Exhibit 4.1
AMENDED AND RESTATED DECLARATION
OF TRUST
AHM CAPITAL TRUST I
DATED AS OF JUNE 28, 2007
TABLE OF CONTENTS
ARTICLE I INTERPRETATION AND DEFINITIONS....................................2
SECTION 1.1 Definitions.....................................................2
ARTICLE II TRUST INDENTURE ACT...............................................9
SECTION 2.1 Trust Indenture Act; Application................................9
SECTION 2.2 Lists of Holders of Securities.................................10
SECTION 2.3 Reports by the Property Trustee................................10
SECTION 2.4 Periodic Reports to Property Trustee...........................10
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............11
SECTION 2.6 Events of Default, Waiver......................................11
SECTION 2.7 Event of Default, Notice.......................................12
ARTICLE III ORGANIZATION.....................................................13
SECTION 3.1 Name...........................................................13
SECTION 3.2 Office.........................................................13
SECTION 3.3 Purpose........................................................13
SECTION 3.4 Authority......................................................14
SECTION 3.5 Title to Property of the Trust.................................14
SECTION 3.6 Powers and Duties of the Administrative Trustees...............14
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.......................................................18
SECTION 3.8 Powers and Duties of the Property Trustee......................19
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee...............................................21
SECTION 3.10 Certain Rights of Property Trustee.............................23
SECTION 3.11 Delaware Trustee...............................................25
SECTION 3.12 Execution of Documents.........................................26
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities.....................................................26
SECTION 3.14 Duration of Trust..............................................26
SECTION 3.15 Mergers........................................................26
ARTICLE IV INITIAL PURCHASER OF COMMON SECURITIES...........................28
SECTION 4.1 Purchase of Common Securities by Initial Purchaser.............28
SECTION 4.2 Responsibilities of the Initial Purchaser of
Common Securities..............................................28
SECTION 4.3 Right to Proceed...............................................29
SECTION 4.4 Right to Terminate Trust.......................................29
SECTION 4.5 Obligations of the Initial Purchaser...........................29
ARTICLE V TRUSTEES.........................................................30
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee..................30
SECTION 5.2 Delaware Trustee...............................................30
SECTION 5.3 Property Trustee; Eligibility..................................31
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SECTION 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally.................................32
SECTION 5.5 Administrative Trustees........................................32
SECTION 5.6 Delaware Trustee...............................................33
SECTION 5.7 Appointment, Removal and Resignation of Trustees...............33
SECTION 5.8 Vacancies Among Trustees.......................................35
SECTION 5.9 Effect of Vacancies............................................35
SECTION 5.10 Meetings.......................................................35
SECTION 5.11 Delegation of Power............................................36
SECTION 5.12 Merger, Conversion, Consolidation or Succession to
Business.......................................................36
ARTICLE VI DISTRIBUTIONS....................................................36
SECTION 6.1 Distributions..................................................36
ARTICLE VII ISSUANCE OF SECURITIES...........................................37
SECTION 7.1 General Provisions Regarding Securities........................37
SECTION 7.2 Execution and Authentication...................................40
SECTION 7.3 Form and Dating................................................40
SECTION 7.4 Registrar, Paying Agent, Conversion Agent and
Exchange Agent.................................................42
SECTION 7.5 Paying Agent to Hold Money in Trust............................43
SECTION 7.6 Replacement Securities.........................................43
SECTION 7.7 Outstanding Preferred Securities...............................43
SECTION 7.8 Preferred Securities in Treasury...............................44
SECTION 7.9 Temporary Securities...........................................44
SECTION 7.10 Cancellation...................................................44
SECTION 7.11 CUSIP Numbers..................................................44
SECTION 7.12 Payment........................................................45
ARTICLE VIII TERMINATION OF TRUST.............................................45
SECTION 8.1 Termination of Trust...........................................45
ARTICLE IX TRANSFER OF INTERESTS............................................46
SECTION 9.1 Transfer of Securities.........................................46
SECTION 9.2 Transfer Procedures and Restrictions...........................47
