consents to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a substantial
part of its property; or Allstate Life makes any general assignment
for the benefit of creditors.
If one or more Events of Default shall have occurred and be continuing
(other than an Event of Default specified in any of clause (iii) through
(viii) above), the Owner may, by written notice to Allstate Life, declare
the Funding Account Balance to be due and payable and such amounts shall
become due and payable on the date the written declaration is given to
Allstate Life; provided that if an Event of Default specified in any of
clauses (iii) through (viii) above occurs, the Funding Account Balance will
be automatically and immediately due and payable without any declaration or
other act on the part of the Owner; provided that, without affecting the
obligation of Allstate Life to repay such amounts, no such repayment shall
be made in preference to other policyholders of Allstate Life.
Allstate Life will forthwith notify the Owner of the occurrence of any
Event of Default.
Upon the payment to the Owner of the Funding Account Balance, this
Agreement shall terminate.
13. Supplemental Agreements
Within six months of the date of issue of this Agreement, Allstate Life may
issue to the initial Owner of this Agreement one or more additional funding
agreements and may provide in any such additional funding agreement that
such additional funding agreement shall constitute part of the same
obligation of Allstate Life as this Agreement (any such additional funding
agreement, a "Supplemental Agreement"), and such Supplemental Agreement
shall be subject to the same terms and conditions as this Agreement
(including those set forth in the Funding Agreement Pricing Annex), except
that the Effective Date, the Deposit Amount, the Principal Amount and the
amount of the first interest payment, if any, may be different with respect
to such Supplemental Agreement; provided that the issuance of such
Supplemental Agreement will satisfy the conditions of Treasury Regulation
Section 1.1275-2(k)(2)(ii) and will constitute a "Qualified Reopening"
under Treasury Regulation Section 1.1275-2(k)(3)(ii) without regard to
subparagraph (A) thereof.
ALLSTATE LIFE GLOBAL FUNDING* ALLSTATE LIFE INSURANCE COMPANY
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------- ---------------------------------------------------------
Owner ▇▇▇▇▇ ▇. ▇▇▇▇▇
President
*By: Wilmington Trust Company, not in its
individual capacity but solely as
Delaware Trustee and, as such, the agreements,
representations and warranties
made by the Owner hereunder shall be binding
only upon the Owner and Wilmington
Trust Company shall incur no personal liability
in connection with any
such agreements, representations or warranties
of the Owner.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------- ---------------------------------------------------------
Signature ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President, General Counsel and Secretary
Vice President
-------------------------------------------------
Title
This Agreement is executed on behalf of Allstate Life
Insurance Company at Northbrook, Illinois.
April 12, 2006
-------------------------------------------------
Date
ALLSTATE LIFE INSURANCE COMPANY
FUNDING AGREEMENT PRICING ANNEX
THE SPECIFICATIONS HEREIN APPLY ONLY TO THIS ANNEX:
Owner of Funding Agreement: Allstate Life Global Funding, its Successors or Assignees
Agreement No.: FA-41092
Effective Date: April 12, 2006
Agreement Period: This Agreement shall be in effect from the Effective Date until
the Initial Maturity Date (as defined below), or, if such day is
not a Business Day, the immediately preceding Business Day, unless
such date is extended with respect to all or a portion of the
Principal Amount on the initial Funding Agreement Election Date (as
defined below) in accordance with the procedures described below.
In no event will the maturity of this Agreement be extended beyond
the Maturity Date (as defined below).
During the notice period for each Funding Agreement Election Date (as
defined below), the Owner may elect to extend the maturity of this Agreement
with respect to all or any portion of the Principal Amount equal to $1,000
and integral multiples of $1,000 in excess thereof so that the maturity of
this Agreement with respect to the entire Principal Amount or such
portion thereof will be extended to the date occurring 366 calendar days
from, and including, the 4th day of the month immediately following such
Funding Agreement Election Date. However, if that 366th calendar day is
not a Business Day, the maturity of this Agreement with respect to the
entire Principal Amount or such portion thereof will be extended to
the immediately preceding Business Day.
To make the Owner's election effective on any Funding Agreement Election
Date, the Owner must deliver to Allstate Life a notice of election
(each, a "Funding Agreement Election Notice") during the notice period for
that Funding Agreement Election Date. The notice period for each Funding
Agreement Election Date will begin on the fifth Business Day prior to the
Funding Agreement Election Date and end on the Funding Agreement Election
Date; provided, however, that if the Funding Agreement Election Date is not
a Business Day, the notice period will be extended to the next day that is a
Business Day. The Owner's Funding Agreement Election Notice must be
delivered to Allstate Life no later than 6:00 p.m., New York City time, on
the Funding Agreement Election Date. Upon delivery to Allstate Life of a
Funding Agreement Election Notice to extend the maturity of this Agreement
with respect to all or any portion of the Principal Amount equal to $1,000
and integral multiples of $1,000 in excess thereof during a notice period,
that election will be revocable during each day of such notice period, until
12:00 p.m., New York City time, on the last Business Day in such notice
period, at which time such Funding Agreement Election Notice will become
irrevocable.
If the Owner of this Agreement does not make an election to extend the
maturity of this Agreement with respect to all or any portion of the
Principal Amount equal to $1,000 or any multiple of $1,000 in excess
thereof during the notice period for any Funding Agreement Election Date,
the Principal Amount or any portion thereof equal to $1,000 or any
multiple of $1,000 in excess thereof for which the Owner has failed to make
such an election will become due and payable on the date that is 366
calendar days from, and including, such Funding Agreement Election Date
or, if such 366th calendar day is not a Business Day, the immediately
preceding Business Day.
The "Initial Maturity Date" of this Agreement will be May 4, 2007, or, if
such day is not a Business Day, the immediately preceding Business Day.
The "Maturity Date" of this Agreement will be May 4, 2011, or, if such day
is not a Business Day, the immediately preceding Business Day.
The "Funding Agreement Election Dates" will be the 4th calendar day of each
month from, and including, May 4th, 2006 to, and including, April 4, 2010,
whether or not any such day is a Business Day.
Deposit Amount: $750,000,000
Net Deposit Amount: $748,875,000
Currency: U.S. Dollars
Business Day: Any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in New York, New York and
London.
Business Day Convention: Unless otherwise specified in this Agreement, Modified Following
Business Day Convention.
"Modified Following Business Day Convention" means that, if a
relevant payment date is a day that is not a Business Day, such
date shall be postponed to the first following day that is a
Business Day unless that day falls in the next calendar month, in
which case that date will be the first preceding day that is a
Business Day.
Interest Rate: 4.82% for the initial Interest Period (as defined below) beginning
on the Effective Date. The Interest Rate shall be reset by Allstate
Life on each Interest Reset Date after the Effective Date to equal
the one-month U.S. Dollar London Interbank Offered Rate ("LIBOR")
increased by the applicable spread for Interest Reset Dates
occurring during the indicated period as set forth in the table
below.
LIBOR shall be determined with reference to the LIBOR Page (defined
below) at 11:00 AM London time on the date that is two London Banking Days
prior to the date such rate is to be reset.
If no rate appears on the particular interest determination date on the
LIBOR Page, LIBOR shall be the rate calculated by the Calculation Agent as
the arithmetic mean of at least two offered quotations obtained by the
Calculation Agent after requesting the principal London offices of each of
four major reference banks in the London interbank market to provide the
Calculation Agent with its offered quotation for deposits in U.S. Dollars
for the period of one month, commencing on the related Interest
Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on that interest determination date
and in a principal amount that is representative for a single
transaction in U.S. Dollars in that market at that time.
If fewer than two offered quotations referred to in the immediately
preceding paragraph are provided as requested, LIBOR shall be the rate
calculated by the Calculation Agent as the arithmetic mean of the rates
quoted at approximately 11:00 A.M., in the City of New York, on the
particular interest determination date by three major banks in the City of
New York selected by the Calculation Agent for loans in U.S. Dollars to
leading European banks, for the period of one month and in a principal amount
that is representative for a single transaction in U.S. Dollars in that
market at that time. If the banks so selected by the Calculation Agent are
not quoting as mentioned in the immediately preceding paragraph, LIBOR
shall be, LIBOR in effect on the particular interest determination
date; provided that if no LIBOR is then in effect, the interest rate that
will be effective as of the next Interest Reset Date will be the
initial interest rate.
For Interest Reset Dates occurring: Spread:
From, and including, the Issue Date to but excluding May 4, 2007 Minus 0.02%
From, and including, May 4, 2007 to but excluding May 4, 2008 Plus 0.00%
From, and including, May 4, 2008 to but excluding May 4, 2009 Plus 0.02%
From, and including, May 4, 2009 to but excluding May 4, 2010 Plus 0.03%
From, and including, May 4, 2010 to but excluding May 4, 2011 Plus 0.03%
"Interest Period" means each successive period beginning on, and
including an Interest Reset Date to but excluding the immediately
succeeding Interest Reset Date; provided that the initial Interest
Period will be the period from, and including, the Effective Date to, but
excluding, the first Interest Reset Date; provided, further, that the
final Interest Period for any portion of the Principal Amount maturing on or
prior to the Maturity Date will be the period from, and including, the
Interest Reset Date in the month immediately preceding the applicable
maturity date of such portion of the Principal Amount to but excluding, the
applicable maturity date of such portion of the Principal Amount.
"Interest" shall be earned daily at the Interest Rate and calculated using
the formula as provided below. The current balance of the Principal
Amount in the Funding Account Balance shall earn Interest from the date the
Deposit Amount is received by Allstate Life up to, but not including, the
date the Funding Account Balance is scheduled to be paid to the Owner.
Interest for each Interest Period shall be calculated as, (a)*(b)*(c),
where: (a) equals the current balance of the Principal Amount in the Funding
Account Balance, (b) equals the Interest Rate, and (c) equals the
actual number of days in the Interest Period divided by 360 ("Actual/360")
"Interest Reset Date" will be the 4th of each month, commencing May 4, 2006
to, but excluding the Maturity Date.
The "LIBOR Page" is LIBOR Moneyline Telerate Page 3750.
"London Banking Day" means a day, other than a Saturday or Sunday, on
which commercial banks and foreign exchange markets settle payments in
LIBOR currency in London.
"Interest Payment Date(s)" The 4th of each month, commencing on May 4, 2006;
provided that if any Interest Payment Date would otherwise be a day that is
not a Business Day, such Interest Payment Date shall be the immediately
succeeding Business Day, except that, if such Business Day is in the
succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. However, this convention will not
extend beyond any Maturity Date. The final Interest Payment Date for the
Funding Agreement, or any portion of the Funding Agreement maturing prior
to the Maturity Date, will be the relevant maturity date and interest
for the final Interest Period will accrue from and including the Interest
Payment Date immediately preceding such maturity date to but excluding
the relevant Maturity Date.
"Note" means any note of indebtedness issued by the Owner and secured by
this Agreement.
Additional/Other Terms, if any: See Additional Provisions Relating to the Funding Agreement
ADDITIONAL PROVISIONS RELATING TO THE FUNDING AGREEMENT
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in New York, New York
and London.
If, with respect to any Funding Agreement Election Date, the Owner does
not make an election to extend the maturity of the Funding Agreement with
respect to all or any portion of the principal amount equal to $1,000 or any
multiple of $1,000 in excess thereof, Allstate Life may, at its option, redeem
all or any portion of the principal amount equal to $1,000 or any multiple of
$1,000 in excess thereof for which the Owner has failed to make such an election
on each Interest Payment Date under the Funding Agreement in respect of any such
amount other than the Maturity Date applicable thereto (each, a "Funding
Agreement Contingent Redemption Date") together with any unpaid interest accrued
thereon up to but excluding the applicable Funding Agreement Contingent
Redemption Date.
Allstate Life shall give a written notice of prepayment to the Owner
not more than 20 days nor less than 15 days prior to the Funding Agreement
Contingent Redemption Date.
ALLSTATE LIFE INSURANCE COMPANY
APPLICATION
Application is hereby made to Allstate Life Insurance Company by Allstate Life
Global Funding for a Funding Agreement containing the terms set forth in the
Annex attached to this Application.
This Application is executed in duplicate, one counterpart being retained by
applicant and the other returned to Allstate Life Insurance Company.
It is agreed that this Application supersedes any previous application for a
Funding Agreement on substantially similar terms as contained in the Annex
attached to this Application.
Dated this 12th day of April, 2006.
Allstate Life Global Funding*
(Full Name of Applicant)
*By: Wilmington Trust Company, not in its individual capacity but solely as
Delaware Trustee and, as such, the agreements, representations and warranties
made by the Owner hereunder shall be binding only upon the Owner and Wilmington
Trust Company shall incur no personal liability in connection with any such
agreements, representations or warranties of the Owner.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Exhibit 10.2
SECURITY FOR
FUNDING NOTE RELATED TO SECURED MEDIUM TERM NOTES ISSUES UNDER THE
SECURED MEDIUM TERM NOTES PROGRAM
FACE OF SECURITY
CUSIP No.: ▇▇▇▇▇▇▇▇▇
ALLSTATE LIFE GLOBAL FUNDING
FUNDING NOTE
Title of Funding Note: $750,000,000 Extendible
Floating Rate Funding Note due 2011 Stated Maturity Date:
Initial Maturity Date: May 4, 2007, or if such
day is not a Business Day, the immediately
preceding Business Day
Principal Amount: $ 750,000,000 Final Maturity Date: May 4, 2011, or if such day
(or principal amount of foreign or composite is not a Business Day, the immediately preceding
currency) Business Day
Original Issue Date: April 12, 2006
Issue Price: 100.00%
Securities Exchange Listing: [ ] Yes [v ] No. If yes,
Interest Rate or Formula: See below. indicate name(s) of Securities Exchange(s):
Fixed Rate Note: [ ] Yes [v ] No. If yes, Floating Rate Note: [v ] Yes [ ] No. If yes,
Interest Rate: Regular Floating Rate Note: [v ]
Interest Payment Dates: Floating Rate/Fixed Rate Note: [ ]
Day Count Convention: Inverse Floating Rate Note: [ ]
Additional/Other Terms: Interest Rate:
Amortizing Note: [ ] Yes [v ] No. If yes, Interest Rate Basis(es):
Amortization Schedule: CD Rate [ ]
Additional/Other Terms: CMT Rate [ ]
Discount Note: [ ] Yes [v ] No. If yes, Commercial Paper Rate [ ]
Total Amount of Discount: Constant Maturity Swap Rate [ ]
Eleventh District Cost of Funds Rate [
Initial Accrual Period of Discount: ]
Interest Payment Dates: Federal Funds Open Rate [ ]
Additional/Other Terms: Federal Funds Rate [ ]
Redemption Provisions: [v ] Yes [ ] No. If yes, LIBOR [v ]
Initial Redemption Date: EURIBOR [ ]
Initial Redemption Percentage: Prime Rate [ ]
Annual Redemption Percentage Reduction, Treasury Rate [ ]
if any: If LIBOR:
Additional/Other Terms: See Exhibit B
("Short Term Note Certificate") attached
hereto LIBOR Page: 3750
[v ] LIBOR Moneyline Telerate:
Repayment Provisions: [ ] Yes [v ] No. If yes, [ ] LIBOR Reuters:
Optional Repayment Date(s): LIBOR Currency: U.S. Dollars
Optional Repayment Price: If CMT Rate:
Designated CMT MoneylineTelerate
Additional/Other Terms: Page:
Regular Interest Record Date(s): 15 calendar days If CMT MoneylineTelerate Page
prior to each Interest Payment Date 7052:
Sinking Fund, if any: Not applicable [ ] Weekly Average
Specified Currency: U.S. Dollars. [ ] Monthly Average
Exchange Rate Agent: Not applicable. Designated CMT Maturity Index:
Funding Note Calculation Agent: ▇.▇. ▇▇▇▇▇▇ Trust
Company, National Association Index Maturity: One month
Authorized Denominations: $1,000 Spread (+/-), if any: The table below indicates
the applicable Spread for the Interest Reset
Dates occurring during each of the indicated
periods.
Collateral: The right, title and interest of the Trust For Interest Reset Dates Spread:
in and to: occurring:
(i) Allstate Life Insurance Company
Funding Agreement No(s). FA - 41092; (ii) From, and including, the Issue
all proceeds in respect of such Funding Date to but excluding May 4,
Agreement(s); and (iii) all books and 2007 Minus 0.02%
records (including, without limitation, From, and including, May 4,
computer programs, printouts, and other 2007 to but excluding May 4,
computer materials and files) pertaining 2008 Plus 0.00%
to such Funding Agreement(s). From, and including, May 4,
2008 to but excluding May 4,
2009 Plus 0.02%
From, and including, May 4,
2009 to but excluding May 4,
2010 Plus 0.03%
From, and including, May 4,
2010 to but excluding May 4,
2011 Plus 0.03%
Additional Amounts to be Paid for Withholding Tax: Spread Multiplier, if any: Not Applicable
[ ] Yes [v ] No Initial Interest Rate, if any: 4.82% For the
initial Interest Period beginning on the
Original Issue Date. The Interest Rate shall be
reset by the Funding Note Calculation Agent on
each Interest Reset Date after the original
Issue Date to equal the one-month LIBOR
increased by the applicable spread for Interest
Reset Dates occurring during the indicated
period as set forth in the table above. LIBOR
shall be determined with respect to the LIBOR
Page identified above at 11:00 AM London Time on
the date that is two London Banking Days prior
to the date such rate is to be reset.
Initial Interest Reset Date: May 4, 2006
Interest Reset Dates: The 4th of each month;
provided that if any Interest Reset Date would
otherwise be a day that is not a Business Day,
such Interest Reset Date shall be the
immediately succeeding Business Day, except
that, if such Business Day is in the succeeding
calendar month, such Interest Reset Date shall
be the immediately preceding Business Day.
However, this convention will not extend beyond
any Final Maturity Date.
Business Day: Any day, other than a Saturday
or Sunday, that is neither a legal holiday nor a day on
which commercial bank are authorized or required by
law, regulation or executive order to close in New York,
New York and London.
Interest Determination Date(s): The second London banking day
preceding the related Interest Reset Date
Interest Payment Dates: The 4th of each month, commencing on
May 4, 2006 provided that if any Interest Payment Date
would otherwise be a day that is not a Business Day,
such Interest Payment Date shall be the immediately succeeding
Business Day, except that, if such Business Day is in
the succeeding calendar month, such Interest Payment Date
shall be the immediately preceding Business Day. However, this
convention will not extend beyond any Final Maturity
Date. The final Interest Payment Date for the Funding
Note, or any portion of the Funding Note maturing prior
to the Final Maturity Date, will be the relevant
maturity date and interest for the final Interest Period
will accrue from and including the Interest Payment Date
immediately preceding such maturity date to but excluding the
relevant maturity date.
Maximum Interest Rate, if any: Not Applicable
Minimum Interest Rate, if any: Not Applicable
Fixed Rate Commencement Date, if any: Not Applicable
Floating Interest Rate, if any: Not Applicable
Fixed Interest Rate, if any: Not Applicable
Day Count Convention: As specified on the reverse hereof
Additional/Other Terms:
This Funding Note will mature on the Initial Maturity Date, unless the
maturity of all or any portion of the Principal Amount of this Funding Note is
extended in accordance with the procedures described below. In no event will the
maturity of this Funding Note be extended beyond the Final Maturity Date.