SECTION 9.3 Deemed Security Holders........................................52
SECTION 9.4 Book-Entry Interests...........................................53
SECTION 9.5 Notices to Clearing Agency.....................................53
SECTION 9.6 Appointment of Successor Clearing Agency.......................53
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS.................................................54
SECTION 10.1 Liability......................................................54
SECTION 10.2 Exculpation....................................................54
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SECTION 10.3 Fiduciary Duty.................................................55
SECTION 10.4 Indemnification................................................55
SECTION 10.5 Outside Businesses.............................................58
SECTION 10.6 Compensation; Fees.............................................59
ARTICLE XI ACCOUNTING.......................................................59
SECTION 11.1 Fiscal Year....................................................59
SECTION 11.2 Certain Accounting Matters.....................................59
SECTION 11.3 Banking........................................................60
SECTION 11.4 Withholding....................................................60
ARTICLE XII AMENDMENTS AND MEETINGS..........................................60
SECTION 12.1 Amendments.....................................................60
SECTION 12.2 Meetings of the Holders; Action by Written Consent.............61
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE, DELAWARE
TRUSTEE AND HOLDERS OF PREFERRED SECURITIES......................63
SECTION 13.1 Representations and Warranties of Property Trustee.............63
SECTION 13.2 Representations and Warranties of Delaware Trustee.............64
SECTION 13.3 Representations and Warranties of Holders of
Preferred Securities...........................................64
ARTICLE XIV REGISTRATION RIGHTS..............................................65
SECTION 14.1 Registration Rights............................................65
ARTICLE XV MISCELLANEOUS....................................................65
SECTION 15.1 Notices........................................................65
SECTION 15.2 Holder Information Reporting...................................67
SECTION 15.3 Governing Law..................................................67
SECTION 15.4 Intention of the Parties.......................................67
SECTION 15.5 Headings.......................................................67
SECTION 15.6 Successors and Assigns.........................................68
SECTION 15.7 Partial Enforceability.........................................68
SECTION 15.8 Counterparts...................................................68
ARTICLE XVI CERTAIN RESTRICTIONS ON TRANSFER.................................68
SECTION 16.1 Restrictions and Limitations on Ownership of the
Trust Securities and Equity Stock of the
Corporation; REIT Provisions...................................68
SECTION 16.2 Shares-in-Trust................................................77
ANNEX I TERMS OF SECURITIES A-I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE A-1-1
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EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE A-2-1
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AHM CAPITAL TRUST I
June 28, 2007
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 28, 2007, by the Trustees (as defined herein), the Initial
Purchaser of Common Securities (as defined herein), the Debenture Issuer (as
defined herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Initial Purchaser of Common Securities and the Delaware
Trustee established AHM Capital Trust I (the "Trust"), a statutory trust formed
under the Delaware Statutory Trust Act pursuant to a Declaration of Trust dated
as of June 26, 2007 (the "Original Declaration"), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on June 26, 2007 (the
"Certificate of Trust"), for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Debentures of the Debenture
Issuer (each as hereinafter defined), and engaging in only those other
activities necessary, advisable or incidental thereto;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Initial Purchaser of Common
Securities, by this Declaration, amend and restate each and every term and
provision of the Original Declaration in its entirety; and
WHEREAS, the parties hereto shall have rights and obligations under this
Declaration as set forth herein.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a statutory trust under the Delaware Statutory Trust Act and that
this Declaration constitute the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration, and the parties hereto
hereby amend and restate in its entirety the Original Declaration as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Sums" has the meaning set forth in the Indenture.
"Administrative Action" has the meaning set forth in Annex I.
"Administrative Trustee" has the meaning set forth in Section 5.1.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Associate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any other Person that is authorized
to legally bind such former Person.
"Average Closing Price" has the meaning set forth in the Indenture.
"Board of Directors" shall mean either the board of directors of the
Corporation or any duly authorized committee of that board.
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"Book-Entry Interest" means a beneficial interest in a global certificate
registered in the name of a Clearing Agency or its nominee, ownership and
transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law, regulation or executive order to remain closed.
"Certificated Preferred Securities" shall have the meaning set forth in
Section 7.3(c).
"Change in Control" has the meaning set forth in the Indenture.
"Change in Control Effective Date" has the meaning set forth in the
Indenture.
"Change in Control Redemption Premium" has the meaning set forth in the
Indenture.
"Change in Control Redemption Price" has the meaning set forth in Annex I.
"Charter" shall mean the Articles of Amendment and Restatement of American
Home Mortgage Investment Corp. as filed with the State Department of Assessment
and Taxation of Maryland on December 3, 2003, together with any amendments or
supplements thereto now or hereafter existing.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" or "Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Price" has the meaning set forth in the Indenture.
"Closing Time" means the "Closing Time" under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Declaration such Commission is not existing and
performing the duties now assigned to it under applicable federal securities
laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Certificate" means the certificate evidencing the
Common Securities, in the form of Exhibit A-2 hereof.
"Common Stock" has the meaning set forth in the Indenture.
"Company Indemnified Person" means (a) any Administrative Trustee (to the
extent the Administrative Trustee is an Affiliate or an Associate of the Initial
Purchaser of Common Securities); (b) any Affiliate of any Administrative Trustee
(to the extent the Administrative Trustee is an Affiliate or an Associate of the
Initial Purchaser of Common Securities); (c) any officers, directors,
stockholders, members, partners, employees, representatives or agents of any
Administrative Trustee (to the extent the Administrative Trustee is an Affiliate
or an Associate of the Initial Purchaser of Common Securities); or (d) any
officer, employee or agent of the Initial Purchaser of Common Securities or the
Trust or their respective Affiliates.
"Conversion Agent" has the meaning set forth in Section 7.4.
"Conversion Date" has the meaning set forth in Annex I.
"Conversion Price" has the meaning set forth in the Indenture.
"Conversion Rate" has the meaning set forth in the Indenture.
"Conversion Rate Reset Date" has the meaning set forth in the Indenture.
"Conversion Reference Period" has the meaning set forth in the Indenture.
"Conversion Request" has the meaning set forth in Annex I.
"Conversion Value" has the meaning set forth in the Indenture.
"Corporate Trust Office" means the office of the Property Trustee at which
the corporate trust business of the Property Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Declaration is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware, 19890, Attn: Corporate Capital Markets - AHM Capital Trust
I.
"Coupon Rate" has the meaning set forth in Annex I.
"Covered Person" means: (a) any officer, director, stockholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means American Home Mortgage Investment Corp., a
Maryland corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
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"Debentures" means, the 9.75% Junior Subordinated Convertible Debentures
due July 1, 2037 of the Debenture Issuer issued pursuant to the Indenture.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Annex I.
"Distribution" means a distribution payable to Holders in accordance with
Section 6.1.
"Distribution Date" has the meaning set forth in Annex I.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"ERISA" has the meaning set forth in Section 7.1(f).
"Event of Default" in respect of the Securities has the meaning set forth
in Section 2.6(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Global Preferred Security" has the meaning set forth in Section 7.3(a).
"Holder" means a Person in whose name a Security or Successor Security is
registered on the register maintained by or on behalf of the Registrar, such
Person being a beneficial owner of the Trust within the meaning of the Statutory
Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of June 28, 2007, between the
Debenture Issuer and the Debenture Trustee, as amended from time to time.
"Individual" has the meaning set forth in Section 16.1.
"Initial Purchaser of Common Securities" means American Home Mortgage
Investment Corp., a Maryland corporation, or any successor entity resulting from
any merger, consolidation, amalgamation or other business combination.
5
"Interest" has the meaning set forth in the Indenture.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I.
"IRS" means the United States Internal Revenue Service.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Like Amount" has the meaning set forth in Annex I.