During the notice period for each Election Date (as defined below), the
Holder may elect to extend the maturity of all or any portion of the Principal
Amount equal to $1,000 and integral multiples of $1,000 in excess thereof so
that the maturity of this Funding Note with respect to the entire Principal
Amount or such portion thereof will be extended to the date occurring 366
calendar days from, and including, the 4th day of the month immediately
following such Election Date. However, if that 366th calendar day is not a
Business Day, the maturity of this Funding Note with respect to the entire
Principal Amount or such portion thereof will be extended to the immediately
preceding Business Day. The Election Dates will be the 4th calendar day of each
month from, and including, May 4, 2006 to, and including, April 4, 2010, whether
or not any such day is a Business Day (each such day, an "Election Date").
To make an election effective on any Election Date, the Holder must
deliver to ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, the Paying Agent for
the Funding Note, through the normal clearing system channels described in more
detail below, a notice of election substantially in the form attached hereto as
Exhibit A (each, an "Election Notice") during the notice period for that
Election Date duly completed and, in the event of an election to extend the
maturity of only a portion of the Principal Amount of this Funding Note, this
Funding Note. The notice period for each Election Date will begin on the fifth
Business Day prior to the Election Date and end on the Election Date; provided,
however, that if the Election Date is not a Business Day, the notice period will
be extended to the next day that is a Business Day. The Election Notice must be
delivered to the Paying Agent no later than 12:00 p.m., New York City time, on
the Election Date. Upon delivery to the Paying Agent of an Election Notice to
extend the maturity of the Funding Note with respect to all or any portion of
the Principal Amount equal to $1,000 and integral multiples of $1,000 in excess
thereof during a notice period, that election will be revocable during each day
of such notice period, until 12:00 p.m., New York City time, on the last
Business Day in such notice period, at which time such Election Notice will
become irrevocable.
The Funding Note is issued in registered global form and remains on
deposit with DTC, the depositary for the Funding Note. Therefore, the Holder
must exercise the option to extend the maturity of this Funding Note through the
depositary. To ensure that the depositary receives timely notice of the Holder's
election to extend the maturity of all or a portion of this Funding Note, so
that it can deliver notice of the Holder's election to the Paying Agent prior to
the close of business in New York City on the last Business Day in the notice
period, the Holder must instruct the direct or indirect participant through
which it holds an interest in this Funding Note in accordance with the then
applicable operating procedures of the depositary.
The depositary must receive any notice of election from its
participants no later than 12:00 noon (New York City time) on the last Business
Day in the notice period for the depositary to deliver timely notice of the
Holder's election to the Paying Agent.
If the Holder does not make an election to extend the maturity of this
Funding Note with respect to all or any portion of the Principal Amount equal to
$1,000 or any multiple of $1,000 in excess thereof during the notice period for
any Election Date, the Principal Amount or any portion thereof equal to $1,000
or any multiple of $1,000 in excess thereof for which the Holder has failed to
make such an election will become due and payable on the date that is 366
calendar days from, and including, such Election Date or, if such 366th calendar
day is not a Business Day, the immediately preceding Business Day. The principal
amount of this Funding Note for which such election is not exercised will be
represented by a new Funding Note Certificate in the form attached hereto as
Exhibit B (each, a "Short-Term Funding Note Certificate") issued as of such
Election Date and Schedule A hereto shall be annotated as of such Election Date
to reflect the corresponding decrease in the Principal Amount hereof. Each
Short-Term Funding Note so issued will have the same terms as this Funding Note,
except that it will not be extendible, will have a separate CUSIP number, its
maturity date will be the date that is 366 calendar days from, and including,
such Election Date or, if such 366th calendar day is not a Business Day, the
immediately preceding Business Day and will be subject to Contingent Redemption
as described therein. The Spread applicable to the Short-Term Funding Note shall
be the Spread applicable to this Funding Note for the period ending on the
Stated Maturity Date of the Short-Term Funding Note. The failure to elect to
extend the maturity of all or any portion of this Funding Note will be
irrevocable and will be binding upon any subsequent holder of this Funding Note.
This Funding Note shall be deemed cancelled as to any portion hereof
for which a duly completed Election Notice and, if applicable, this Funding Note
is not delivered to the Paying Agent during the notice period for any Election
Date.
--------------------------------------------------------------------------------
This note certificate (the "Funding Note Certificate") represents a
duly authorized funding note (the "Funding Note") of Allstate Life Global
Funding, a statutory trust organized under the laws of the State of Delaware
("Global Funding"). The Funding Note is being issued in connection with the
issuance and sale by the trust specified above (the "Trust") of the trust notes
identified on Annex A to that certain series instrument to which Global Funding
and the Trust are parties (the "Series Instrument") (the "Trust Notes"). The
Funding Note is being issued under the Funding Note Indenture, effective as of
the date hereof (as amended or supplemented from time to time, the "Funding Note
Indenture") among Global Funding and the other persons specified therein.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed in the Standard Funding Note Indenture Terms, which
are incorporated by reference in and form a part of the Funding Note Indenture
(as amended or supplemented from time to time, the "Standard Funding Note
Indenture Terms").
Subject to the immediately following paragraph, Global Funding, for
value received, hereby promises to pay to the Holder or Holders of the Funding
Note on the Maturity Date (as defined below) (or on the date of redemption or
repayment by Global Funding) the principal amount of the Funding Note and, if so
specified above, to pay interest from time to time on the Funding Note from the
Original Issue Date specified above (the "Original Issue Date") or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for at the rate per annum determined in accordance with the provisions on the
reverse hereof and as specified above, until the principal of the Funding Note
is paid or made available for payment and to pay such other amounts due and
owing with respect to the Funding Note.
This Funding Note Certificate shall be surrendered for cancellation by
or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture
Trustee, immediately upon the assignment by Global Funding to, or as directed
by, the Trust of each funding agreement identified on Exhibit A to the Closing
Instrument (each, a "Funding Agreement") in accordance with the terms of the
Funding Note and the Coordination Agreement, and such cancellation shall operate
as a redemption and satisfaction of the Funding Note.
On any exchange or purchase and cancellation of the Funding Note,
details of such exchange or purchase and cancellation shall be entered in the
records of Global Funding. Upon any such exchange or purchase and cancellation,
the principal amount of the Funding Note shall be charged by the principal
amount so exchanged or purchased and cancelled, as provided in the Standard
Funding Note Indenture Terms.
Unless otherwise set forth above, if the Funding Note is subject to an
Annual Redemption Percentage Reduction as specified above, the Redemption Price
of the portion of the Funding Note represented by this Funding Note Certificate
shall initially be the Initial Redemption Percentage of the principal amount of
the portion of the Funding Note represented by this Funding Note Certificate on
the Initial Redemption Date and shall decline at each anniversary of the Initial
Redemption Date (each such date, a "Redemption Date") by the Annual Redemption
Percentage Reduction of such principal amount until the Redemption Price is 100%
of such principal amount.
The Funding Note will mature on the earlier of the Initial Maturity
Date or the Final Maturity Date (as defined in the Trust Notes) of the Trust
Notes (the "Trust Notes Maturity Date"), unless its principal (or, any
installment of its principal) becomes due and payable prior to any such date,
whether, as applicable, by the declaration of acceleration of maturity, notice
of redemption at the option of Global Funding, notice of the Holder's option to
elect repayment or otherwise (the Initial Maturity Date or the Maturity Date,
the Trust Notes Maturity Date or any date prior to any such date on which the
Funding Note becomes due and payable, as the case may be, are referred to as the
"Maturity Date" with respect to principal of the Funding Note repayable on such
date).
Unless otherwise provided above and except as provided in the following
paragraph, Global Funding will pay interest on each Interest Payment Date
specified above, commencing with the first Interest Payment Date next succeeding
the Original Issue Date, and on the Maturity Date; provided that any payment of
principal, premium, if any, interest or other amounts to be made in accordance
with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest
Payment Date, the Initial Maturity Date or on the Final Maturity Date will be
the amount equal to the interest accrued from and including the immediately
preceding Interest Payment Date in respect of which interest has been paid or
from and including the date of issue, if no interest has been paid, to but
excluding the applicable Interest Payment Date, the Initial Maturity Date or the
Final Maturity Date, as the case may be (each, an "Interest Period").
Reference is hereby made to the further provisions of the Funding Note
set forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall for all purposes have the same
force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to the Funding Note as specified above, the
Funding Note shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
The Funding Note or the portion thereof represented by this Funding
Note Certificate shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been executed by the Funding
Note Indenture Trustee pursuant to the Funding Note Indenture.
IN WITNESS WHEREOF, Global Funding has caused this instrument to be
duly executed on its behalf.
Dated: Original Issue Date ALLSTATE LIFE GLOBAL FUNDING,
as Issuer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CERTIFICATE OF AUTHENTICATION
This Funding Note Certificate is one of the Funding Note Certificates
representing the Funding Note described in the within-mentioned Funding Note
Indenture.
Dated: Original Issue Date ▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL ASSOCIATION,
as Funding Note Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------------
Authorized Signatory
REVERSE OF DEFINITIVE SECURITY
SECTION 1. General. This Funding Note is being issued pursuant to the Funding
Note Indenture in connection with the issuance and sale by the Trust of the
Trust Notes. The Funding Note shall be surrendered for cancellation by or on
behalf of the Trust, and shall be cancelled by the Funding Note Indenture
Trustee, immediately upon the assignment by Global Funding to, or as directed
by, the Trust of each Funding Agreement, and such cancellation shall operate as
a redemption of the Funding Note.
SECTION 2. Currency. The Funding Note is denominated in, and payments of
principal of, premium, if any, and interest on, if any, and other amounts in
respect of, the Funding Note will be in the Specified Currency designated on the
face hereof. If the specified currency of the Funding Note is other than U.S.
Dollars (or "Foreign Currency Note"), any amounts so payable by Global Funding
in the Specified Currency will be converted by the exchange rate agent
designated on the face hereof (the "Exchange Rate Agent") into United States
dollars for payment to the registered holders hereof unless otherwise specified
on the face hereof or a registered holder elects, in the manner described below,
to receive payments in the Specified Currency.
If the Specified Currency for a Foreign Currency Note is not available
for any required payment of principal, premium, if any, and/or interest, if any,
due to the imposition of exchange controls or other circumstances beyond the
control of Global Funding, Global Funding will be entitled to satisfy the
obligations to the registered holders of the Foreign Currency Note by making
payments in United States dollars based on the highest bid quotation in The City
of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by Global Funding
for the purchase by the quoting dealer of the Specified Currency for United
States dollars for settlement on that payment date in the aggregate amount of
the Specified Currency payable to all registered holders of the Foreign Currency
Note scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the relevant registered holders of the Foreign Currency Note by
deductions from any payments. If three bid quotations are not available,
payments will be made in the Specified Currency.
Registered holders of a Foreign Currency Note may elect to receive all
or a specified portion of any payment of principal, premium, if any, and/or
interest, if any, in the Specified Currency by submitting a written request to
the Funding Note Indenture Trustee at its corporate trust office in The City of
New York on or prior to the applicable Regular Interest Record Date or at least
fifteen calendar days prior to the Maturity Date, as the case may be. This
written request may be mailed or hand delivered or sent by cable, telex or other
form of facsimile transmission. This election will remain in effect until
revoked by written notice delivered to the Funding Note Indenture Trustee on or
prior to a Regular Interest Record Date or at least fifteen calendar days prior
to the Maturity Date, as the case may be. Registered holders of a Foreign
Currency Note to be held in the name of a broker or nominee should contact their
broker or nominee to determine whether and how an election to receive payments
in the Specified Currency may be made.
Unless otherwise specified on the face hereof, if the Specified
Currency is other than United States dollars, if the Holder hereof elects to
receive payments of principal, premium, if any, and/or interest, if any, in the
Specified Currency, the Holder must notify the Funding Note Indenture Trustee of
that election on or prior to the fifth Business Day after the applicable Regular
Interest Record Date or at least ten calendar days prior to the Maturity Date,
as the case may be. If complete instructions are received by the Funding Note
Indenture Trustee on or prior to such dates, then the Holder will receive
payments in the Specified Currency.
Unless otherwise specified on the face hereof, if payment in the
Specified Currency hereon is not available to Global Funding for any required
payment of principal, premium, if any, and/or interest, if any, due to the
imposition of exchange controls or other circumstances beyond Global Funding's
control, then Global Funding will be entitled to satisfy its obligations by
making payments in United States dollars on the basis of the Market Exchange
Rate, computed by the Exchange Rate Agent as described above, on the second
Business Day prior to the particular payment or, if the Market Exchange Rate is
not then available, on the basis of the most recently available Market Exchange
Rate. The "Market Exchange Rate" for a Specified Currency other than United
States dollars means the noon dollar buying rate in The City of New York for
cable transfers for the Specified Currency as certified for customs purposes
(or, if not so certified, as otherwise determined) by the Federal Reserve Bank
of New York. Any payment in respect hereof made under such circumstances in U.S.
Dollars will not constitute an Event of Default under the Funding Note
Indenture.
In the event that a member state of the European Union in whose
national currency the Funding Note is denominated becomes a participant member
in the third stage of the European economic and monetary union, Global Funding
may on or after the date of such occurrence, without the consent of any Holder
hereof, redenominate all, but not less than all, of the Principal amount of the
Funding Note represented hereby.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and, in the absence of manifest error, shall be
conclusive for all purposes and binding on any Holder hereof.
All currency exchange costs will be borne by the Holder hereof by
deduction from the payments made hereon.
SECTION 3. Determination of Interest Rate and Other Payment Provisions.
Fixed Rate Note. If the Funding Note is designated on the face hereof
as a "Fixed Rate Note," the Funding Note will bear interest from the Original
Issue Date until the Maturity Date. Unless otherwise specified on the face
hereof, the rate of interest payable on the Funding Note will not be adjusted;
unless otherwise specified on the face hereof, interest will be payable on the
Interest Payment Dates set forth on the face hereof and at the Maturity Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. If any Interest Payment Date or the Maturity Date of a Fixed Rate Note
falls on a day that is not a Business Day, any payments of principal, premium,
if any, and/or interest or other amounts required to be made, will be made on
the next succeeding Business Day, and no additional interest will accrue in
respect of the payment made on that next succeeding Business Day.
Discount Note. If the Funding Note is designated on the face hereof as
a "Discount Note" (as defined below), payments in respect of the Funding Note
shall be made as set forth on the face hereof. In the event a Discount Note is
redeemed, repaid or accelerated, the amount payable to the Holder of the
Discount Note will be equal to the sum of: (1) the Issue Price (increased by any
accruals of discount) and, in the event of any redemption of the Discount Note,
if applicable, multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid
interest accrued on the Discount Note to the date of redemption, repayment or
acceleration of maturity, as applicable. For purposes of determining the amount
of discount that has accrued as of any date on which a redemption, repayment or
acceleration of maturity of the Funding Note occurs for a Discount Note, the
discount will be accrued using a constant yield method. The constant yield will
be calculated using a 30-day month, 360-day year convention, a compounding
period that, except for the Initial Period (as defined below), corresponds to
the shortest period between Interest Payment Dates for a Discount Note (with
ratable accruals within a compounding period), a coupon rate equal to the
initial coupon rate applicable to a Discount Note and an assumption that the
maturity of such Discount Note will not be accelerated. If the period from the
date of issue to the first Interest Payment Date for a Discount Note (the
"Initial Period") is shorter than the compounding period for such Discount Note,
a proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then the
period will be divided into a regular compounding period and a short period with
the short period being treated as provided in the preceding sentence. The
accrual of the applicable discount may differ from the accrual of original issue
discount for purposes of the Code, certain Discount Notes may not be treated as
having original issue discount within the meaning of the Code, and certain
Funding Notes other than Discount Notes may be treated as issued with original
issue discount for federal income tax purposes. The Funding Note is a "Discount
Note" if its Issue Price is less than 100% of the principal amount thereof by
more than a percentage equal to the product of 0.25% and the number of full
years to the Initial Maturity Date or the Final Maturity Date. A Discount Note
may not bear any interest currently or may bear interest at a rate that is below
market rates at the time of issuance.
Amortizing Note. If the Funding Note is specified on the face hereof as
an "Amortizing Note," the Funding Note shall bear interest at the rate set forth
on the face hereof, and payments of principal and interest shall be made as set
forth on the face hereof and/or in accordance with SCHEDULE I attached hereto.
Unless otherwise specified on the face hereof, interest on the Funding Note will
be computed on the basis of a 360-day year of twelve 30-day months. Payments
with respect to an Amortizing Note will be applied first to interest due and
payable on the Funding Note and then to the reduction of the unpaid principal
amount of the Funding Note.
Floating Rate Note. If the Funding Note is specified on the face hereof
as a "Floating Rate Note," interest on the Funding Note shall accrue and be
payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate
Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate
Note, Eleventh District Cost of Funds Rate Note, Federal Funds Open Rate Note,
Federal Funds Rate Note, LIBOR Note, EURIBOR Note, Prime Rate Note or Treasury
Rate Note. If the Funding Note is designated on the face hereof as a Floating
Rate Note, the face hereof will specify whether the Funding Note is a Regular
Floating Rate Note, Inverse Floating Rate Note or Floating Rate/Fixed Rate Note.
For the period from the date of issue to, but not including, the first Interest
Reset Date set forth on the face hereof, the interest rate hereon shall be the
Initial Interest Rate specified on the face hereof. Thereafter, the interest
rate hereon will be reset as of and be effective as of each Interest Reset Date.
(A) If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next day that is a
Business Day; provided, however, that if the Funding Note is a LIBOR Note
or a EURIBOR Note and such Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the Business Day immediately
preceding such Interest Reset Date.
(B) Unless specified otherwise on the face hereof, Interest Reset Dates are as
follows: (1) if the Funding Note resets daily, each Business Day; (2) if
the Funding Note resets weekly, other than Treasury Rate Note, the
Wednesday of each week; (3) if the Funding Note is a Treasury Rate Note
that resets weekly, and except as provided below under "Treasury Rate
Note," the Tuesday of each week; (4) if the Funding Note resets monthly,
the third Wednesday of each month, unless the Eleventh District Cost of
Funds Rate is the Interest Rate Basis (as defined below) applicable to the
Funding Note, in which case the Funding Note will reset the first calendar
day of the month; (5) if the Funding Note resets quarterly, the third
Wednesday of every third calendar month, beginning in the third calendar
month following the month in which the Notes were issued; (6) if the
Funding Note resets semiannually, the third Wednesday of each of the two
months specified on the face hereof; and (7) if the Funding Note resets
annually, the third Wednesday of the month specified on the face hereof;
provided, however, that with respect to a Floating Rate/Fixed Rate Note,
the rate of interest thereon will not reset after the particular Fixed Rate
Commencement Date specified on the face hereof (the "Fixed Rate
Commencement Date").
(C) Accrued interest is calculated by multiplying the principal amount of the
Floating Rate Note by an accrued interest factor. The accrued interest
factor is computed by adding the interest factor calculated for each day in
the particular Interest Period. The interest factor for each day will be
computed by dividing the interest rate applicable to such day by 360, in
the case of a Floating Rate Note as to which the CD Rate, the Commercial
Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds
Open Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an
applicable Interest Rate Basis, or by the actual number of days in the
year, in the case of a Floating Rate Note as to which the CMT Rate or the
Treasury Rate is an applicable Interest Rate Basis. In the case of a
Floating Rate Note as to which the Constant Maturity Swap Rate is the
Interest Rate Basis, the interest factor will be computed by dividing the
number of days in the interest period by 360 (the number of days to be
calculated on the basis of a year of 360 days with 12 30-day months (unless
(i) the last day of the interest period is the 31st day of a month but the
first day of the interest period is a day other than the 30th or 31st day
of a month, in which case the month that includes that last day shall not
be considered to be shortened to a 30-day month, or (ii) the last day of
the interest period is the last day of the month of February, in which case
the month of February shall not be considered to be lengthened to a 30-day
month)). The interest factor for a Floating Rate Note as to which the
interest rate is calculated with reference to two or more Interest Rate
Bases will be calculated in each period in the same manner as if only the
applicable Interest Rate Basis specified on the face hereof applied. The
interest rate shall be set forth on the face hereof. For purposes of making
the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on that date. Unless
otherwise specified on the face hereof, the interest rate that is effective
on the applicable Interest Reset Date will be determined on the applicable
Interest Determination Date and calculated on the applicable Funding Note
Calculation Date (as defined below).