"Liquidated Damages" has the meaning set forth in the Indenture.
"Liquidation Amount" has the meaning set forth in Annex I.
"Liquidation Distribution" has the meaning set forth in Annex I.
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount of all outstanding Trust Securities of the relevant
class.
"Make-Whole Payment Price" has the meaning set forth in the Indenture.
"Make-Whole Redemption Price" has the meaning set forth in Annex I.
"Net Share Settlement Election" has the meaning set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by any two of the following: the chairman of the board of directors, a
vice chairman, the chief executive officer, the president, an executive vice
president, a senior vice president, a vice president, the chief financial
officer, the secretary or an assistant secretary, the treasurer or an assistant
treasurer of the such Person. Any Officers' Certificate delivered by the Trust
shall be signed by the Initial Purchaser of Common Securities or by an
Administrative Trustee on behalf of the Trust. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
6
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Initial Purchaser of Common Securities, and who shall be
reasonably acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Plan" has the meaning set forth in Section 7.1(f).
"PORTAL" has the meaning set forth in Section 3.6(b)(iii).
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Certificate" means a certificate evidencing the
Preferred Securities, in the form attached as Exhibit A-1 hereto.
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section 3.8(c)(i).
"Pro Rata" has the meaning set forth in Annex I.
"Purchase Agreement" has the meaning set forth in Section 7.3.
"Purchasers" has the meaning set forth in the Purchase Agreement.
"Quorum" means, at any time that there are more than two Administrative
Trustees, a majority of the Administrative Trustees and, in all other cases, all
of the Administrative Trustees.
"Redemption/Distribution Notice" has the meaning set forth in Annex I.
"Redemption Price" has the meaning set forth in Annex I.
7
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" has the meaning set forth in the Purchase
Agreement.
"Registration Statement" has the meaning set forth in Section 3.6(b)(i).
"Related Party" means, with respect to the Initial Purchaser of Common
Securities, any direct or indirect wholly owned subsidiary of the Initial
Purchaser of Common Securities or any other Person that owns, directly or
indirectly, 100% of the outstanding voting securities of the Initial Purchaser
of Common Securities.
"Repurchase Date" has the meaning set forth in the Indenture.
"Responsible Officer" means any officer within the Corporate Trust Office
of the Property Trustee with direct responsibility for the administration of
this Declaration and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Preferred Security" has the meaning specified in Section
9.2(a).
"Restricted Securities Legend" means the legend specified in Section
9.2(c).
"Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantee" means the Guarantee Agreement dated as of June 28,
2007 of the Initial Purchaser of Common Securities in respect of the Trust
Securities.
"Special Event" has the meaning set forth in Annex I.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. C.ss.ss..3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Successor Administrative Trustee" has the meaning set forth in Section
5.7(b)(iii).
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in Section
3.8(f)(ii).
"Successor Securities" has the meaning set forth in Section 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(b)(ii).
8
"25% in liquidation amount" means, with respect to the Trust Securities,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 25% or more of the aggregate liquidation
amount of all outstanding Securities of the relevant class.
"Tax Event" has the meaning set forth in Annex I.
"Termination of Trading" has the meaning set forth in the Indenture.
"Trading Day" has the meaning set forth in the Indenture.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Securities" or "Securities" means the Common Securities together
with the Preferred Securities.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue as a trustee in accordance
with the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Unrestricted Global Preferred Security" has the meaning set forth in
Section 9.2(c).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
This Declaration is subject to the provisions of the Trust Indenture Act
that are required to be part of this Declaration in order for this Declaration
to be qualified under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
(a) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(b) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
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(c) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) The Registrar on behalf of the Trust shall provide the Property
Trustee, unless the Property Trustee is Registrar for the Securities, (i)
within fourteen (14) days after each record date for payment of
Distributions a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as
of such record date, provided that the Registrar on behalf of the Trust
shall not be obligated to provide such List of Holders at any time that
the List of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Registrar on behalf of the Trust, and
(ii) at any other time, within thirty (30) days of receipt by the Trust of
a written request for a List of Holders as of a date no more than fourteen
(14) days before such List of Holders is given to the Property Trustee.
The Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in the List of Holders given to it
or which it receives in the capacity as Paying Agent (if acting in such
capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within sixty (60) days after January 1 of each year, commencing January 1,
2008 the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
The Initial Purchaser of Common Securities, and either the Initial
Purchaser of Common Securities or the Administrative Trustees on behalf of the
Trust, shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 of the Trust Indenture Act (if any)
and shall provide to the Property Trustee the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before one-hundred-twenty (120) days
after the end of each fiscal year of the Initial Purchaser of Common Securities.
Delivery of such documents, reports and information to the Property Trustee is
for informational purposes only and the Property Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including compliance by the
Initial Purchaser of Common
10
Securities with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officer's Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Initial Purchaser of Common Securities, and either the Initial
Purchaser of Common Securities or the Administrative Trustees on behalf of the
Trust, shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Declaration that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default, Waiver.
(a) An Event of Default in respect of the Trust Securities means an
Event of Default (as defined in the Indenture) that has occurred and is
continuing in respect of the Debentures.
(b) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying event of
default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in aggregate principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount
of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(b) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(c) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive
11
any past Event of Default with respect to the Common Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(c), the Event of Default under the Declaration shall
also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as
provided below in this Section 2.6(c), the Event of Default under
the Declaration may only be waived by the vote of the Holders of at
least the proportion in aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided further, the Holders of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and their consequences if all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(c) shall be in lieu
of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(c),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(d) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(d)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7 Event of Default, Notice.
(a) The Property Trustee shall, within ten (10) Business Days after
the Property Trustee has actual knowledge that an Event of Default has
occurred, (i) transmit by mail, first-class postage prepaid, to the
Holders of the Securities and (ii) transmit by any means provided in this
Declaration to the Administrative Trustees and the Initial Purchaser of
Common Securities, notices of all defaults with respect to the Securities
actually known to a Responsible Officer of the Property Trustee, unless
such defaults
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have been cured or waived before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to
be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of
any notice provided therein); provided that, except for a default in the
payment of principal of or Interest (as defined in the Indenture), the
Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.01(a) (other than the payment
or non-payment of Liquidated Damages and Additional Sums) and
5.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer charged
with the administration of the Declaration shall have actual
knowledge.
(c) The Initial Purchaser of Common Securities, and the
Administrative Trustees on behalf of the Trust, shall file annually with
the Property Trustee a certification as to whether or not they are in
compliance with all the conditions and covenants applicable to them under
this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust continued hereby is named "AHM Capital Trust I" as such name may
be modified from time to time by the Administrative Trustees following written
notice to the Delaware Trustee, the Property Trustee and the Holders. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o American Home
Mortgage Investment Corp. , 538 Broadhollow Road, Melville, New York 11747,
Attention: Chief Financial Officer. On ten (10) Business Days' written notice
to the Delaware Trustee, the Property Trustee and the Holders of Securities,
the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Preferred Securities; (b) to issue and sell the Common Securities to
the Initial Purchaser of Common Securities in a total liquidation amount equal
to at least three percent (3%) of the Trust's total
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capital; (c) to use the proceeds from the sale of the Securities to acquire the
Debentures, and (d) except as otherwise limited herein, to engage in only those
other activities necessary, advisable or incidental thereto, including, without
limitation, those activities specified in Sections 3.6, 3.8, 3.9, 3.10, 3.11
and/or 3.12. The Trust shall not acquire any investments, sell or assign Trust
property, borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, take or consent to any action
that would result in the placement of a lien on any of the Trust property, issue
any securities other than the Preferred Securities or Common Securities or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust, or the Debentures to be treated as other than indebtedness of
the Debenture Issuer for United States federal, state and local tax purposes.
SECTION 3.4 Authority.