"Funding Note Calculation Date" means the date by which the Funding
Note Calculation Agent designated on the face hereof, is to calculate
the interest rate which will be the earlier of (1) the tenth calendar
day after the particular Interest Determination Date or, if such day
is not a Business Day, the next succeeding Business Day; or (2) the
Business Day immediately preceding the applicable Interest Payment
Date or the Maturity Date, as the case may be.
(D) Unless otherwise specified on the face hereof, all percentages resulting
from any calculation on a Floating Rate Note will be rounded to the nearest
one hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards. All dollar amounts used in or resulting
from any calculation on a Floating Rate Note will be rounded, in the case
of United States dollars, to the nearest cent or, in the case of a foreign
currency, to the nearest unit (with one-half cent or unit being rounded
upwards).
(E) Unless otherwise specified on the face hereof, if the Funding Note is
designated on the face hereof as a Floating Rate Note, if any Interest
Payment Date (other than the Maturity Date for the Funding Note) would
otherwise be a day that would not be a Business Day, such Interest Payment
Date would be postponed to the next succeeding Business Day; provided,
however, that if the Funding Note is a LIBOR Note or a EURIBOR Note and
such Business Day is in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day. Unless
otherwise specified on the face hereof, if the Funding Note is designated
on the face hereof as a Floating Rate Note, if the Maturity Date of the
Funding Note falls on a day this is not a Business Day, Global Funding will
make the required payment of principal, premium, if any, and interest or
other amounts on the next succeeding Business Day, and no additional
interest will accrue in respect of the payment made on that next succeeding
Business Day.
Unless otherwise specified on the face hereof and except as provided
below, interest will be payable as follows: (1) if the Interest Reset Date for
the Funding Note is daily, weekly or monthly, interest will be payable on the
third Wednesday of each month or on the third Wednesday of every third calendar
month, beginning in the third calendar month following the month in which the
Notes were issued, as specified on the face hereof, (2) if the Interest Reset
Date for the Funding Note is quarterly, interest will be payable on the third
Wednesday of every third calendar month, beginning in the third calendar month
following the month in which the Notes were issued, (3) if the Interest Reset
Date for the Funding Note is semiannually, interest will be payable on the third
Wednesday of each of two months of each year specified on the face hereof, (4)
if the Interest Reset Date for the Funding Note is annually, interest will be
payable on the third Wednesday of the month of each year specified on the face
hereof. In each of these cases, the Maturity Date will also be an Interest
Payment Date.
If specified on the face hereof, the Funding Note may have either or
both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest
Rate is so designated, the interest rate that may accrue during any Interest
Period for a Floating Rate Note cannot ever exceed such Maximum Interest Rate
and in the event that the interest rate on any Interest Reset Date would exceed
such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then
the interest rate on such Interest Reset Date shall be the Maximum Interest
Rate. If a Minimum Interest Rate is so designated, the interest rate that may
accrue during any Interest Period for a Floating Rate Note cannot ever be less
than such Minimum Interest Rate and in the event that the interest rate on any
Interest Reset Date would be less than such Minimum Interest Rate (as if no
Minimum Interest Rate were in effect) then the interest rate on such Interest
Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the
contrary contained herein, if the Funding Note is designated on the face hereof
as a Floating Rate Note, the interest rate on the Funding Note shall not exceed
the maximum interest rate permitted by applicable law.
All determinations of interest by the Funding Note Calculation Agent
designated on the face hereof will, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of the Funding Note and
neither the Funding Note Indenture Trustee nor the Funding Note Calculation
Agent shall have any liability to the Holder of the Funding Note in respect of
any determination, calculation, quote or rate made or provided by the Funding
Note Calculation Agent. Upon request of the Holder of the Funding Note, the
Funding Note Calculation Agent will provide the interest rate then in effect
and, if determined, the interest rate that will become effective on the next
Interest Reset Date with respect to the Funding Note. If the Funding Note
Calculation Agent is incapable or unwilling to act as such or if the Funding
Note Calculation Agent fails duly to establish the interest rate for any
interest accrual period or to calculate the interest amount or any other
requirements, Global Funding will appoint a successor to act as such in its
place. The Funding Note Calculation Agent may not resign its duties until a
successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein,
on each Interest Reset Date, the rate of interest on the Funding Note on and
after the first Interest Reset Date shall be the interest rate determined in
accordance with the provisions of the heading below which has been designated as
the Interest Rate Basis on the face hereof (the "Interest Rate Basis"), the base
rate, plus or minus the Spread, if any, specified on the face hereof and/or
multiplied by the Spread Multiplier, if any, specified on the face hereof.
(A) CD Rate Note. If the Interest Rate Basis is the CD Rate, the Funding Note
shall be deemed to be a "CD Rate Note". A CD Rate Note will bear interest
at the interest rate calculated with reference to the CD Rate and the
Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the CD Rate on each Interest Determination Date. The
Interest Determination Date is the second Business Day preceding the
related Interest Reset Date.
"CD Rate" means: (1) the rate on the particular Interest Determination
Date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the caption "CDs (secondary
market)"; or (2) if the rate referred to in clause (1) is not so
published by 3:00 P.M., New York City time, on the related Funding
Note Calculation Date, the rate on the particular Interest
Determination Date for negotiable United States dollar certificates of
the particular Index Maturity as published in the H.15 Daily Update
(as defined below) or other recognized electronic source used for the
purpose of displaying the applicable rate under the heading "CDs
(secondary market)"; or (3) if the rate referred to in clause (2) is
not yet published in either H.15(519) or the H.15 Daily Update by 3:00
P.M., New York City time, on the related Funding Note Calculation
Date, then the CD Rate will be the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent as
the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time on that Interest Determination Date of three
leading nonbank dealers in negotiable United States dollar
certificates of deposit in The City of New York (which may include the
Agents or their affiliates) selected by the Funding Note Calculation
Agent for negotiable United States dollar certificates of deposit of
major United States money market banks for negotiable United States
certificates of deposit with a remaining maturity closest to the
particular Index Maturity in an amount that is representative for a
single transaction in that market at that time; or (4) if the dealers
so selected by the Funding Note Calculation Agent are not quoting as
mentioned in clause (3), the CD Rate in effect on the particular
Interest Determination Date; provided that if no CD Rate is then in
effect, the interest rate that will be effective as of the next
Interest Reset Date will be the Initial Interest Rate.
"H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of
Governors of the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the
Federal Reserve System at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇/▇▇▇▇▇▇, or any successor
site or publication.
(B) CMT Rate Note. If the Interest Basis is the CMT Rate, the Funding Note
shall be deemed to be a "CMT Rate Note". A CMT Rate Note will bear interest
at the interest rate calculated with reference to the CMT Rate and the
Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the CMT Rate on each applicable Interest Determination Date.
The applicable Interest Determination Date is the second Business Day prior
to the Interest Reset Date.
"CMT Rate" means: (1) if CMT Moneyline Telerate Page 7051 is specified
on the face hereof: (a) the percentage equal to the yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified on the face hereof as published in H.15(519) under
the caption "Treasury Constant Maturities", as the yield is displayed
on Moneyline Telerate (or any successor service) on page 7051 (or any
other page as may replace the specified page on that service)
("Moneyline Telerate Page 7051"), for the particular Interest
Determination Date; or (b) if the rate referred to in clause (a) does
not so appear on Moneyline Telerate Page 7051, the percentage equal to
the yield for United States Treasury securities at "constant maturity"
having the particular Index Maturity and for the particular Interest
Determination Date as published in H.15(519) under the caption
"Treasury Constant Maturities"; or (c) if the rate referred to in
clause (b) does not so appear in H.15(519), the rate on the particular
Interest Determination Date for the period of the particular Index
Maturity as may then be published by either the Federal Reserve System
Board of Governors or the United States Department of the Treasury
that the Funding Note Calculation Agent determines to be comparable to
the rate which would otherwise have been published in H.15(519); or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent as a yield to maturity based on the
arithmetic mean of the secondary market bid prices at approximately
3:30 P.M., New York City time, on that Interest Determination Date of
three leading primary United States government securities dealers in
The City of New York (which may include the Agents or their
affiliates) (each, a "Reference Dealer"), selected by the Funding Note
Calculation Agent from five Reference Dealers selected by the Funding
Note Calculation Agent and eliminating the highest quotation, or, in
the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity equal to the particular
Index Maturity, a remaining term to maturity no more than one year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that
market at that time; or (e) if fewer than five but more than two of
the prices referred to in clause (d) are provided as requested, the
rate on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the
quotations shall be eliminated; or (f) if fewer than three prices
referred to in clause (d) are provided as requested, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as a yield to maturity based on the arithmetic mean
of the secondary market bid prices as of approximately 3:30 P.M., New
York City time, on that Interest Determination Date of three Reference
Dealers selected by the Funding Note Calculation Agent from five
Reference Dealers selected by the Funding Note Calculation Agent and
eliminating the highest quotation or, in the event of equality, one of
the highest and the lowest quotation or, in the event of equality, one
of the lowest, for United States Treasury securities with an original
maturity greater than the particular Index Maturity, a remaining term
to maturity closest to that Index Maturity and in a principal amount
that is representative for a single transaction in the securities in
that market at that time; or (g) if fewer than five but more than two
prices referred to in clause (f) are provided as requested, the rate
on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the
quotations will be eliminated; or (h) if fewer than three prices
referred to in clause (f) are provided as requested, the CMT Rate in
effect on the particular Interest Determination Date; provided that if
no CMT Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial
Interest Rate; or (2) if CMT Moneyline Telerate Page 7052 is specified
on the face hereof: (a) the percentage equal to the one-week or
one-month, as specified on the face hereof, average yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified on the face hereof as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is
displayed on Moneyline Telerate (or any successor service) (on page
7052 or any other page as may replace the specified page on that
service) ("Moneyline Telerate Page 7052"), for the week or month, as
applicable, ended immediately preceding the week or month, as
applicable, in which the particular Interest Determination Date falls;
or (b) if the rate referred to in clause (a) does not so appear on
Moneyline Telerate Page 7052, the percentage equal to the one-week or
one-month, as specified on the face hereof, average yield for United
States Treasury securities at "constant maturity" having the
particular Index Maturity and for the week or month, as applicable,
preceding the particular Interest Determination Date as published in
H.15(519) opposite the caption "Treasury Constant Maturities"; or (c)
if the rate referred to in clause (b) does not so appear in H.15(519),
the one-week or one-month, as specified on the face hereof, average
yield for United States Treasury securities at "constant maturity"
having the particular Index Maturity as otherwise announced by the
Federal Reserve Bank of New York for the week or month, as applicable,
ended immediately preceding the week or month, as applicable, in which
the particular Interest Determination Date falls; or (d) if the rate
referred to in clause (c) is not so published, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as a yield to maturity based on the arithmetic mean
of the secondary market bid prices at approximately 3:30 P.M., New
York City time, on that Interest Determination Date of three Reference
Dealers selected by the Funding Note Calculation Agent from five
Reference Dealers selected by the Funding Note Calculation Agent and
eliminating the highest quotation, or, in the event of equality, one
of the highest, and the lowest quotation or, in the event of equality,
one of the lowest, for United States Treasury securities with an
original maturity equal to the particular Index Maturity, a remaining
term to maturity no more than one year shorter than that Index
Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time; or (e) if
fewer than five but more than two of the prices referred to in clause
(d) are provided as requested, the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of the quotations shall be eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular Interest Determination Date
calculated by the Funding Note Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid
prices as of approximately 3:30 P.M., New York City time, on that
Interest Determination Date of three Reference Dealers selected by the
Funding Note Calculation Agent from five Reference Dealers selected by
the Funding Note Calculation Agent and eliminating the highest
quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity greater
than the particular Index Maturity, a remaining term to maturity
closest to that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that
market at the time; or (g) if fewer than five but more than two prices
referred to in clause (f) are provided as requested, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of the quotations will
be eliminated; or (h) if fewer than three prices referred to in clause
(f) are provided as requested, the CMT Rate in effect on that Interest
Determination Date; provided that if no CMT Rate is then in effect,
the interest rate that will be effective as of the next Interest Reset
Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity
greater than the Index Maturity specified on the face hereof have
remaining terms to maturity equally close to the particular Index
Maturity, the quotes for the United States Treasury security with the
shorter original remaining term to maturity will be used.
(C) Commercial Paper Rate Note. If the Interest Rate Basis is the Commercial
Paper Rate, the Funding Note shall be deemed to be a "Commercial Paper Rate
Note". A Commercial Paper Rate Note will bear interest for each Interest
Reset Date at the interest rate calculated with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any. The Funding Note
Calculation Agent will determine the Commercial Paper Rate on each
applicable Interest Determination Date. The Interest Determination Date is
the second Business Day preceding the related Interest Reset Date.
"Commercial Paper Rate" means: (1) the Money Market Yield (calculated
as described below) on the Interest Determination Date of the rate for
commercial paper having the applicable Index Maturity as such rate is
published in H.15(519) under the heading "Commercial
Paper--Nonfinancial"; or (2) if the rate referred to in clause (1) is
not published by 3:00 P.M., New York City time, on the Funding Note
Calculation Date pertaining to such Interest Determination Date, then
the Commercial Paper Rate shall be the Money Market Yield on the
particular Interest Determination Date of the rate for commercial
paper having the particular Index Maturity as published on H.15 Daily
Update or such other recognized electronic source used for the
purposes of displaying the applicable rate, under the caption
"Commercial Paper--Nonfinancial"; or (3) if the rate referred to in
clause (2) is not published by 3:00 P.M., New York City time, on the
Funding Note Calculation Date, then the Commercial Paper Rate as
calculated by the Funding Note Calculation Agent shall be the Money
Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on that Interest
Determination Date of three leading dealers of United States dollar
commercial paper in The City of New York (which may include the Agents
or their affiliates) selected by the Funding Note Calculation Agent
for commercial paper having the particular Index Maturity placed for
industrial issuers whose bond rating is "Aa" by ▇▇▇▇▇'▇ or the
equivalent from another nationally recognized statistical rating
organization; or (4) if the dealers so selected by the Funding Note
Calculation Agent are not quoting as mentioned in clause (3), the
Commercial Paper Rate in effect on the particular Interest
Determination Date; provided that if no Commercial Paper Rate is then
in effect, the interest rate that will be effective as of the next
Interest Reset Date will be the Initial Interest Rate.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
------------------------
360 - (D x M)
where "D" refers to the per annum rate for the commercial paper,
quoted on a bank discount basis and expressed as a decimal; and "M"
refers to the actual number of days in the applicable Interest Period.
(D) Constant Maturity Swap Rate Notes. If the Interest Basis is the Constant
Maturity Swap Rate, the Notes shall be deemed to be "Constant Maturity Swap
Rate Notes." Constant Maturity Swap Rate Notes will bear interest at the
interest rate calculated with reference to the Constant Maturity Swap Rate
and the Spread or Spread Multiplier, if any. The Funding Note Calculation
Agent will determine the Constant Maturity Swap Rate on each applicable
Interest Determination Date. The Interest Determination Date is the second
U.S. Government Securities Business Day (as defined below) preceding the
related Interest Reset Date; provided, however, that if, after attempting
to determine the Constant Maturity Swap Rate (as described below), such
rate is not determinable for a particular Interest Determination Date (the
"Original Interest Determination Date"), then such Interest Determination
Date shall be the first U.S. Government Securities Business Day preceding
the Original Interest Determination Date for which the Constant Maturity
Swap Rate can be determined as described below. Constant Maturity Swap
Rate" means (1) the rate for U.S. Dollar swaps with the designated maturity
specified on the face hereof, expressed as a percentage, which appears on
the Reuters Screen ISDAFIX1 Page as of 11:00 A.M., New York City time, on
the particular Interest Determination Date, or (2) if the rate referred to
in clause (1) does not appear on the Reuters Screen ISDAFIX1 Page by 2:00
P.M., New York City time, on such Interest Determination Date, a percentage
determined on the basis of the mid-market semi-annual swap rate quotations
provided by the Reference Banks (as defined below) as of approximately
11:00 A.M., New York City time, on such Interest Determination Date, and,
for this purpose, the semi-annual swap rate means the mean of the bid and
offered rates for the semi-annual fixed leg, calculated on a 30/360 day
count basis, of a fixed-for-floating U.S. Dollar interest rate swap
transaction with a term equal to the designated maturity specified in the
face hereof commencing on the Interest Reset Date and in a Representative
Amount (as defined below) with an acknowledged dealer of good credit in the
swap market, where the floating leg, calculated on an Actual/360 day count
basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified
on the face hereof. The Funding Note Calculation Agent will request the
principal New York City office of each of the Reference Banks to provide a
quotation of its rate. If at least three quotations are provided, the rate
for that Interest Determination Date will be the arithmetic mean of the
quotations, eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest).
"U.S. Government Securities Business Day" means any day except for
Saturday, Sunday, or a day on which The Bond Market Association
recommends that the fixed income departments of its members be closed
for the entire day for purposes of trading in U.S. government
securities.
"Representative Amount" means an amount that is representative for a
single transaction in the relevant market at the relevant time.
"Reference Banks" mean five leading swap dealers in the New York City
interbank market, selected by the Funding Note Calculation Agent,
after consultation with Allstate Life.
(E) Eleventh District Cost of Funds Rate Note. If the Interest Basis is the
Eleventh District Costs of Funds Rate, the Funding Note shall be deemed to
be a "Eleventh District Cost of Funds Rate Note". An Eleventh District Cost
of Funds Note will bear interest at the interest rate calculated with
reference to the Eleventh District Cost of Funds Rate and the Spread or
Spread Multiplier, if any. The Funding Note Calculation Agent will
determine the Eleventh District Cost of Rate on each applicable Interest
Determination Date. The applicable Interest Determination Date is the last
working day of the month immediately preceding the related Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the
Eleventh District Index. The "Eleventh District Cost of Funds Rate" means
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the particular
Interest Determination Date falls as set forth under the caption "11th
District" on the display on Moneyline Telerate (or any successor service)
on page 7058 (or any other page as may replace the specified page on that
service) ("Moneyline Telerate Page 7058") as of 11:00 A.M., San Francisco
time, on that Interest Determination Date, or (2) if the rate referred to
in clause (1) does not so appear on Moneyline Telerate Page 7058, the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced
(the "Eleventh District Index") by the Federal Home Loan Bank of San
Francisco as the cost of funds for the calendar month immediately preceding
that Interest Determination Date, or (3) if the Federal Home Loan Bank of
San Francisco fails to announce the Eleventh District Index on or prior to
the particular Interest Determination Date for the calendar month
immediately preceding that Interest Determination Date, the Eleventh
District Cost of Funds Rate in effect on the particular Interest
Determination Date; provided that if no Eleventh District Cost of Funds
Rate is then in effect, the interest rate that will be effective as of the
next Interest Reset Date will be the Initial Interest Rate.