The Trust shall have the power and authority and is hereby authorized to
undertake the actions set forth above and to own property and conduct its
business as contemplated herein, in the Indenture and in the Purchase Agreement.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Administrative Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action taken
by the Administrative Trustees in accordance with their powers shall constitute
the act of and serve to bind the Trust and an action taken by the Property
Trustee on behalf of the Trust in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees, acting individually or together, shall have
the exclusive power, duty and authority, and are hereby authorized and directed,
to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, (i) the Trust may issue no more than one
series of Preferred Securities and no more than one series of Common
Securities, (ii) there shall be no interests in the Trust other than the
Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Preferred Securities and Common Securities
at the Closing Time;
(b) in connection with the issue and sale of the Preferred
Securities at the direction of the Initial Purchaser of Common Securities,
to:
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(i) execute and file with the Commission, at such time as
determined by the Initial Purchaser of Common Securities, a
registration statement (the "Registration Statement") prepared by
the Initial Purchaser of Common Securities, including any amendments
thereto, covering resales by holders of the Common Stock issuable
upon conversion of Preferred Securities by the holder thereof, and
take all other actions as directed by the Initial Purchaser of
Common Securities in connection with the Registration Rights
Agreement;
(ii) execute and file any documents prepared by the Initial
Purchaser of Common Securities, or take any acts as determined by
the Initial Purchaser of Common Securities to be necessary in order
to qualify or register all or part of the Preferred Securities in
any state or foreign jurisdiction in which the Initial Purchaser of
Common Securities has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application, prepared by the Initial
Purchaser of Common Securities, to the Private Offerings, Resale and
Trading through Automated Linkages ("PORTAL") Market and, at such
time, if any, as determined by the Initial Purchaser of Common
Securities to the New York Stock Exchange, Inc. or any other
national stock exchange for listing or quotation upon notice of
issuance of any Preferred Securities, but if and only if the Initial
Purchaser of Common Securities has authorized the Administrative
Trustees to make such filing;
(iv) execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Preferred
Securities;
(v) execute and enter into the Purchase Agreement providing
for the sale of the Preferred Securities;
(vi) execute and enter into the Registration Rights Agreement
and pursuant thereto execute and file with the Commission a
registration statement on Form S-1 or Form S-3, including any
amendments thereto, prepared by the Initial Purchaser of Common
Securities relating to the registration of the Common Stock under
the Securities Act; and
(vii) execute and file any agreement, certificate or other
document which such Administrative Trustee deems necessary or
appropriate in connection with the issuance and sale of the
Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Administrative Trustees shall cause legal title to the Debentures to
be held of record in the name of the Property Trustee for the benefit of
the Holders of Preferred Securities and Holders of Common Securities;
(d) to give the Initial Purchaser of Common Securities and the
Property Trustee prompt written notice of the occurrence of a Special
Event;
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(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions (subject to Section 15.3 hereof), voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders of
Preferred Securities and Holders of Common Securities as to such actions
and applicable record dates, except as such duty has expressly been
accorded to the Property Trustee under the terms hereof (including Annex
I);
(f) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to defend all claims and demands of all Persons at any time
claiming any liens on any of the Trust property adverse to the interest of
the Trust or the Holders in their capacity as Holders;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(k) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(l) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, Registrar,
Conversion Agent or Exchange Agent for the Securities or to appoint a
Paying Agent for the Securities as provided in Section 7.4, except for
such time as such power to appoint a Paying Agent is vested in the
Property Trustee;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the
Trust to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with this Declaration, the
Certificate of Trust or with applicable law, that the Administrative
Trustees determine in their
16
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust and not as an
association taxable as a corporation or partnership; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes;
provided that any such action does not materially adversely affect the
interests of the Holders of the Preferred Securities or cause the trust to
be treated as other than a grantor trust for United States federal income
tax purposes, or the Debentures to be treated as other than indebtedness
of the Debenture Issuer for United States federal, state and local tax
purposes;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Initial Purchaser of Common Securities.