(F) Federal Funds Open Rate Notes. If the Interest Basis is the Federal Funds
Open Rate, the Notes shall be deemed to be "Federal Funds Open Rate Notes."
Federal Funds Open Rate Notes will bear interest at the interest rate
calculated with reference to the Federal Funds Open Rate and the Spread or
Spread Multiplier, if any. The Funding Note Calculation Agent will
determine the Federal Funds Open Rate on each applicable Interest
Determination Date. The Interest Determination Date is the related Interest
Reset Date. "Federal Funds Open Rate" means the rate set forth on Moneyline
Telerate Page 5 for an Interest Reset Date underneath the caption "FEDERAL
FUNDS" in the row titled "OPEN". If the rate is not available for an
Interest Reset Date, the rate for that Interest Reset Date shall be the
Federal Funds Rate as determined below.
(G) Federal Funds Rate Note. If the Interest Rate Basis is the Federal Funds
Rate, the Funding Note shall be deemed to be a "Federal Funds Rate Note". A
Federal Funds Rate Note will bear interest for each Interest Reset Date at
the interest rate calculated with reference to the Federal Funds Rate and
the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the Federal Funds Rate on each applicable Interest
Determination Date. The Interest Determination Date is the Business Day
immediately preceding the related Interest Reset Date. "Federal Funds Rate"
means (1) the rate on the particular Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the caption
"Federal Funds (Effective)" and displayed on Moneyline Telerate (or any
successor service) on page 120 (or any other page as may replace the
specified page on that service) ("Moneyline Telerate Page 120"), or (2) if
the rate referred to in clause (1) does not so appear on Moneyline Telerate
Page 120 or is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date for United States dollar federal funds as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Federal Funds
(Effective)", or (3) if the rate referred to in clause (2) is not so
published by 3:00 P.M., New York City time, on the related Funding Note
Calculation Date, the rate on the particular Interest Determination Date
calculated by the Funding Note Calculation Agent as the arithmetic mean of
the rates for the last transaction in overnight United States dollar
federal funds arranged by three leading brokers of United States dollar
federal funds transactions in The City of New York (which may include the
Agents or their affiliates), selected by the Funding Note Calculation Agent
prior to 9:00 A.M., New York City time, on that Interest Determination
Date, or (4) if the brokers so selected by the Funding Note Calculation
Agent are not quoting as mentioned in clause (3), the Federal Funds Rate in
effect on the particular Interest Determination Date; provided that if no
Federal Funds Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial Interest
Rate.
(H) LIBOR Note. If the Interest Rate Basis is LIBOR (as defined below), the
Funding Note shall be deemed to be a "LIBOR Note". A LIBOR Note will bear
interest for each Interest Period at the interest rate calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any. On each
applicable Interest Determination Date the Funding Note Calculation Agent
will determine LIBOR. The applicable Interest Determination Date is the
second London Banking Day preceding the related Interest Reset Date.
LIBOR means: (1) if "LIBOR Moneyline Telerate" is specified on the
face hereof or if neither "LIBOR Reuters" nor "LIBOR Moneyline
Telerate" is specified on the face hereof as the method for
calculating LIBOR, the rate for deposits in the LIBOR Currency (as
defined below) having the Index Maturity specified on the face hereof,
commencing on the related Interest Reset Date, that appears on the
LIBOR Page (as defined below) as of 11:00 A.M., London time, on the
particular Interest Determination Date, or (2) if "LIBOR Reuters" is
specified on the face hereof, the arithmetic mean of the offered
rates, calculated by the Funding Note Calculation Agent, or the
offered rate, if the LIBOR Page by its terms provides only for a
single rate, for deposits in the LIBOR Currency having the particular
Index Maturity, commencing on the related Interest Reset Date, that
appear or appears, as the case may be, on the LIBOR Page as of 11:00
A.M., London time, on the particular Interest Determination Date, or
(3) if fewer than two offered rates appear, or no rate appears, as the
case may be, on the particular Interest Determination Date on the
LIBOR Page as specified in clause (1) or (2), as applicable, the rate
calculated by the Funding Note Calculation Agent of at least two
offered quotations obtained by the Funding Note Calculation Agent
after requesting the principal London offices of each of four major
reference banks (which may include affiliates of the Agents), in the
London interbank market to provide the Funding Note Calculation Agent
with its offered quotation for deposits in the LIBOR Currency for the
period of the particular Index Maturity, commencing on the related
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on that Interest Determination
Date and in a principal amount that is representative for a single
transaction in the LIBOR Currency in that market at that time, or (4)
if fewer than two offered quotations referred to in clause (3) are
provided as requested, the rate calculated by the Funding Note
Calculation Agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial
Center, on the particular Interest Determination Date by three major
banks (which may include affiliates of the Agents), in that Principal
Financial Center selected by the Funding Note Calculation Agent for
loans in the LIBOR Currency to leading European banks, having the
particular Index Maturity and in a principal amount that is
representative for a single transaction in the LIBOR Currency in that
market at that time, or (5) if the banks so selected by the Funding
Note Calculation Agent are not quoting as mentioned in clause (4),
LIBOR in effect on the particular Interest Determination Date;
provided that if no LIBOR is then in effect, the interest rate that
will be effective as of the next Interest Reset Date will be the
Initial Interest Rate.
"LIBOR Currency" means the currency specified on the face hereof as to
which LIBOR shall be calculated or, if no currency is specified on the
face hereof, United States dollars.
"LIBOR Page" means either: if "LIBOR Reuters" is specified on the face
hereof as the method for calculating LIBOR, the display on the Reuter
Monitor Money Rates Service (or any successor service) on the page
specified on the face hereof (or any other page as may replace that
page on that service) for the purpose of displaying the London
interbank rates of major banks for the LIBOR Currency; or if "LIBOR
Moneyline Telerate" is specified on the face hereof or neither "LIBOR
Reuters" nor "LIBOR Moneyline Telerate" is specified on the face
hereof as the method for calculating LIBOR, the display on Moneyline
Telerate (or any successor service) on the page specified on the face
hereof (or any other page as may replace such page on such service)
for the purpose of displaying the London interbank rates of major
banks for the LIBOR Currency.
"London Banking Day" means a day on which commercial banks are open
for business (including dealings in the LIBOR Currency) in London.
(I) EURIBOR Note. If the Interest Rate Basis is EURIBOR (as defined below), the
Funding Note shall be deemed to be a "EURIBOR Note". A EURIBOR Note will
bear interest at the rates (calculated with references to the European
inter-bank offered rate for deposits in Euro, or "EURIBOR", and the Spread
and/or Spread Multiplier, if any) specified on the face hereof.
"EURIBOR" means, with respect to any Interest Determination Date
relating to a EURIBOR Note or if the Funding Note bears interest at a
floating rate for which the interest rate is determined with reference
to EURIBOR (a "EURIBOR Interest Determination Date"), the rate for
deposits in Euros as sponsored, calculated and published jointly by
the European Banking Federation and ACI--The Financial Market
Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, having the Index
Maturity specified on the face hereof, commencing on the applicable
Interest Reset Date, as the rate appears on Moneyline Telerate, Inc.,
or any successor service, on page 248 (or any other page as may
replace that specified page on the service) ("Moneyline Telerate Page
248") as of 11:00 A.M., Brussels time, on the applicable EURIBOR
Interest Determination Date. If such rate does not appear on Moneyline
Telerate Page 248, or is not so published by 11:00 A.M., Brussels
time, on the applicable EURIBOR Interest Determination Date, such rate
will be calculated by the Funding Note Calculation Agent and will be
the arithmetic mean of at least two quotations obtained by the Funding
Note Calculation Agent after requesting the principal Euro-zone (as
defined below) offices of four major banks in the Euro-zone interbank
market to provide the Funding Note Calculation Agent with its offered
quotation for deposits in Euros for the period of the Index Maturity
specified on the face hereof, commencing on the applicable Interest
Reset Date, to prime banks in the Euro-zone interbank market at
approximately 11:00 A.M., Brussels time, on the applicable EURIBOR
Interest Determination Date and in a principal amount not less than
the equivalent of $1 million in Euros that is representative for a
single transaction in Euro in the market at that time. If fewer than
two such quotations are so provided, the rate on the applicable
EURIBOR Interest Determination Date will be calculated by the Funding
Note Calculation Agent and will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR
Interest Determination Date by four major banks in the Euro-zone for
loans in Euro to leading European banks, having the Index Maturity
specified on the face hereof, commencing on the applicable Interest
Reset Date and in a principal amount not less than the equivalent of
$1 million in Euros that is representative for a single transaction in
Euros in the market at that time. If the banks so selected by the
Funding Note Calculation Agent are not quoting as mentioned above,
EURIBOR will be EURIBOR in effect on the applicable EURIBOR Interest
Determination Date; provided that if no EURIBOR is then in effect, the
interest rate that will be effective as of the next Interest Reset
Date will be the Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the
European Union that have adopted the single currency in accordance
with the Treaty Establishing the European Community, as amended by the
Treaty on European Union.
(J) Prime Rate Note. If the Interest Rate Basis is the Prime Rate, the Funding
Note shall be deemed to be a "Prime Rate Note". A Prime Rate Note will bear
interest for each Interest Reset Date calculated with reference to the
Prime Rate and the Spread or Spread Multiplier, if any, subject to the
Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on
the face hereof. The Funding Note Calculation Agent will determine the
Prime Rate for each Interest Reset Date on each applicable Interest
Determination Date. The Interest Determination Date is the Business Day
immediately preceding the related Interest Reset Date. "Prime Rate" means
(1) the rate on the particular Interest Determination Date as published in
H.15(519) under the caption "Bank Prime Loan", or (2) if the rate referred
to in clause (1) is not so published by 3:00 P.M., New York City time, on
the related Funding Note Calculation Date, the rate on the particular
Interest Determination Date as published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Bank Prime Loan", or (3) if the rate
referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on the related Funding Note Calculation Date, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen US PRIME 1 Page
(as defined below) as the applicable bank's prime rate or base lending rate
as of 11:00 A.M., New York City time, on that Interest Determination Date,
or (4) if fewer than four rates referred to in clause (3) are so published
by 3:00 P.M., New York City time, on the related Funding Note Calculation
Date, the rate on the particular Interest Determination Date calculated by
the Funding Note Calculation Agent as the arithmetic mean of the prime
rates or base lending rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on
that Interest Determination Date by three major banks (which may include
affiliates of the Agents) in The City of New York selected by the Funding
Note Calculation Agent, or (5) if the banks so selected by the Funding Note
Calculation Agent are not quoting as mentioned in clause (4), the Prime
Rate in effect on the particular Interest Determination Date; provided that
if no Prime Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial Interest
Rate. "Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service (or any successor service) on the "US PRIME 1"
page (or any other page as may replace that page on that service) for the
purpose of displaying prime rates or base lending rates of major United
States banks.
(K) Treasury Rate Note. If the Interest Rate Basis is the Treasury Rate, the
Funding Note shall be deemed to be a "Treasury Rate Note". A Treasury Rate
Note will bear interest for each Interest Reset Date at the interest rate
calculated with reference to the Treasury Rate and the Spread or Spread
Multiplier, if any. The Funding Note Calculation Agent will determine the
Treasury Rate on each Treasury Rate Determination Date (as defined below).
"Treasury Rate" means (1) the rate from the auction held on the Treasury
Rate Interest Determination Date (the "Auction") of direct obligations of
the United States ("Treasury Bills") having the Index Maturity specified on
the face hereof under the caption "INVESTMENT RATE" on the display on
Moneyline Telerate (or any successor service) on page 56 (or any other page
as may replace that page on that service) ("Moneyline Telerate Page 56") or
page 57 (or any other page as may replace that page on that service)
("Moneyline Telerate Page 57"), or (2) if the rate referred to in clause
(1) is not so published by 3:00 P.M., New York City time, on the related
Funding Note Calculation Date, the Bond Equivalent Yield (as defined below)
of the rate for the applicable Treasury Bills as published in H.15 Daily
Update, or another recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High", or (3) if the rate referred to in
clause (2) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the Bond Equivalent Yield of the
auction rate of the applicable Treasury Bills as announced by the United
States Department of the Treasury, or (4) if the rate referred to in clause
(3) is not so announced by the United States Department of the Treasury, or
if the Auction is not held, the Bond Equivalent Yield of the rate on the
particular Interest Determination Date of the applicable Treasury Bills as
published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market", or (5) if the rate referred to
in clause (4) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date of the applicable Treasury Bills as published in H.15
Daily Update, or another recognized electronic source used for the purpose
of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market", or (6) if the rate referred to
in clause (5) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on that Interest
Determination Date, of three primary United States government securities
dealers (which may include the Agents or their affiliates) selected by the
Funding Note Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face
hereof, or (7) if the dealers so selected by the Funding Note Calculation
Agent are not quoting as mentioned in clause (6), the Treasury Rate in
effect on the particular Interest Determination Date; provided that if no
Treasury Rate is then in effect, the interest rate that will be effective
as of the next Interest Reset Date will be the Initial Interest Rate.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D x N x 100
-----------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, "N" refers
to 365 or 366, as the case may be, and "M" refers to the actual number
of days in the applicable Interest Period.
The "Treasury Rate Determination Date" for each Interest Reset Date
means the day in the week in which the related Interest Reset Date
falls on which day Treasury Bills are normally auctioned (i.e.,
Treasury Bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that the auction may be
held on the preceding Friday); provided, however, that if an auction
is held on the Friday of the week preceding the related Interest Reset
Date, the Interest Determination Date will be the preceding Friday.
(L) Regular Floating Rate Note. Unless the Funding Note is designated as a
Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note, or as
having an Addendum attached or having other/additional provisions apply, in
each case relating to a different interest rate formula, the Funding Note
that bears interest at floating rates will be a Regular Floating Rate Note
and will bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases plus or minus the applicable
Spread, if any, and/or multiplied by the applicable Spread Multiplier, if
any. Commencing on the first Interest Reset Date, as specified on the face
hereof, the rate at which interest on a Regular Floating Rate Note is
payable will be reset as of each Interest Reset Date; provided, however,
that the interest rate in effect for the period, if any, from the date of
issue to the first Interest Reset Date will be the Initial Interest Rate.
(M) Floating Rate/Fixed Rate Note. If the Funding Note is designated as a
"Floating Rate/Fixed Rate Note" on the face hereof, the Funding Note that
bears interest at floating rates will bear interest at the rate determined
by reference to the applicable Interest Rate Basis or Bases plus or minus
the applicable Spread, if any, and/or multiplied by the applicable Spread
Multiplier, if any. Commencing on the first Interest Reset Date, the rate
at which interest on a Floating Rate/Fixed Rate Note is payable will be
reset as of each Interest Reset Date; provided, however, that the interest
rate in effect for the period, if any, from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate, as specified on the
face hereof; and the interest rate in effect commencing on the Fixed Rate
Commencement Date will be the Fixed Interest Rate, if specified on the face
hereof, or, if not so specified, the interest rate in effect on the day
immediately preceding the Fixed Rate Commencement Date.
(N) Inverse Floating Rate Note. If the Funding Note is designated as an
"Inverse Floating Rate Note" on the face hereof, the Inverse Floating Rate
shall be equal to the Fixed Interest Rate minus the rate determined by
reference to the applicable Interest Rate Basis or Bases plus or minus the
applicable Spread, if any, and/or multiplied by the applicable Spread
Multiplier, if any; provided, however, that interest on an Inverse Floating
Rate Note will not be less than zero. Commencing on the first Interest
Reset Date, the rate at which interest on an Inverse Floating Rate Note is
payable will be reset as of each Interest Reset Date; provided, however,
that the interest rate in effect for the period, if any, from the date of
issue to the first Interest Reset Date will be the Initial Interest Rate.
SECTION 4. Optional Redemption. If any Initial Redemption Date is specified on
the face hereof, Global Funding may redeem the Funding Note prior to the Initial
Maturity Date or the Maturity Date at its option on any Business Day on or after
the Date Initial Redemption in whole or from time to time in part in increments
of $1,000 or any other integral multiple of an authorized denomination specified
on the face hereof at the applicable Redemption Price (as defined below)
together with any unpaid interest accrued on the Funding Note, any Additional
Amounts and other amounts payable with respect thereto, as of the Redemption
Date. Unless otherwise specified in the Funding Note Indenture or on the face
hereof, Global Funding shall give a notice of such redemption to the Holder of
any portion of the Funding Note to be redeemed not more than 60 nor less than 30
days prior to the Redemption Date. "Redemption Price" means an amount equal to
the Initial Redemption Percentage specified on the face hereof (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) multiplied by the
unpaid principal amount of the Funding Note to be redeemed. The Initial
Redemption Percentage, if any, shall decline at each anniversary of the Initial
Redemption Date by an amount equal to the applicable Annual Redemption
Percentage Reduction, if any, until the Redemption Price is equal to 100% of the
unpaid amount the Funding Note to be redeemed.
SECTION 5. Sinking Funds and Amortizing Note. Unless otherwise specified on the
face hereof or unless the Funding Note is an Amortizing Note, the Funding Note
will not be subject to, or entitled to the benefit of, any sinking fund. If it
is specified on the face hereof that the Funding Note is an Amortizing Note,
Global Funding will make payments combining principal and interest on the dates
and in the amounts set forth in the table appearing in SCHEDULE I, attached to
this Funding Note Certificate. If the Funding Note is an Amortizing Note,
payments made on the Funding Note will be applied first to interest due and
payable on each such payment date and then to the reduction of the unpaid
principal amount.
SECTION 6. Optional Repayment. If so specified on the face hereof, the Holder or
Holders of the Funding Note may require Global Funding to repay the Funding Note
on the Optional Repayment Date(s) specified on the face hereof, in whole or from
time to time, in part, in increments of U.S.$1,000 or any other integral
multiple of an authorized denomination specified on the face hereof (provided
that any remaining principal amount of the Funding Note shall be at least
U.S.$1,000 or any other integral multiple of an authorized denomination
specified on the face hereof), at a repayment price equal to 100% of the unpaid
principal amount of the Funding Note to be repaid, together with unpaid interest
accrued thereon to the Repayment Date (as defined below) and any other amounts
then due and owing. For the Funding Note or any portion thereof to be so repaid,
the Funding Note Indenture Trustee must receive at its Corporate Trust Office
not more than 60 nor less than 30 calendar days prior to the applicable
Repayment Date, a properly completed Option to Elect Repayment form, which is
attached hereto as Annex A, forwarded by the Holder or Holders of the Funding
Note. Exercise of such repayment option shall be irrevocable. As used herein,
the term "Repayment Date" shall mean the date fixed for repayment in accordance
with the repayment provisions specified above.
SECTION 7. Tax Redemption. If (i) Global Funding is required at any time to pay
Additional Amounts (as defined below) or if Global Funding is obligated to
withhold or deduct any United States taxes with respect to any payment under the
Funding Note, as set forth in the Funding Note Certificate, or if there is a
material probability that Global Funding will become obligated to withhold or
deduct any such United States taxes or otherwise pay Additional Amounts (in the
opinion of independent legal counsel selected by the Funding Agreement
Provider), in each case pursuant to any change in or amendment to any United
States tax laws (or any regulations or rulings thereunder) or any change in
position of the Internal Revenue Service regarding the application or
interpretation thereof (including, but not limited to, the Funding Agreement
Provider's or Global Funding's receipt of a written adjustment from the Internal
Revenue Service in connection with an audit) (a "Tax Event"), and (ii) the
Funding Agreement Provider, pursuant to the terms of the relevant Funding
Agreement, has delivered to the Owner notice that the Funding Agreement Provider
intends to terminate the relevant Funding Agreement pursuant to the terms of
such Funding Agreement, then Global Funding will redeem the Funding Note on the
Redemption Date at the Redemption Price together with any unpaid interest
accrued thereon, any Additional Amounts and other amounts payable with respect
thereto, as of the Redemption Date.
Unless otherwise specified in the Funding Note Indenture or on the face
hereof, Global Funding shall give a notice of such redemption to the Holder of
the Funding Note to be redeemed not more than 75 days nor less than 30 days
prior to the Redemption Date; provided, that no such notice of redemption may be
given earlier than 90 days prior to the earliest day on which Global Funding
would become obligated to pay the applicable Additional Amounts were a payment
in respect of the Funding Note then due. Failure to give such notice to the
Holder of any portion of the Funding Note designated for redemption in whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other portion of the
Funding Note.
SECTION 8. Modifications and Amendments. The Funding Note Indenture contains
provisions permitting Global Funding and the Funding Note Indenture Trustee (1)
without the consent of any Holder, to execute Supplemental Funding Note
Indentures for limited purposes and take other actions set forth in the Funding
Note Indenture, and (2) with the consent of the Holder or Holders of not less
than 66 2/3% of the outstanding principal amount of the Funding Note, evidenced
as provided in the Funding Note Indenture, to execute Supplemental Funding Note
Indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Funding Note Indenture or any Supplemental Funding Note
Indenture or modifying in any manner the rights of the Holder or Holders of the
Funding Note subject to specified limitations.
SECTION 9. Obligations Unconditional. No reference herein to the Funding Note
Indenture and no provision of the Funding Note or of the Funding Note Indenture
shall alter or impair the obligation of Global Funding, which is absolute and
unconditional, to pay the principal of, interest on, or any other amount due and
owing with respect to, the Funding Note at the places, at the respective times,
at the rate, and in the coin or currency, herein prescribed.
SECTION 10. Collateral. Pursuant to the Funding Note Indenture, Global Funding
will grant a security interest in, pledge and collaterally assign the relevant
Funding Agreement(s) issued by the Funding Agreement Provider in connection with
the issuance of the Funding Note (each, a "Funding Agreement") to the Funding
Note Indenture Trustee. The Funding Note will be secured by the Security
Interest in the Collateral in favor of the Funding Note Indenture Trustee for
the benefit of each Holder of the Funding Note and each other person for whose
benefit the Funding Note Indenture Trustee is or will be holding the Collateral
(the "Secured Parties").
SECTION 11. Security; Limited Recourse. The Funding Note is solely the
obligation of Global Funding, and will not be guaranteed by any person,
including but not limited to the Funding Agreement Provider, any Allstate Life
Global Funding Trust, any Agent, the Global Funding Trust Beneficial Owner, the
Delaware Trustee, the Funding Note Indenture Trustee or any of their affiliates.
Global Funding's obligations under the Funding Note will be secured by all of
Global Funding's rights and title in one or more Funding Agreement(s) issued by
the Funding Agreement Provider and other rights and assets included in the
applicable Collateral. The Holder or Holders of the Funding Note have no direct
contractual rights against the Funding Agreement Provider under the Funding
Agreement(s). Under the terms of each Funding Agreement, recourse rights to the
Funding Agreement Provider will belong to Global Funding, its successors and
permitted assignees. Global Funding has pledged and collaterally assigned each
Funding Agreement to the Funding Note Indenture Trustee and has granted the
Security Interest in the Collateral to the Funding Note Indenture Trustee for
the benefit of the Secured Parties. Recourse to the Funding Agreement Provider
under each Funding Agreement will be enforceable only by the Funding Note
Indenture Trustee on behalf of the Secured Parties.
SECTION 12. Events of Default. If one or more Events of Default, as defined in
the Funding Note Indenture, shall have occurred and be continuing with respect
to the Funding Note, then, and in every such event, unless the principal of the
Funding Note shall have already become due and payable, the entire principal and
premium (if any) of the Funding Note, any interest accrued thereon, and any
Additional Amounts due and owing and any other amounts payable with respect
thereto, may be declared to be, and upon any such declaration the same shall
become immediately, due and payable; provided that, with respect to certain
Events of Default, without any notice to Global Funding or any other act by the
Funding Note Indenture Trustee or any Holder of the Funding Note, the entire
principal and premium (if any) of the Funding Note, any interest accrued
thereon, and any Additional Amounts due and owing, and any other amounts payable
with respect thereto, shall become immediately due and payable without
presentment, demand, protest or other notice of any kind. If the Funding Note is
a Discount Note, the amount of principal of the Funding Note that becomes due
and payable upon such acceleration shall be equal to the amount calculated as
set forth in Section 3 hereof.
SECTION 13. Withholding; Additional Amounts. All amounts due in respect of the
Funding Note will be made without withholding or deduction for or on account of
any present or future taxes, duties, levies, assessments or other governmental
charges of whatever nature imposed or levied by or on behalf of any governmental
authority in the United States having the power to tax payments on the Funding
Note unless the withholding or deduction is required by law. Unless otherwise
specified on the face hereof, Global Funding will not pay any Additional Amounts
to the Holders of the Funding Note in the event that any withholding or
deduction is so required by law, regulation or official interpretation thereof,
and the imposition of a requirement to make any such withholding or deduction
will not give rise to any independent right or obligation to redeem or repay the
Funding Note and shall not constitute an Event of Default.
SECTION 14. Listing. Unless otherwise specified on the face hereof, the Funding
Note will not be listed on any securities exchange.
SECTION 15. No Recourse. Notwithstanding anything to the contrary contained in
the Funding Note Indenture, or the Funding Note Certificate or Supplemental
Funding Note Indenture, none of the Funding Agreement Provider, its officers,
directors, affiliates, employees or agents, or any of the Delaware Trustee, the
Funding Note Indenture Trustee or the Global Funding Trust Beneficial Owner, or
any of their officers, directors, affiliates, employees or agents (the
"Non-recourse Parties") will be personally liable for the payment of any
principal, interest or any other sums at any time owing under the terms of the
Funding Note. If any Event of Default shall occur with respect to the Funding
Note, the right of the Holders of the Funding Note and the Funding Note
Indenture Trustee on behalf of such Holders in connection with a claim on the
Funding Note shall be limited solely to a proceeding against the Collateral.
Neither the Holders nor the Funding Note Indenture Trustee on behalf of the
Holders will have the right to proceed against the Non-recourse Parties to
enforce the Funding Note (except that to the extent they exercise their rights,
if any, to seize the relevant Funding Agreement, they may enforce the relevant
Funding Agreement against the Funding Agreement Provider) or for any deficiency
judgment remaining after foreclosure of any property included in the Collateral.
SECTION 16. Governing Law. Pursuant to Section 5-1401 of the General Obligations
Law of the State of New York, the Funding Note shall be governed by, and
construed in accordance with, the laws of the State of New York.
A-A-1
ANNEX A
OPTION TO ELECT REPAYMENT
The undersigned Holder of the Funding Note hereby irrevocably elects to
have Global Funding repay the principal amount of the Funding Note or portion
hereof at the optional repayment price in accordance with the terms of the
Funding Note.
Date: __________________________ __________________________________
Signature
Sign exactly as name appears on the front of this Note
Certificate [SIGNATURE GUARANTEED - required only if
Funding Note is to be issued and delivered to other than the
registered Holder]
Fill in for registration of Funding Note if to be
issued otherwise than to the registered
Principal amount to be repaid, if Holder:
amount to be repaid is less than the
principal amount of the Funding Note
represented by this Note Certificate
(principal amount remaining must be an
authorized denomination)
$ ------------------------
Name: _____________________
Address: _____________________
---------------------
(Please print name and address
including zip code)
Social Security or Other Taxpayer ID Number
S-A-1
SCHEDULE A
The initial aggregate principal amount of the Funding Note evidenced by
the Certificate to which this Schedule is attached is $750,000,000. The
notations on the following table evidence decreases in the aggregate principal
amount of the Funding Note evidenced by such Certificate:
---------------------------------------- -------------------------------------- --------------------------------------
Decreases in Principal Principal Amount of this Notation by Funding Note Registrar
Amount of this Funding Note Funding Note Remaining
After Such Decrease
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
S-I-1
SCHEDULE I
AMORTIZATION TABLE
Date Payment
--------------------------------------------------------------------------------
A-1
EXHIBIT A
Form of Election Notice
The undersigned hereby elects to extend the maturity of the Allstate
Life Global Funding Funding Note (CUSIP ▇▇▇▇▇▇▇▇▇) (the "Note") (or the portion
thereof specified below) with the effect provided in said Note by delivering
this Election Notice duly completed by the Holder of said Note, and in the event
of an election to extend the maturity of only a portion of the principal amount
of said Note, by surrendering said Note to:
▇.▇. ▇▇▇▇▇▇ Trust Company, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Worldwide Securities Services
or such other address of which the Issuer shall from time to time notify the
holders of the Notes.
If the option to extend the maturity of less than the entire principal
amount of said Note is elected, specify the portion of said Note (which shall be
$1,000 or an integral multiple of $1,000 in excess thereof) as to which the
holder elects to extend the maturity: $__________; and specify the denomination
or denominations (which shall be $1,000 or an integral multiple of $1,000 in
excess thereof) of the Notes in the form attached to said Note as Exhibit B to
be issued to the holder for the portion of said Note to which the option to
extend the maturity is not being elected (in absence of any such specification
one such Note in the form of said Exhibit B will be issued for the portion as to
which the option to extend maturity is not being made): $___________.
Dated: __________________________ __________________________________
NOTICE: The signature on this Election Notice must
correspond with the name as written upon the face of the Note in every
particular, without alteration or enlargement or any change whatever.
B-1
EXHIBIT B
FORM OF SECURITY FOR
FUNDING NOTE RELATED TO SECURED MEDIUM TERM NOTES ISSUES UNDER THE
SECURED MEDIUM TERM NOTES PROGRAM
FACE OF SECURITY
CUSIP No.:
ALLSTATE LIFE GLOBAL FUNDING
FUNDING NOTE
Title of Funding Note: Short-Term Funding Note due [ ] Stated Maturity Date:
Trust: ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: $
(or principal amount of foreign or composite
currency)
Original Issue Date:
Interest Rate or Formula:
Fixed Rate Note: [ ] Yes [X] No. If yes, Floating Rate Note: [X] Yes [ ] No. If yes,
Interest Rate: Regular Floating Rate Note: [X]
Interest Payment Dates: Floating Rate/Fixed Rate Note: [ ]
Day Count Convention: Inverse Floating Rate Note: [ ]
Additional/Other Terms: Interest Rate:
Amortizing Note: [ ] Yes [X] No. If yes, Interest Rate Basis(es):
Amortization Schedule: CD Rate [ ]
Additional/Other Terms: CMT Rate [ ]
Discount Note: [ ] Yes [X] No. If yes, Commercial Paper Rate [ ]
Total Amount of Discount: Constant Maturity Swap Rate [ ]
Initial Accrual Period of Discount: Eleventh District Cost of Funds Rate [ ]
Interest Payment Dates: Federal Funds Open Rate [ ]
Additional/Other Terms: Federal Funds Rate [ ]
Redemption Provisions: [X] Yes [ ] No. If yes, LIBOR [X]
Initial Redemption Date: EURIBOR [ ]
Initial Redemption Percentage: Prime Rate [ ]
Annual Redemption Percentage Reduction, Treasury Rate [ ]
if any: If LIBOR:
Additional/Other Terms: see below [X] LIBOR Moneyline Telerate:
Repayment Provisions: [ ] Yes [X] No. If yes, [ ] LIBOR Reuters:
Optional Repayment Date(s): LIBOR Currency: U.S. Dollars
Optional Repayment Price: If CMT Rate:
Additional/Other Terms: Designated CMT MoneylineTelerate Page:
Regular Interest Record Date(s): 15 calendar days prior to
each Interest Payment Date If CMT MoneylineTelerate Page 7052:
Sinking Fund, if any: [ ] Weekly Average
Specified Currency: U.S. Dollars [ ] Monthly Average
Exchange Rate Agent: Designated CMT Maturity Index:
Funding Note Calculation Agent: ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association Index Maturity: One month
Authorized Denominations: $1,000 Spread (+/-), if any:
Collateral: The right, title and interest of the Trust in and
to: Spread Multiplier, if any: Not applicable
(i) Allstate Life Insurance Company Funding Agreement No. Initial Interest Rate, if any:
FA-41092; (ii) all proceeds in respect of such Funding
Agreement(s); and (iii) all books and records
(including, without limitation, computer programs,
printouts, and other computer materials and files)
pertaining to such Funding Agreement(s).
Additional Amounts to be Paid for Withholding Tax: Initial Interest Reset Date:
[ ] Yes [X] No Interest Reset Dates: The 4th of each month; provided
that if any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date
shall be the immediately succeeding Business Day,
except that, if such Business Day is in the succeeding
calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. However, this
convention will not extend beyond the Stated Maturity
Date.
Business Day: Any day, other than a Saturday or Sunday, that Interest Determination Date(s): The second London
is neither a legal holiday nor a day on which commercial Banking day preceding the related Interest Reset
banks are authorized or required by law, regulation or Date.
executive order to close in London and New York, New York.
Interest Payment Dates: The 4th of each
month; provided that if any Interest
Payment Date would otherwise be a day that
is not a Business Day, such Interest
Payment Date shall be the immediately
succeeding Business Day, except that, if
such Business Day is in the succeeding
calendar month, such Interest Payment
shall be the immediately preceding Business
Day. However, this convention will
not extend beyond the Stated Maturity Date.
The final Interest Payment Date for
the Funding Note represented by this
Funding Note Certificate, will be the
Stated Maturity Date and interest for the
final Interest Period will accrue from
and including the Interest Payment Date
immediately preceding such maturity date
to but excluding the Stated Maturity Date.
Maximum Interest Rate, if any: Not applicable
Minimum InterestRate, if any: Not applicable
Fixed Rate Commencement Date, if any: Not applicable
Floating Interest Rate,if any:
Fixed Interest Rate, if any: Not applicable
Day Count Convention: As specified on the reverse hereof
Redemption Price: 100%
Contingent Redemption: Global Funding
may redeem the principal amount of this
Funding Note on each Interest Payment Date
other than the Stated Maturity Date
of this Funding Note (each, a "Contingent
Redemption Date"), in whole or in
part, in increments of $1,000 at the
Redemption Price together with any unpaid
interest accrued thereon, up to but
excluding the applicable Contingent
Redemption Date.
Notice of Redemption: The Issuer shall
give written notice of redemption to each
holder of the Funding Note to be redeemed
not more than 20 days nor less than 15
days prior to the applicable Contingent
Redemption Date.
Additional/Other Terms:
This note certificate (the "Funding Note Certificate") represents a
duly authorized funding note (the "Funding Note") of Allstate Life Global
Funding, a statutory trust organized under the laws of the State of Delaware
("Global Funding"). The Funding Note is being issued in connection with the
issuance and sale by the trust specified above (the "Trust") of the trust notes
identified on Annex A to that certain series instrument to which Global Funding
and the Trust are parties (the "Series Instrument") (the "Trust Notes"). The
Funding Note is being issued under the Funding Note Indenture, effective as of
the date hereof (as amended or supplemented from time to time, the "Funding Note
Indenture") among Global Funding and the other persons specified therein.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed in the Standard Funding Note Indenture Terms, which
are incorporated by reference in and form a part of the Funding Note Indenture
(as amended or supplemented from time to time, the "Standard Funding Note
Indenture Terms").
Subject to the immediately following paragraph, Global Funding, for
value received, hereby promises to pay to the Holder or Holders of the Funding
Note on the Maturity Date (as defined below) (or on the date of redemption or
repayment by Global Funding) the principal amount of the Funding Note and, if so
specified above, to pay interest from time to time on the Funding Note from the
Original Issue Date specified above (the "Original Issue Date") or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for at the rate per annum determined in accordance with the provisions on the
reverse hereof and as specified above, until the principal of the Funding Note
is paid or made available for payment and to pay such other amounts due and
owing with respect to the Funding Note.
This Funding Note Certificate shall be surrendered for cancellation by
or on behalf of the Trust, and shall be cancelled by the Funding Note Indenture
Trustee, immediately upon the assignment by Global Funding to, or as directed
by, the Trust of each funding agreement identified on Exhibit A to the Closing
Instrument (each, a "Funding Agreement") in accordance with the terms of the
Funding Note and the Coordination Agreement, and such cancellation shall operate
as a redemption and satisfaction of the Funding Note.
On any exchange or purchase and cancellation of the Funding Note,
details of such exchange or purchase and cancellation shall be entered in the
records of Global Funding. Upon any such exchange or purchase and cancellation,
the principal amount of the Funding Note shall be charged by the principal
amount so exchanged or purchased and cancelled, as provided in the Standard
Funding Note Indenture Terms.
Unless otherwise set forth above, if the Funding Note is subject to an
Annual Redemption Percentage Reduction as specified above, the Redemption Price
of the portion of the Funding Note represented by this Funding Note Certificate
shall initially be the Initial Redemption Percentage of the principal amount of
the portion of the Funding Note represented by this Funding Note Certificate on
the Initial Redemption Date and shall decline at each anniversary of the Initial
Redemption Date (each such date, a "Redemption Date") by the Annual Redemption
Percentage Reduction of such principal amount until the Redemption Price is 100%
of such principal amount.
The Funding Note will mature on the earlier of the Stated Maturity Date
and the Maturity Date (as defined in the Trust Notes) of the Trust Notes (the
"Trust Notes Maturity Date"), unless its principal (or, any installment of its
principal) becomes due and payable prior to any such date, whether, as
applicable, by the declaration of acceleration of maturity, notice of redemption
at the option of Global Funding, notice of the Holder's option to elect
repayment or otherwise (the Stated Maturity Date, the Trust Notes Maturity Date
or any date prior to any such date on which the Funding Note becomes due and
payable, as the case may be, are referred to as the "Maturity Date" with respect
to principal of the Funding Note repayable on such date).
Unless otherwise provided above and except as provided in the following
paragraph, Global Funding will pay interest on each Interest Payment Date
specified above, commencing with the first Interest Payment Date next succeeding
the Original Issue Date, and on the Maturity Date; provided that any payment of
principal, premium, if any, interest or other amounts to be made in accordance
with the provisions set forth on the reverse hereof.
Unless otherwise specified above, the interest payable on each Interest
Payment Date or on the Maturity Date will be the amount equal to the interest
accrued from and including the immediately preceding Interest Payment Date in
respect of which interest has been paid or from and including the date of issue,
if no interest has been paid, to but excluding the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period").
Reference is hereby made to the further provisions of the Funding Note
set forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall for all purposes have the same
force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to the Funding Note as specified above, the
Funding Note shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
The Funding Note or the portion thereof represented by this Funding
Note Certificate shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been executed by the Funding
Note Indenture Trustee pursuant to the Funding Note Indenture.
IN WITNESS WHEREOF, Global Funding has caused this instrument to be
duly executed on its behalf.
Dated: Original Issue Date ALLSTATE LIFE GLOBAL FUNDING,
as Issuer
By:
------------------------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This Funding Note Certificate is one of the Funding Note Certificates
representing the Funding Note described in the within-mentioned Funding Note
Indenture.
Dated: Original Issue Date ▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL ASSOCIATION,
as Funding Note Indenture Trustee
By:
------------------------------------------------------
Authorized Signatory
REVERSE OF DEFINITIVE SECURITY
SECTION 1. General. This Funding Note is being issued pursuant to the Funding
Note Indenture in connection with the issuance and sale by the Trust of the
Trust Notes. The Funding Note shall be surrendered for cancellation by or on
behalf of the Trust, and shall be cancelled by the Funding Note Indenture
Trustee, immediately upon the assignment by Global Funding to, or as directed
by, the Trust of each Funding Agreement, and such cancellation shall operate as
a redemption of the Funding Note.
SECTION 2. Currency. The Funding Note is denominated in, and payments of
principal of, premium, if any, and interest on, if any, and other amounts in
respect of, the Funding Note will be in the Specified Currency designated on the
face hereof. If the specified currency of the Funding Note is other than U.S.
Dollars (or "Foreign Currency Note"), any amounts so payable by Global Funding
in the Specified Currency will be converted by the exchange rate agent
designated on the face hereof (the "Exchange Rate Agent") into United States
dollars for payment to the registered holders hereof unless otherwise specified
on the face hereof or a registered holder elects, in the manner described below,
to receive payments in the Specified Currency.
If the Specified Currency for a Foreign Currency Note is not available
for any required payment of principal, premium, if any, and/or interest, if any,
due to the imposition of exchange controls or other circumstances beyond the
control of Global Funding, Global Funding will be entitled to satisfy the
obligations to the registered holders of the Foreign Currency Note by making
payments in United States dollars based on the highest bid quotation in The City
of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by Global Funding
for the purchase by the quoting dealer of the Specified Currency for United
States dollars for settlement on that payment date in the aggregate amount of
the Specified Currency payable to all registered holders of the Foreign Currency
Note scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the relevant registered holders of the Foreign Currency Note by
deductions from any payments. If three bid quotations are not available,
payments will be made in the Specified Currency.
Registered holders of a Foreign Currency Note may elect to receive all
or a specified portion of any payment of principal, premium, if any, and/or
interest, if any, in the Specified Currency by submitting a written request to
the Funding Note Indenture Trustee at its corporate trust office in The City of
New York on or prior to the applicable Regular Interest Record Date or at least
fifteen calendar days prior to the Maturity Date, as the case may be. This
written request may be mailed or hand delivered or sent by cable, telex or other
form of facsimile transmission. This election will remain in effect until
revoked by written notice delivered to the Funding Note Indenture Trustee on or
prior to a Regular Interest Record Date or at least fifteen calendar days prior
to the Maturity Date, as the case may be. Registered holders of a Foreign
Currency Note to be held in the name of a broker or nominee should contact their
broker or nominee to determine whether and how an election to receive payments
in the Specified Currency may be made.
Unless otherwise specified on the face hereof, if the Specified
Currency is other than United States dollars, if the Holder hereof elects to
receive payments of principal, premium, if any, and/or interest, if any, in the
Specified Currency, the Holder must notify the Funding Note Indenture Trustee of
that election on or prior to the fifth Business Day after the applicable Regular
Interest Record Date or at least ten calendar days prior to the Maturity Date,
as the case may be. If complete instructions are received by the Funding Note
Indenture Trustee on or prior to such dates, then the Holder will receive
payments in the Specified Currency.
Unless otherwise specified on the face hereof, if payment in the
Specified Currency hereon is not available to Global Funding for any required
payment of principal, premium, if any, and/or interest, if any, due to the
imposition of exchange controls or other circumstances beyond Global Funding's
control, then Global Funding will be entitled to satisfy its obligations by
making payments in United States dollars on the basis of the Market Exchange
Rate, computed by the Exchange Rate Agent as described above, on the second
Business Day prior to the particular payment or, if the Market Exchange Rate is
not then available, on the basis of the most recently available Market Exchange
Rate. The "Market Exchange Rate" for a Specified Currency other than United
States dollars means the noon dollar buying rate in The City of New York for
cable transfers for the Specified Currency as certified for customs purposes
(or, if not so certified, as otherwise determined) by the Federal Reserve Bank
of New York. Any payment in respect hereof made under such circumstances in U.S.
Dollars will not constitute an Event of Default under the Funding Note
Indenture.
In the event that a member state of the European Union in whose
national currency the Funding Note is denominated becomes a participant member
in the third stage of the European economic and monetary union, Global Funding
may on or after the date of such occurrence, without the consent of any Holder
hereof, redenominate all, but not less than all, of the Principal amount of the
Funding Note represented hereby.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and, in the absence of manifest error, shall be
conclusive for all purposes and binding on any Holder hereof.
All currency exchange costs will be borne by the Holder hereof by
deduction from the payments made hereon.
SECTION 3. Determination of Interest Rate and Other Payment Provisions.
Fixed Rate Note. If the Funding Note is designated on the face hereof
as a "Fixed Rate Note," the Funding Note will bear interest from the Original
Issue Date until the Maturity Date. Unless otherwise specified on the face
hereof, the rate of interest payable on the Funding Note will not be adjusted;
unless otherwise specified on the face hereof, interest will be payable on the
Interest Payment Dates set forth on the face hereof and at the Maturity Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. If any Interest Payment Date or the Maturity Date of a Fixed Rate Note
falls on a day that is not a Business Day, any payments of principal, premium,
if any, and/or interest or other amounts required to be made, will be made on
the next succeeding Business Day, and no additional interest will accrue in
respect of the payment made on that next succeeding Business Day.
Discount Note. If the Funding Note is designated on the face hereof as
a "Discount Note" (as defined below), payments in respect of the Funding Note
shall be made as set forth on the face hereof. In the event a Discount Note is
redeemed, repaid or accelerated, the amount payable to the Holder of the
Discount Note will be equal to the sum of: (1) the Issue Price (increased by any
accruals of discount) and, in the event of any redemption of the Discount Note,
if applicable, multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable); and (2) any unpaid
interest accrued on the Discount Note to the date of redemption, repayment or
acceleration of maturity, as applicable. For purposes of determining the amount
of discount that has accrued as of any date on which a redemption, repayment or
acceleration of maturity of the Funding Note occurs for a Discount Note, the
discount will be accrued using a constant yield method. The constant yield will
be calculated using a 30-day month, 360-day year convention, a compounding
period that, except for the Initial Period (as defined below), corresponds to
the shortest period between Interest Payment Dates for a Discount Note (with
ratable accruals within a compounding period), a coupon rate equal to the
initial coupon rate applicable to a Discount Note and an assumption that the
maturity of such Discount Note will not be accelerated. If the period from the
date of issue to the first Interest Payment Date for a Discount Note (the
"Initial Period") is shorter than the compounding period for such Discount Note,
a proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then the
period will be divided into a regular compounding period and a short period with
the short period being treated as provided in the preceding sentence. The
accrual of the applicable discount may differ from the accrual of original issue
discount for purposes of the Code, certain Discount Notes may not be treated as
having original issue discount within the meaning of the Code, and certain
Funding Notes other than Discount Notes may be treated as issued with original
issue discount for federal income tax purposes. The Funding Note is a "Discount
Note" if its Issue Price is less than 100% of the principal amount thereof by
more than a percentage equal to the product of 0.25% and the number of full
years to the Stated Maturity Date. A Discount Note may not bear any interest
currently or may bear interest at a rate that is below market rates at the time
of issuance.
Amortizing Note. If the Funding Note is specified on the face hereof as
an "Amortizing Note," the Funding Note shall bear interest at the rate set forth
on the face hereof, and payments of principal and interest shall be made as set
forth on the face hereof and/or in accordance with SCHEDULE I attached hereto.
Unless otherwise specified on the face hereof, interest on the Funding Note will
be computed on the basis of a 360-day year of twelve 30-day months. Payments
with respect to an Amortizing Note will be applied first to interest due and
payable on the Funding Note and then to the reduction of the unpaid principal
amount of the Funding Note.
Floating Rate Note. If the Funding Note is specified on the face hereof
as a "Floating Rate Note," interest on the Funding Note shall accrue and be
payable in accordance with this Section 3. A Floating Rate Note may be a CD Rate
Note, CMT Rate Note, Commercial Paper Rate Note, Constant Maturity Swap Rate
Note, Eleventh District Cost of Funds Rate Note, Federal Funds Open Rate Note,
Federal Funds Rate Note, LIBOR Note, EURIBOR Note, Prime Rate Note or Treasury
Rate Note. If the Funding Note is designated on the face hereof as a Floating
Rate Note, the face hereof will specify whether the Funding Note is a Regular
Floating Rate Note, Inverse Floating Rate Note or Floating Rate/Fixed Rate Note.
For the period from the date of issue to, but not including, the first Interest
Reset Date set forth on the face hereof, the interest rate hereon shall be the
Initial Interest Rate specified on the face hereof. Thereafter, the interest
rate hereon will be reset as of and be effective as of each Interest Reset Date.
(A) If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next day that is a
Business Day; provided, however, that if the Funding Note is a LIBOR Note
or a EURIBOR Note and such Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the Business Day immediately
preceding such Interest Reset Date.
(B) Unless specified otherwise on the face hereof, Interest Reset Dates are as
follows: (1) if the Funding Note resets daily, each Business Day; (2) if
the Funding Note resets weekly, other than Treasury Rate Note, the
Wednesday of each week; (3) if the Funding Note is a Treasury Rate Note
that resets weekly, and except as provided below under "Treasury Rate
Note," the Tuesday of each week; (4) if the Funding Note resets monthly,
the third Wednesday of each month, unless the Eleventh District Cost of
Funds Rate is the Interest Rate Basis (as defined below) applicable to the
Funding Note, in which case the Funding Note will reset the first calendar
day of the month; (5) if the Funding Note resets quarterly, the third
Wednesday of every third calendar month, beginning in the third calendar
month following the month in which the Notes were issued; (6) if the
Funding Note resets semiannually, the third Wednesday of each of the two
months specified on the face hereof; and (7) if the Funding Note resets
annually, the third Wednesday of the month specified on the face hereof;
provided, however, that with respect to a Floating Rate/Fixed Rate Note,
the rate of interest thereon will not reset after the particular Fixed Rate
Commencement Date specified on the face hereof (the "Fixed Rate
Commencement Date").
(C) Accrued interest is calculated by multiplying the principal amount of the
Floating Rate Note by an accrued interest factor. The accrued interest
factor is computed by adding the interest factor calculated for each day in
the particular Interest Period. The interest factor for each day will be
computed by dividing the interest rate applicable to such day by 360, in
the case of a Floating Rate Note as to which the CD Rate, the Commercial
Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds
Open Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an
applicable Interest Rate Basis, or by the actual number of days in the
year, in the case of a Floating Rate Note as to which the CMT Rate or the
Treasury Rate is an applicable Interest Rate Basis. In the case of a
Floating Rate Note as to which the Constant Maturity Swap Rate is the
Interest Rate Basis, the interest factor will be computed by dividing the
number of days in the interest period by 360 (the number of days to be
calculated on the basis of a year of 360 days with 12 30-day months (unless
(i) the last day of the interest period is the 31st day of a month but the
first day of the interest period is a day other than the 30th or 31st day
of a month, in which case the month that includes that last day shall not
be considered to be shortened to a 30-day month, or (ii) the last day of
the interest period is the last day of the month of February, in which case
the month of February shall not be considered to be lengthened to a 30-day
month)). The interest factor for a Floating Rate Note as to which the
interest rate is calculated with reference to two or more Interest Rate
Bases will be calculated in each period in the same manner as if only the
applicable Interest Rate Basis specified on the face hereof applied. The
interest rate shall be set forth on the face hereof. For purposes of making
the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on that date. Unless
otherwise specified on the face hereof, the interest rate that is effective
on the applicable Interest Reset Date will be determined on the applicable
Interest Determination Date and calculated on the applicable Funding Note
Calculation Date (as defined below).
"Funding Note Calculation Date" means the date by which the Funding
Note Calculation Agent designated on the face hereof, is to calculate
the interest rate which will be the earlier of (1) the tenth calendar
day after the particular Interest Determination Date or, if such day
is not a Business Day, the next succeeding Business Day; or (2) the
Business Day immediately preceding the applicable Interest Payment
Date or the Maturity Date, as the case may be.
(D) Unless otherwise specified on the face hereof, all percentages resulting
from any calculation on a Floating Rate Note will be rounded to the nearest
one hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards. All dollar amounts used in or resulting
from any calculation on a Floating Rate Note will be rounded, in the case
of United States dollars, to the nearest cent or, in the case of a foreign
currency, to the nearest unit (with one-half cent or unit being rounded
upwards).
(E) Unless otherwise specified on the face hereof, if the Funding Note is
designated on the face hereof as a Floating Rate Note, if any Interest
Payment Date (other than the Maturity Date for the Funding Note) would
otherwise be a day that would not be a Business Day, such Interest Payment
Date would be postponed to the next succeeding Business Day; provided,
however, that if the Funding Note is a LIBOR Note or a EURIBOR Note and
such Business Day is in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day. Unless
otherwise specified on the face hereof, if the Funding Note is designated
on the face hereof as a Floating Rate Note, if the Maturity Date of the
Funding Note falls on a day this is not a Business Day, Global Funding will
make the required payment of principal, premium, if any, and interest or
other amounts on the next succeeding Business Day, and no additional
interest will accrue in respect of the payment made on that next succeeding
Business Day.
Unless otherwise specified on the face hereof and except as provided
below, interest will be payable as follows: (1) if the Interest Reset Date for
the Funding Note is daily, weekly or monthly, interest will be payable on the
third Wednesday of each month or on the third Wednesday of every third calendar
month, beginning in the third calendar month following the month in which the
Notes were issued, as specified on the face hereof, (2) if the Interest Reset
Date for the Funding Note is quarterly, interest will be payable on the third
Wednesday of every third calendar month, beginning in the third calendar month
following the month in which the Notes were issued, (3) if the Interest Reset
Date for the Funding Note is semiannually, interest will be payable on the third
Wednesday of each of two months of each year specified on the face hereof, (4)
if the Interest Reset Date for the Funding Note is annually, interest will be
payable on the third Wednesday of the month of each year specified on the face
hereof. In each of these cases, the Maturity Date will also be an Interest
Payment Date.
If specified on the face hereof, the Funding Note may have either or
both of a Maximum Interest Rate or Minimum Interest Rate. If a Maximum Interest
Rate is so designated, the interest rate that may accrue during any Interest
Period for a Floating Rate Note cannot ever exceed such Maximum Interest Rate
and in the event that the interest rate on any Interest Reset Date would exceed
such Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then
the interest rate on such Interest Reset Date shall be the Maximum Interest
Rate. If a Minimum Interest Rate is so designated, the interest rate that may
accrue during any Interest Period for a Floating Rate Note cannot ever be less
than such Minimum Interest Rate and in the event that the interest rate on any
Interest Reset Date would be less than such Minimum Interest Rate (as if no
Minimum Interest Rate were in effect) then the interest rate on such Interest
Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the
contrary contained herein, if the Funding Note is designated on the face hereof
as a Floating Rate Note, the interest rate on the Funding Note shall not exceed
the maximum interest rate permitted by applicable law.
All determinations of interest by the Funding Note Calculation Agent
designated on the face hereof will, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of the Funding Note and
neither the Funding Note Indenture Trustee nor the Funding Note Calculation
Agent shall have any liability to the Holder of the Funding Note in respect of
any determination, calculation, quote or rate made or provided by the Funding
Note Calculation Agent. Upon request of the Holder of the Funding Note, the
Funding Note Calculation Agent will provide the interest rate then in effect
and, if determined, the interest rate that will become effective on the next
Interest Reset Date with respect to the Funding Note. If the Funding Note
Calculation Agent is incapable or unwilling to act as such or if the Funding
Note Calculation Agent fails duly to establish the interest rate for any
interest accrual period or to calculate the interest amount or any other
requirements, Global Funding will appoint a successor to act as such in its
place. The Funding Note Calculation Agent may not resign its duties until a
successor has been appointed and such successor has accepted its appointment.
Subject to applicable provisions of law and except as specified herein,
on each Interest Reset Date, the rate of interest on the Funding Note on and
after the first Interest Reset Date shall be the interest rate determined in
accordance with the provisions of the heading below which has been designated as
the Interest Rate Basis on the face hereof (the "Interest Rate Basis"), the base
rate, plus or minus the Spread, if any, specified on the face hereof and/or
multiplied by the Spread Multiplier, if any, specified on the face hereof.
(A) CD Rate Note. If the Interest Rate Basis is the CD Rate, the Funding Note
shall be deemed to be a "CD Rate Note". A CD Rate Note will bear interest
at the interest rate calculated with reference to the CD Rate and the
Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the CD Rate on each Interest Determination Date. The
Interest Determination Date is the second Business Day preceding the
related Interest Reset Date.
"CD Rate" means: (1) the rate on the particular Interest Determination
Date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the caption "CDs (secondary
market)"; or (2) if the rate referred to in clause (1) is not so
published by 3:00 P.M., New York City time, on the related Funding
Note Calculation Date, the rate on the particular Interest
Determination Date for negotiable United States dollar certificates of
the particular Index Maturity as published in the H.15 Daily Update
(as defined below) or other recognized electronic source used for the
purpose of displaying the applicable rate under the heading "CDs
(secondary market)"; or (3) if the rate referred to in clause (2) is
not yet published in either H.15(519) or the H.15 Daily Update by 3:00
P.M., New York City time, on the related Funding Note Calculation
Date, then the CD Rate will be the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent as
the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time on that Interest Determination Date of three
leading nonbank dealers in negotiable United States dollar
certificates of deposit in The City of New York (which may include the
Agents or their affiliates) selected by the Funding Note Calculation
Agent for negotiable United States dollar certificates of deposit of
major United States money market banks for negotiable United States
certificates of deposit with a remaining maturity closest to the
particular Index Maturity in an amount that is representative for a
single transaction in that market at that time; or (4) if the dealers
so selected by the Funding Note Calculation Agent are not quoting as
mentioned in clause (3), the CD Rate in effect on the particular
Interest Determination Date; provided that if no CD Rate is then in
effect, the interest rate that will be effective as of the next
Interest Reset Date will be the Initial Interest Rate.
"H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of
Governors of the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519),
available through the world-wide-web site of the Board
of Governors of the Federal Reserve System at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇/▇▇▇▇▇▇, or any successor
site or publication.
(B) CMT Rate Note. If the Interest Basis is the CMT Rate, the Funding Note
shall be deemed to be a "CMT Rate Note". A CMT Rate Note will bear interest
at the interest rate calculated with reference to the CMT Rate and the
Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the CMT Rate on each applicable Interest Determination Date.
The applicable Interest Determination Date is the second Business Day prior
to the Interest Reset Date.
"CMT Rate" means: (1) if CMT Moneyline Telerate Page 7051 is specified
on the face hereof: (a) the percentage equal to the yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified on the face hereof as published in H.15(519) under
the caption "Treasury Constant Maturities", as the yield is displayed
on Moneyline Telerate (or any successor service) on page 7051 (or any
other page as may replace the specified page on that service)
("Moneyline Telerate Page 7051"), for the particular Interest
Determination Date; or (b) if the rate referred to in clause (a) does
not so appear on Moneyline Telerate Page 7051, the percentage equal to
the yield for United States Treasury securities at "constant maturity"
having the particular Index Maturity and for the particular Interest
Determination Date as published in H.15(519) under the caption
"Treasury Constant Maturities"; or (c) if the rate referred to in
clause (b) does not so appear in H.15(519), the rate on the particular
Interest Determination Date for the period of the particular Index
Maturity as may then be published by either the Federal Reserve System
Board of Governors or the United States Department of the Treasury
that the Funding Note Calculation Agent determines to be comparable to
the rate which would otherwise have been published in H.15(519); or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent as a yield to maturity based on the
arithmetic mean of the secondary market bid prices at approximately
3:30 P.M., New York City time, on that Interest Determination Date of
three leading primary United States government securities dealers in
The City of New York (which may include the Agents or their
affiliates) (each, a "Reference Dealer"), selected by the Funding Note
Calculation Agent from five Reference Dealers selected by the Funding
Note Calculation Agent and eliminating the highest quotation, or, in
the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity equal to the particular
Index Maturity, a remaining term to maturity no more than one year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that
market at that time; or (e) if fewer than five but more than two of
the prices referred to in clause (d) are provided as requested, the
rate on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the
quotations shall be eliminated; or (f) if fewer than three prices
referred to in clause (d) are provided as requested, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as a yield to maturity based on the arithmetic mean
of the secondary market bid prices as of approximately 3:30 P.M., New
York City time, on that Interest Determination Date of three Reference
Dealers selected by the Funding Note Calculation Agent from five
Reference Dealers selected by the Funding Note Calculation Agent and
eliminating the highest quotation or, in the event of equality, one of
the highest and the lowest quotation or, in the event of equality, one
of the lowest, for United States Treasury securities with an original
maturity greater than the particular Index Maturity, a remaining term
to maturity closest to that Index Maturity and in a principal amount
that is representative for a single transaction in the securities in
that market at that time; or (g) if fewer than five but more than two
prices referred to in clause (f) are provided as requested, the rate
on the particular Interest Determination Date calculated by the
Funding Note Calculation Agent based on the arithmetic mean of the bid
prices obtained and neither the highest nor the lowest of the
quotations will be eliminated; or (h) if fewer than three prices
referred to in clause (f) are provided as requested, the CMT Rate in
effect on the particular Interest Determination Date; provided that if
no CMT Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial
Interest Rate; or (2) if CMT Moneyline Telerate Page 7052 is specified
on the face hereof: (a) the percentage equal to the one-week or
one-month, as specified on the face hereof, average yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified on the face hereof as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is
displayed on Moneyline Telerate (or any successor service) (on page
7052 or any other page as may replace the specified page on that
service) ("Moneyline Telerate Page 7052"), for the week or month, as
applicable, ended immediately preceding the week or month, as
applicable, in which the particular Interest Determination Date falls;
or (b) if the rate referred to in clause (a) does not so appear on
Moneyline Telerate Page 7052, the percentage equal to the one-week or
one-month, as specified on the face hereof, average yield for United
States Treasury securities at "constant maturity" having the
particular Index Maturity and for the week or month, as applicable,
preceding the particular Interest Determination Date as published in
H.15(519) opposite the caption "Treasury Constant Maturities"; or (c)
if the rate referred to in clause (b) does not so appear in H.15(519),
the one-week or one-month, as specified on the face hereof, average
yield for United States Treasury securities at "constant maturity"
having the particular Index Maturity as otherwise announced by the
Federal Reserve Bank of New York for the week or month, as applicable,
ended immediately preceding the week or month, as applicable, in which
the particular Interest Determination Date falls; or (d) if the rate
referred to in clause (c) is not so published, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as a yield to maturity based on the arithmetic mean
of the secondary market bid prices at approximately 3:30 P.M., New
York City time, on that Interest Determination Date of three Reference
Dealers selected by the Funding Note Calculation Agent from five
Reference Dealers selected by the Funding Note Calculation Agent and
eliminating the highest quotation, or, in the event of equality, one
of the highest, and the lowest quotation or, in the event of equality,
one of the lowest, for United States Treasury securities with an
original maturity equal to the particular Index Maturity, a remaining
term to maturity no more than one year shorter than that Index
Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time; or (e) if
fewer than five but more than two of the prices referred to in clause
(d) are provided as requested, the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent
based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of the quotations shall be eliminated; or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the particular Interest Determination Date
calculated by the Funding Note Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid
prices as of approximately 3:30 P.M., New York City time, on that
Interest Determination Date of three Reference Dealers selected by the
Funding Note Calculation Agent from five Reference Dealers selected by
the Funding Note Calculation Agent and eliminating the highest
quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity greater
than the particular Index Maturity, a remaining term to maturity
closest to that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that
market at the time; or (g) if fewer than five but more than two prices
referred to in clause (f) are provided as requested, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of the quotations will
be eliminated; or (h) if fewer than three prices referred to in clause
(f) are provided as requested, the CMT Rate in effect on that Interest
Determination Date; provided that if no CMT Rate is then in effect,
the interest rate that will be effective as of the next Interest Reset
Date will be the Initial Interest Rate.
If two United States Treasury securities with an original maturity
greater than the Index Maturity specified on the face hereof have
remaining terms to maturity equally close to the particular Index
Maturity, the quotes for the United States Treasury security with the
shorter original remaining term to maturity will be used.
(C) Commercial Paper Rate Note. If the Interest Rate Basis is the Commercial
Paper Rate, the Funding Note shall be deemed to be a "Commercial Paper Rate
Note". A Commercial Paper Rate Note will bear interest for each Interest
Reset Date at the interest rate calculated with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any. The Funding Note
Calculation Agent will determine the Commercial Paper Rate on each
applicable Interest Determination Date. The Interest Determination Date is
the second Business Day preceding the related Interest Reset Date.
"Commercial Paper Rate" means: (1) the Money Market Yield (calculated
as described below) on the Interest Determination Date of the rate for
commercial paper having the applicable Index Maturity as such rate is
published in H.15(519) under the heading "Commercial
Paper--Nonfinancial"; or (2) if the rate referred to in clause (1) is
not published by 3:00 P.M., New York City time, on the Funding Note
Calculation Date pertaining to such Interest Determination Date, then
the Commercial Paper Rate shall be the Money Market Yield on the
particular Interest Determination Date of the rate for commercial
paper having the particular Index Maturity as published on H.15 Daily
Update or such other recognized electronic source used for the
purposes of displaying the applicable rate, under the caption
"Commercial Paper--Nonfinancial"; or (3) if the rate referred to in
clause (2) is not published by 3:00 P.M., New York City time, on the
Funding Note Calculation Date, then the Commercial Paper Rate as
calculated by the Funding Note Calculation Agent shall be the Money
Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on that Interest
Determination Date of three leading dealers of United States dollar
commercial paper in The City of New York (which may include the Agents
or their affiliates) selected by the Funding Note Calculation Agent
for commercial paper having the particular Index Maturity placed for
industrial issuers whose bond rating is "Aa" by ▇▇▇▇▇'▇ or the
equivalent from another nationally recognized statistical rating
organization; or (4) if the dealers so selected by the Funding Note
Calculation Agent are not quoting as mentioned in clause (3), the
Commercial Paper Rate in effect on the particular Interest
Determination Date; provided that if no Commercial Paper Rate is then
in effect, the interest rate that will be effective as of the next
Interest Reset Date will be the Initial Interest Rate.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
------------------------
360 - (D x M)
where "D" refers to the per annum rate for the commercial paper,
quoted on a bank discount basis and expressed as a decimal; and "M"
refers to the actual number of days in the applicable Interest Period.
(D) Constant Maturity Swap Rate Notes. If the Interest Basis is the Constant
Maturity Swap Rate, the Notes shall be deemed to be "Constant Maturity Swap
Rate Notes." Constant Maturity Swap Rate Notes will bear interest at the
interest rate calculated with reference to the Constant Maturity Swap Rate
and the Spread or Spread Multiplier, if any. The Funding Note Calculation
Agent will determine the Constant Maturity Swap Rate on each applicable
Interest Determination Date. The Interest Determination Date is the second
U.S. Government Securities Business Day (as defined below) preceding the
related Interest Reset Date; provided, however, that if, after attempting
to determine the Constant Maturity Swap Rate (as described below), such
rate is not determinable for a particular Interest Determination Date (the
"Original Interest Determination Date"), then such Interest Determination
Date shall be the first U.S. Government Securities Business Day preceding
the Original Interest Determination Date for which the Constant Maturity
Swap Rate can be determined as described below. Constant Maturity Swap
Rate" means (1) the rate for U.S. Dollar swaps with the designated maturity
specified on the face hereof, expressed as a percentage, which appears on
the Reuters Screen ISDAFIX1 Page as of 11:00 A.M., New York City time, on
the particular Interest Determination Date, or (2) if the rate referred to
in clause (1) does not appear on the Reuters Screen ISDAFIX1 Page by 2:00
P.M., New York City time, on such Interest Determination Date, a percentage
determined on the basis of the mid-market semi-annual swap rate quotations
provided by the Reference Banks (as defined below) as of approximately
11:00 A.M., New York City time, on such Interest Determination Date, and,
for this purpose, the semi-annual swap rate means the mean of the bid and
offered rates for the semi-annual fixed leg, calculated on a 30/360 day
count basis, of a fixed-for-floating U.S. Dollar interest rate swap
transaction with a term equal to the designated maturity specified in the
face hereof commencing on the Interest Reset Date and in a Representative
Amount (as defined below) with an acknowledged dealer of good credit in the
swap market, where the floating leg, calculated on an Actual/360 day count
basis, is equivalent to USD-LIBOR-BBA with a designated maturity specified
on the face hereof. The Funding Note Calculation Agent will request the
principal New York City office of each of the Reference Banks to provide a
quotation of its rate. If at least three quotations are provided, the rate
for that Interest Determination Date will be the arithmetic mean of the
quotations, eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest).
"U.S. Government Securities Business Day" means any day except for
Saturday, Sunday, or a day on which The Bond Market Association
recommends that the fixed income departments of its members be closed
for the entire day for purposes of trading in U.S. government
securities.
"Representative Amount" means an amount that is representative for a
single transaction in the relevant market at the relevant time.
"Reference Banks" mean five leading swap dealers in the New York City
interbank market, selected by the Funding Note Calculation Agent,
after consultation with Allstate Life.
(E) Eleventh District Cost of Funds Rate Note. If the Interest Basis is the
Eleventh District Costs of Funds Rate, the Funding Note shall be deemed to
be a "Eleventh District Cost of Funds Rate Note". An Eleventh District Cost
of Funds Note will bear interest at the interest rate calculated with
reference to the Eleventh District Cost of Funds Rate and the Spread or
Spread Multiplier, if any. The Funding Note Calculation Agent will
determine the Eleventh District Cost of Rate on each applicable Interest
Determination Date. The applicable Interest Determination Date is the last
working day of the month immediately preceding the related Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the
Eleventh District Index. The "Eleventh District Cost of Funds Rate" means
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the particular
Interest Determination Date falls as set forth under the caption "11th
District" on the display on Moneyline Telerate (or any successor service)
on page 7058 (or any other page as may replace the specified page on that
service) ("Moneyline Telerate Page 7058") as of 11:00 A.M., San Francisco
time, on that Interest Determination Date, or (2) if the rate referred to
in clause (1) does not so appear on Moneyline Telerate Page 7058, the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced
(the "Eleventh District Index") by the Federal Home Loan Bank of San
Francisco as the cost of funds for the calendar month immediately preceding
that Interest Determination Date, or (3) if the Federal Home Loan Bank of
San Francisco fails to announce the Eleventh District Index on or prior to
the particular Interest Determination Date for the calendar month
immediately preceding that Interest Determination Date, the Eleventh
District Cost of Funds Rate in effect on the particular Interest
Determination Date; provided that if no Eleventh District Cost of Funds
Rate is then in effect, the interest rate that will be effective as of the
next Interest Reset Date will be the Initial Interest Rate.
(F) Federal Funds Open Rate Notes. If the Interest Basis is the Federal Funds
Open Rate, the Notes shall be deemed to be "Federal Funds Open Rate Notes."
Federal Funds Open Rate Notes will bear interest at the interest rate
calculated with reference to the Federal Funds Open Rate and the Spread or
Spread Multiplier, if any. The Funding Note Calculation Agent will
determine the Federal Funds Open Rate on each applicable Interest
Determination Date. The Interest Determination Date is the related Interest
Reset Date. "Federal Funds Open Rate" means the rate set forth on Moneyline
Telerate Page 5 for an Interest Reset Date underneath the caption "FEDERAL
FUNDS" in the row titled "OPEN". If the rate is not available for an
Interest Reset Date, the rate for that Interest Reset Date shall be the
Federal Funds Rate as determined below.
(G) Federal Funds Rate Note. If the Interest Rate Basis is the Federal Funds
Rate, the Funding Note shall be deemed to be a "Federal Funds Rate Note". A
Federal Funds Rate Note will bear interest for each Interest Reset Date at
the interest rate calculated with reference to the Federal Funds Rate and
the Spread or Spread Multiplier, if any. The Funding Note Calculation Agent
will determine the Federal Funds Rate on each applicable Interest
Determination Date. The Interest Determination Date is the Business Day
immediately preceding the related Interest Reset Date. "Federal Funds Rate"
means (1) the rate on the particular Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the caption
"Federal Funds (Effective)" and displayed on Moneyline Telerate (or any
successor service) on page 120 (or any other page as may replace the
specified page on that service) ("Moneyline Telerate Page 120"), or (2) if
the rate referred to in clause (1) does not so appear on Moneyline Telerate
Page 120 or is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date for United States dollar federal funds as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Federal Funds
(Effective)", or (3) if the rate referred to in clause (2) is not so
published by 3:00 P.M., New York City time, on the related Funding Note
Calculation Date, the rate on the particular Interest Determination Date
calculated by the Funding Note Calculation Agent as the arithmetic mean of
the rates for the last transaction in overnight United States dollar
federal funds arranged by three leading brokers of United States dollar
federal funds transactions in The City of New York (which may include the
Agents or their affiliates), selected by the Funding Note Calculation Agent
prior to 9:00 A.M., New York City time, on that Interest Determination
Date, or (4) if the brokers so selected by the Funding Note Calculation
Agent are not quoting as mentioned in clause (3), the Federal Funds Rate in
effect on the particular Interest Determination Date; provided that if no
Federal Funds Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial Interest
Rate.
(H) LIBOR Note. If the Interest Rate Basis is LIBOR (as defined below), the
Funding Note shall be deemed to be a "LIBOR Note". A LIBOR Note will bear
interest for each Interest Period at the interest rate calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any. On each
applicable Interest Determination Date the Funding Note Calculation Agent
will determine LIBOR. The applicable Interest Determination Date is the
second London Banking Day preceding the related Interest Reset Date.
LIBOR means: (1) if "LIBOR Moneyline Telerate" is specified on the
face hereof or if neither "LIBOR Reuters" nor "LIBOR Moneyline
Telerate" is specified on the face hereof as the method for
calculating LIBOR, the rate for deposits in the LIBOR Currency (as
defined below) having the Index Maturity specified on the face hereof,
commencing on the related Interest Reset Date, that appears on the
LIBOR Page (as defined below) as of 11:00 A.M., London time, on the
particular Interest Determination Date, or (2) if "LIBOR Reuters" is
specified on the face hereof, the arithmetic mean of the offered
rates, calculated by the Funding Note Calculation Agent, or the
offered rate, if the LIBOR Page by its terms provides only for a
single rate, for deposits in the LIBOR Currency having the particular
Index Maturity, commencing on the related Interest Reset Date, that
appear or appears, as the case may be, on the LIBOR Page as of 11:00
A.M., London time, on the particular Interest Determination Date, or
(3) if fewer than two offered rates appear, or no rate appears, as the
case may be, on the particular Interest Determination Date on the
LIBOR Page as specified in clause (1) or (2), as applicable, the rate
calculated by the Funding Note Calculation Agent of at least two
offered quotations obtained by the Funding Note Calculation Agent
after requesting the principal London offices of each of four major
reference banks (which may include affiliates of the Agents), in the
London interbank market to provide the Funding Note Calculation Agent
with its offered quotation for deposits in the LIBOR Currency for the
period of the particular Index Maturity, commencing on the related
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on that Interest Determination
Date and in a principal amount that is representative for a single
transaction in the LIBOR Currency in that market at that time, or (4)
if fewer than two offered quotations referred to in clause (3) are
provided as requested, the rate calculated by the Funding Note
Calculation Agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial
Center, on the particular Interest Determination Date by three major
banks (which may include affiliates of the Agents), in that Principal
Financial Center selected by the Funding Note Calculation Agent for
loans in the LIBOR Currency to leading European banks, having the
particular Index Maturity and in a principal amount that is
representative for a single transaction in the LIBOR Currency in that
market at that time, or (5) if the banks so selected by the Funding
Note Calculation Agent are not quoting as mentioned in clause (4),
LIBOR in effect on the particular Interest Determination Date;
provided that if no LIBOR is then in effect, the interest rate that
will be effective as of the next Interest Reset Date will be the
Initial Interest Rate.
"LIBOR Currency" means the currency specified on the face hereof as to
which LIBOR shall be calculated or, if no currency is specified on the
face hereof, United States dollars.
"LIBOR Page" means either: if "LIBOR Reuters" is specified on the face
hereof as the method for calculating LIBOR, the display on the Reuter
Monitor Money Rates Service (or any successor service) on the page
specified on the face hereof (or any other page as may replace that
page on that service) for the purpose of displaying the London
interbank rates of major banks for the LIBOR Currency; or if "LIBOR
Moneyline Telerate" is specified on the face hereof or neither "LIBOR
Reuters" nor "LIBOR Moneyline Telerate" is specified on the face
hereof as the method for calculating LIBOR, the display on Moneyline
Telerate (or any successor service) on the page specified on the face
hereof (or any other page as may replace such page on such service)
for the purpose of displaying the London interbank rates of major
banks for the LIBOR Currency.
"London Banking Day" means a day on which commercial banks are open
for business (including dealings in the LIBOR Currency) in London.
(I) EURIBOR Note. If the Interest Rate Basis is EURIBOR (as defined below), the
Funding Note shall be deemed to be a "EURIBOR Note". A EURIBOR Note will
bear interest at the rates (calculated with references to the European
inter-bank offered rate for deposits in Euro, or "EURIBOR", and the Spread
and/or Spread Multiplier, if any) specified on the face hereof.
"EURIBOR" means, with respect to any Interest Determination Date
relating to a EURIBOR Note or if the Funding Note bears interest at a
floating rate for which the interest rate is determined with reference
to EURIBOR (a "EURIBOR Interest Determination Date"), the rate for
deposits in Euros as sponsored, calculated and published jointly by
the European Banking Federation and ACI--The Financial Market
Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, having the Index
Maturity specified on the face hereof, commencing on the applicable
Interest Reset Date, as the rate appears on Moneyline Telerate, Inc.,
or any successor service, on page 248 (or any other page as may
replace that specified page on the service) ("Moneyline Telerate Page
248") as of 11:00 A.M., Brussels time, on the applicable EURIBOR
Interest Determination Date. If such rate does not appear on Moneyline
Telerate Page 248, or is not so published by 11:00 A.M., Brussels
time, on the applicable EURIBOR Interest Determination Date, such rate
will be calculated by the Funding Note Calculation Agent and will be
the arithmetic mean of at least two quotations obtained by the Funding
Note Calculation Agent after requesting the principal Euro-zone (as
defined below) offices of four major banks in the Euro-zone interbank
market to provide the Funding Note Calculation Agent with its offered
quotation for deposits in Euros for the period of the Index Maturity
specified on the face hereof, commencing on the applicable Interest
Reset Date, to prime banks in the Euro-zone interbank market at
approximately 11:00 A.M., Brussels time, on the applicable EURIBOR
Interest Determination Date and in a principal amount not less than
the equivalent of $1 million in Euros that is representative for a
single transaction in Euro in the market at that time. If fewer than
two such quotations are so provided, the rate on the applicable
EURIBOR Interest Determination Date will be calculated by the Funding
Note Calculation Agent and will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR
Interest Determination Date by four major banks in the Euro-zone for
loans in Euro to leading European banks, having the Index Maturity
specified on the face hereof, commencing on the applicable Interest
Reset Date and in a principal amount not less than the equivalent of
$1 million in Euros that is representative for a single transaction in
Euros in the market at that time. If the banks so selected by the
Funding Note Calculation Agent are not quoting as mentioned above,
EURIBOR will be EURIBOR in effect on the applicable EURIBOR Interest
Determination Date; provided that if no EURIBOR is then in effect, the
interest rate that will be effective as of the next Interest Reset
Date will be the Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the
European Union that have adopted the single currency in accordance
with the Treaty Establishing the European Community, as amended by the
Treaty on European Union.
(J) Prime Rate Note. If the Interest Rate Basis is the Prime Rate, the Funding
Note shall be deemed to be a "Prime Rate Note". A Prime Rate Note will bear
interest for each Interest Reset Date calculated with reference to the
Prime Rate and the Spread or Spread Multiplier, if any, subject to the
Minimum Interest Rate and/or Maximum Interest Rate, if any, specified on
the face hereof. The Funding Note Calculation Agent will determine the
Prime Rate for each Interest Reset Date on each applicable Interest
Determination Date. The Interest Determination Date is the Business Day
immediately preceding the related Interest Reset Date. "Prime Rate" means
(1) the rate on the particular Interest Determination Date as published in
H.15(519) under the caption "Bank Prime Loan", or (2) if the rate referred
to in clause (1) is not so published by 3:00 P.M., New York City time, on
the related Funding Note Calculation Date, the rate on the particular
Interest Determination Date as published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Bank Prime Loan", or (3) if the rate
referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on the related Funding Note Calculation Date, the rate on the
particular Interest Determination Date calculated by the Funding Note
Calculation Agent as the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen US PRIME 1 Page
(as defined below) as the applicable bank's prime rate or base lending rate
as of 11:00 A.M., New York City time, on that Interest Determination Date,
or (4) if fewer than four rates referred to in clause (3) are so published
by 3:00 P.M., New York City time, on the related Funding Note Calculation
Date, the rate on the particular Interest Determination Date calculated by
the Funding Note Calculation Agent as the arithmetic mean of the prime
rates or base lending rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on
that Interest Determination Date by three major banks (which may include
affiliates of the Agents) in The City of New York selected by the Funding
Note Calculation Agent, or (5) if the banks so selected by the Funding Note
Calculation Agent are not quoting as mentioned in clause (4), the Prime
Rate in effect on the particular Interest Determination Date; provided that
if no Prime Rate is then in effect, the interest rate that will be
effective as of the next Interest Reset Date will be the Initial Interest
Rate. "Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service (or any successor service) on the "US PRIME 1"
page (or any other page as may replace that page on that service) for the
purpose of displaying prime rates or base lending rates of major United
States banks.
(K) Treasury Rate Note. If the Interest Rate Basis is the Treasury Rate, the
Funding Note shall be deemed to be a "Treasury Rate Note". A Treasury Rate
Note will bear interest for each Interest Reset Date at the interest rate
calculated with reference to the Treasury Rate and the Spread or Spread
Multiplier, if any. The Funding Note Calculation Agent will determine the
Treasury Rate on each Treasury Rate Determination Date (as defined below).
"Treasury Rate" means (1) the rate from the auction held on the Treasury
Rate Interest Determination Date (the "Auction") of direct obligations of
the United States ("Treasury Bills") having the Index Maturity specified on
the face hereof under the caption "INVESTMENT RATE" on the display on
Moneyline Telerate (or any successor service) on page 56 (or any other page
as may replace that page on that service) ("Moneyline Telerate Page 56") or
page 57 (or any other page as may replace that page on that service)
("Moneyline Telerate Page 57"), or (2) if the rate referred to in clause
(1) is not so published by 3:00 P.M., New York City time, on the related
Funding Note Calculation Date, the Bond Equivalent Yield (as defined below)
of the rate for the applicable Treasury Bills as published in H.15 Daily
Update, or another recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High", or (3) if the rate referred to in
clause (2) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the Bond Equivalent Yield of the
auction rate of the applicable Treasury Bills as announced by the United
States Department of the Treasury, or (4) if the rate referred to in clause
(3) is not so announced by the United States Department of the Treasury, or
if the Auction is not held, the Bond Equivalent Yield of the rate on the
particular Interest Determination Date of the applicable Treasury Bills as
published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market", or (5) if the rate referred to
in clause (4) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date of the applicable Treasury Bills as published in H.15
Daily Update, or another recognized electronic source used for the purpose
of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market", or (6) if the rate referred to
in clause (5) is not so published by 3:00 P.M., New York City time, on the
related Funding Note Calculation Date, the rate on the particular Interest
Determination Date calculated by the Funding Note Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on that Interest
Determination Date, of three primary United States government securities
dealers (which may include the Agents or their affiliates) selected by the
Funding Note Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face
hereof, or (7) if the dealers so selected by the Funding Note Calculation
Agent are not quoting as mentioned in clause (6), the Treasury Rate in
effect on the particular Interest Determination Date; provided that if no
Treasury Rate is then in effect, the interest rate that will be effective
as of the next Interest Reset Date will be the Initial Interest Rate.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D x N x 100
-----------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis and expressed as a decimal, "N" refers
to 365 or 366, as the case may be, and "M" refers to the actual number
of days in the applicable Interest Period.
The "Treasury Rate Determination Date" for each Interest Reset Date
means the day in the week in which the related Interest Reset Date
falls on which day Treasury Bills are normally auctioned (i.e.,
Treasury Bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that the auction may be
held on the preceding Friday); provided, however, that if an auction
is held on the Friday of the week preceding the related Interest Reset
Date, the Interest Determination Date will be the preceding Friday.
(L) Regular Floating Rate Note. Unless the Funding Note is designated as a
Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note, or as
having an Addendum attached or having other/additional provisions apply, in
each case relating to a different interest rate formula, the Funding Note
that bears interest at floating rates will be a Regular Floating Rate Note
and will bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases plus or minus the applicable
Spread, if any, and/or multiplied by the applicable Spread Multiplier, if
any. Commencing on the first Interest Reset Date, as specified on the face
hereof, the rate at which interest on a Regular Floating Rate Note is
payable will be reset as of each Interest Reset Date; provided, however,
that the interest rate in effect for the period, if any, from the date of
issue to the first Interest Reset Date will be the Initial Interest Rate.
(M) Floating Rate/Fixed Rate Note. If the Funding Note is designated as a
"Floating Rate/Fixed Rate Note" on the face hereof, the Funding Note that
bears interest at floating rates will bear interest at the rate determined
by reference to the applicable Interest Rate Basis or Bases plus or minus
the applicable Spread, if any, and/or multiplied by the applicable Spread
Multiplier, if any. Commencing on the first Interest Reset Date, the rate
at which interest on a Floating Rate/Fixed Rate Note is payable will be
reset as of each Interest Reset Date; provided, however, that the interest
rate in effect for the period, if any, from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate, as specified on the
face hereof; and the interest rate in effect commencing on the Fixed Rate
Commencement Date will be the Fixed Interest Rate, if specified on the face
hereof, or, if not so specified, the interest rate in effect on the day
immediately preceding the Fixed Rate Commencement Date.
(N) Inverse Floating Rate Note. If the Funding Note is designated as an
"Inverse Floating Rate Note" on the face hereof, the Inverse Floating Rate
shall be equal to the Fixed Interest Rate minus the rate determined by
reference to the applicable Interest Rate Basis or Bases plus or minus the
applicable Spread, if any, and/or multiplied by the applicable Spread
Multiplier, if any; provided, however, that interest on an Inverse Floating
Rate Note will not be less than zero. Commencing on the first Interest
Reset Date, the rate at which interest on an Inverse Floating Rate Note is
payable will be reset as of each Interest Reset Date; provided, however,
that the interest rate in effect for the period, if any, from the date of
issue to the first Interest Reset Date will be the Initial Interest Rate.
SECTION 4. Optional Redemption. If any Initial Redemption Date is specified on
the face hereof, Global Funding may redeem the Funding Note prior to the Stated
Maturity Date at its option on any Business Day on or after the Date Initial
Redemption in whole or from time to time in part in increments of $1,000 or any
other integral multiple of an authorized denomination specified on the face
hereof at the applicable Redemption Price (as defined below) together with any
unpaid interest accrued on the Funding Note, any Additional Amounts and other
amounts payable with respect thereto, as of the Redemption Date. Unless
otherwise specified in the Funding Note Indenture or on the face hereof, Global
Funding shall give a notice of such redemption to the Holder of any portion of
the Funding Note to be redeemed not more than 60 nor less than 30 days prior to
the Redemption Date. "Redemption Price" means an amount equal to the Initial
Redemption Percentage specified on the face hereof (as adjusted by the Annual
Redemption Percentage Reduction, if applicable) multiplied by the unpaid
principal amount of the Funding Note to be redeemed. The Initial Redemption
Percentage, if any, shall decline at each anniversary of the Initial Redemption
Date by an amount equal to the applicable Annual Redemption Percentage
Reduction, if any, until the Redemption Price is equal to 100% of the unpaid
amount the Funding Note to be redeemed.
SECTION 5. Sinking Funds and Amortizing Note. Unless otherwise specified on the
face hereof or unless the Funding Note is an Amortizing Note, the Funding Note
will not be subject to, or entitled to the benefit of, any sinking fund. If it
is specified on the face hereof that the Funding Note is an Amortizing Note,
Global Funding will make payments combining principal and interest on the dates
and in the amounts set forth in the table appearing in SCHEDULE I, attached to
this Funding Note Certificate. If the Funding Note is an Amortizing Note,
payments made on the Funding Note will be applied first to interest due and
payable on each such payment date and then to the reduction of the unpaid
principal amount.
SECTION 6. Optional Repayment. If so specified on the face hereof, the Holder or
Holders of the Funding Note may require Global Funding to repay the Funding Note
on the Optional Repayment Date(s) specified on the face hereof, in whole or from
time to time, in part, in increments of U.S.$1,000 or any other integral
multiple of an authorized denomination specified on the face hereof (provided
that any remaining principal amount of the Funding Note shall be at least
U.S.$1,000 or any other integral multiple of an authorized denomination
specified on the face hereof), at a repayment price equal to 100% of the unpaid
principal amount of the Funding Note to be repaid, together with unpaid interest
accrued thereon to the Repayment Date (as defined below) and any other amounts
then due and owing. For the Funding Note or any portion thereof to be so repaid,
the Funding Note Indenture Trustee must receive at its Corporate Trust Office
not more than 60 nor less than 30 calendar days prior to the applicable
Repayment Date, a properly completed Option to Elect Repayment form, which is
attached hereto as Annex A, forwarded by the Holder or Holders of the Funding
Note. Exercise of such repayment option shall be irrevocable. As used herein,
the term "Repayment Date" shall mean the date fixed for repayment in accordance
with the repayment provisions specified above.
SECTION 7. Tax Redemption. If (i) Global Funding is required at any time to pay
Additional Amounts (as defined below) or if Global Funding is obligated to
withhold or deduct any United States taxes with respect to any payment under the
Funding Note, as set forth in the Funding Note Certificate, or if there is a
material probability that Global Funding will become obligated to withhold or
deduct any such United States taxes or otherwise pay Additional Amounts (in the
opinion of independent legal counsel selected by the Funding Agreement
Provider), in each case pursuant to any change in or amendment to any United
States tax laws (or any regulations or rulings thereunder) or any change in
position of the Internal Revenue Service regarding the application or
interpretation thereof (including, but not limited to, the Funding Agreement
Provider's or Global Funding's receipt of a written adjustment from the Internal
Revenue Service in connection with an audit) (a "Tax Event"), and (ii) the
Funding Agreement Provider, pursuant to the terms of the relevant Funding
Agreement, has delivered to the Owner notice that the Funding Agreement Provider
intends to terminate the relevant Funding Agreement pursuant to the terms of
such Funding Agreement, then Global Funding will redeem the Funding Note on the
Redemption Date at the Redemption Price together with any unpaid interest
accrued thereon, any Additional Amounts and other amounts payable with respect
thereto, as of the Redemption Date.
Unless otherwise specified in the Funding Note Indenture or on the face
hereof, Global Funding shall give a notice of such redemption to the Holder of
the Funding Note to be redeemed not more than 75 days nor less than 30 days
prior to the Redemption Date; provided, that no such notice of redemption may be
given earlier than 90 days prior to the earliest day on which Global Funding
would become obligated to pay the applicable Additional Amounts were a payment
in respect of the Funding Note then due. Failure to give such notice to the
Holder of any portion of the Funding Note designated for redemption in whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other portion of the
Funding Note.
SECTION 8. Modifications and Amendments. The Funding Note Indenture contains
provisions permitting Global Funding and the Funding Note Indenture Trustee (1)
without the consent of any Holder, to execute Supplemental Funding Note
Indentures for limited purposes and take other actions set forth in the Funding
Note Indenture, and (2) with the consent of the Holder or Holders of not less
than 66 2/3% of the outstanding principal amount of the Funding Note, evidenced
as provided in the Funding Note Indenture, to execute Supplemental Funding Note
Indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Funding Note Indenture or any Supplemental Funding Note
Indenture or modifying in any manner the rights of the Holder or Holders of the
Funding Note subject to specified limitations.
SECTION 9. Obligations Unconditional. No reference herein to the Funding Note
Indenture and no provision of the Funding Note or of the Funding Note Indenture
shall alter or impair the obligation of Global Funding, which is absolute and
unconditional, to pay the principal of, interest on, or any other amount due and
owing with respect to, the Funding Note at the places, at the respective times,
at the rate, and in the coin or currency, herein prescribed.
SECTION 10. Collateral. Pursuant to the Funding Note Indenture, Global Funding
will grant a security interest in, pledge and collaterally assign the relevant
Funding Agreement(s) issued by the Funding Agreement Provider in connection with
the issuance of the Funding Note (each, a "Funding Agreement") to the Funding
Note Indenture Trustee. The Funding Note will be secured by the Security
Interest in the Collateral in favor of the Funding Note Indenture Trustee for
the benefit of each Holder of the Funding Note and each other person for whose
benefit the Funding Note Indenture Trustee is or will be holding the Collateral
(the "Secured Parties").
SECTION 11. Security; Limited Recourse. The Funding Note is solely the
obligation of Global Funding, and will not be guaranteed by any person,
including but not limited to the Funding Agreement Provider, any Allstate Life
Global Funding Trust, any Agent, the Global Funding Trust Beneficial Owner, the
Delaware Trustee, the Funding Note Indenture Trustee or any of their affiliates.
Global Funding's obligations under the Funding Note will be secured by all of
Global Funding's rights and title in one or more Funding Agreement(s) issued by
the Funding Agreement Provider and other rights and assets included in the
applicable Collateral. The Holder or Holders of the Funding Note have no direct
contractual rights against the Funding Agreement Provider under the Funding
Agreement(s). Under the terms of each Funding Agreement, recourse rights to the
Funding Agreement Provider will belong to Global Funding, its successors and
permitted assignees. Global Funding has pledged and collaterally assigned each
Funding Agreement to the Funding Note Indenture Trustee and has granted the
Security Interest in the Collateral to the Funding Note Indenture Trustee for
the benefit of the Secured Parties. Recourse to the Funding Agreement Provider
under each Funding Agreement will be enforceable only by the Funding Note
Indenture Trustee on behalf of the Secured Parties.
SECTION 12. Events of Default. If one or more Events of Default, as defined in
the Funding Note Indenture, shall have occurred and be continuing with respect
to the Funding Note, then, and in every such event, unless the principal of the
Funding Note shall have already become due and payable, the entire principal and
premium (if any) of the Funding Note, any interest accrued thereon, and any
Additional Amounts due and owing and any other amounts payable with respect
thereto, may be declared to be, and upon any such declaration the same shall
become immediately, due and payable; provided that, with respect to certain
Events of Default, without any notice to Global Funding or any other act by the
Funding Note Indenture Trustee or any Holder of the Funding Note, the entire
principal and premium (if any) of the Funding Note, any interest accrued
thereon, and any Additional Amounts due and owing, and any other amounts payable
with respect thereto, shall become immediately due and payable without
presentment, demand, protest or other notice of any kind. If the Funding Note is
a Discount Note, the amount of principal of the Funding Note that becomes due
and payable upon such acceleration shall be equal to the amount calculated as
set forth in Section 3 hereof.
SECTION 13. Withholding; Additional Amounts. All amounts due in respect of the
Funding Note will be made without withholding or deduction for or on account of
any present or future taxes, duties, levies, assessments or other governmental
charges of whatever nature imposed or levied by or on behalf of any governmental
authority in the United States having the power to tax payments on the Funding
Note unless the withholding or deduction is required by law. Unless otherwise
specified on the face hereof, Global Funding will not pay any Additional Amounts
to the Holders of the Funding Note in the event that any withholding or
deduction is so required by law, regulation or official interpretation thereof,
and the imposition of a requirement to make any such withholding or deduction
will not give rise to any independent right or obligation to redeem or repay the
Funding Note and shall not constitute an Event of Default.
SECTION 14. Listing. Unless otherwise specified on the face hereof, the Funding
Note will not be listed on any securities exchange.
SECTION 15. No Recourse. Notwithstanding anything to the contrary contained in
the Funding Note Indenture, or the Funding Note Certificate or Supplemental
Funding Note Indenture, none of the Funding Agreement Provider, its officers,
directors, affiliates, employees or agents, or any of the Delaware Trustee, the
Funding Note Indenture Trustee or the Global Funding Trust Beneficial Owner, or
any of their officers, directors, affiliates, employees or agents (the
"Non-recourse Parties") will be personally liable for the payment of any
principal, interest or any other sums at any time owing under the terms of the
Funding Note. If any Event of Default shall occur with respect to the Funding
Note, the right of the Holders of the Funding Note and the Funding Note
Indenture Trustee on behalf of such Holders in connection with a claim on the
Funding Note shall be limited solely to a proceeding against the Collateral.
Neither the Holders nor the Funding Note Indenture Trustee on behalf of the
Holders will have the right to proceed against the Non-recourse Parties to
enforce the Funding Note (except that to the extent they exercise their rights,
if any, to seize the relevant Funding Agreement, they may enforce the relevant
Funding Agreement against the Funding Agreement Provider) or for any deficiency
judgment remaining after foreclosure of any property included in the Collateral.
SECTION 16. Governing Law. Pursuant to Section 5-1401 of the General Obligations
Law of the State of New York, the Funding Note shall be governed by, and
construed in accordance with, the laws of the State of New York.
B-A-A-1
ANNEX A
OPTION TO ELECT REPAYMENT
The undersigned Holder of the Funding Note hereby irrevocably elects to
have Global Funding repay the principal amount of the Funding Note or portion
hereof at the optional repayment price in accordance with the terms of the
Funding Note.
Date: __________________________ ___________________________________________
Signature
Sign exactly as name appears on the front
of this Note Certificate [SIGNATURE GUARANTEED
- required only if Funding Note is to be
issued and delivered to other than the
registered Holder]
Fill in for registration of Funding Note if to be
issued otherwise than to the registered
Principal amount to be repaid, if Holder:
amount to be repaid is less than the
principal amount of the Funding Note
represented by this Note Certificate
(principal amount remaining must be an
authorized denomination)
$ ------------------------
Name: _____________________
Address: _____________________
---------------------
(Please print name and address
including zip code)
Social Security or Other Taxpayer ID Number
B-I-1
SCHEDULE I
AMORTIZATION TABLE
Date Payment
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