Any Administrative Trustee shall have the right to resign as
Administrative Trustee by delivery to the Initial Purchaser of the Common
Securities of a written notice of resignation not less than twenty (20) Business
Days prior to the time the resignation is to take effect, and such resignation
shall be effective as provided in the notice of resignation whether or not a
Successor Administrative Trustee shall have been appointed.
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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee and the Delaware Trustee) shall not, engage in any business,
activities or transactions except as expressly provided herein or
contemplated hereby. In particular, the Trust shall not and the
Administrative Trustees shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any investments or assets other than as expressly
provided herein, or engage in any activities not authorized by this
Declaration;
(iii) sell, assign, transfer, exchange, pledge, set-off or
otherwise dispose of any of the Trust property or interests therein,
including to the Holders, except as expressly provided herein;
(iv) take any action or fail to take any action that would
cause the Trust to fail or cease to qualify as a grantor trust for
United States federal income tax purposes, or the Debentures to be
treated as other than indebtedness of the Debenture Issuer for
United States federal, state and local tax purposes ;
(v) possess Trust property for other than a Trust purpose;
(vi) make any loans or incur any indebtedness;
(vii) have any power to, or consent to any action that would
vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders;
(viii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(ix) execute mortgages, pledge, otherwise encumber any of the
Trust's assets or take or consent to any action that would result in
the placement of a lien on any of the Trust property; or
(x) revoke any action previously authorized or approved by a
vote of the Holders of the Preferred Securities, except by
subsequent vote of such Holders.
(b) So long as the Property Trustee holds any Debentures, the
Trustees may not, without obtaining the prior consent of the Holders of a
Majority in liquidation amount of all outstanding Preferred Securities:
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or power
conferred on the Debenture Trustee with respect to the Debentures; (ii)
revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities except by subsequent vote of such
Holders; (iii) waive any past
18
default that is waivable under Section 5.07 of the Indenture; (iv)
exercise any right to rescind or annul a declaration accelerating the
maturity of the principal of the Debentures; or (v) consent to any
amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required; provided further, where a consent
under the Indenture would require the consent of Holders of a Super
Majority of the aggregate principal amount of Debentures affected thereby,
only the Holders of the percentage of that aggregate stated liquidation
amount of the Preferred Securities which is at least equal to the
percentage required under the Indenture may direct the Property Trustee to
give such consent. In addition to obtaining the approval of the Holders of
the Preferred Securities, the Property Trustee shall be under no
obligation to take any of the actions described in clause (iii), (iv) or
(v) unless the Property Trustee has obtained advice of Cadwalader,
Wickersham & Taft LLP or an Opinion of Counsel experienced in such matters
to the effect that the Trust will not fail to be classified as a grantor
trust for federal income tax purposes, or the Debentures as indebtedness
of the Debenture Issuer for United States federal, state and local tax
purposes, after taking the action into account and each Holder will be
treated as owning an undivided beneficial interest in the Debentures. The
foregoing provisions of this Section 3.7(b) are subject to Section 7.8
hereof.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees (in its capacity
as such to the extent that the Person serving as Property Trustee is also
an Administrative Trustee) or to the Delaware Trustee (if the Property
Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of the
Holders and, upon the receipt of payments of funds made in respect
of the Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments or cause the
Paying Agent to make payments to the Holders from the Property
Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall
be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization," as that term is defined
for purposes of Rule 436(g)(2) under the Securities Act, is at least
investment grade;
19
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust
Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Debentures to Holders upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to
the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default
(of which a Responsible Officer has actual knowledge), including in
respect of enforcing rights under the Indenture and the Debentures in
respect of an event of default thereunder, or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders pursuant to the terms
of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7 (a
"Successor Property Trustee").
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible
Officer occurs and is continuing, the Property Trustee shall, for the
benefit of Holders, enforce its rights as holder of the Debentures subject
to the rights of the Holders pursuant to the terms of this Declaration and
the Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons, acceptable to the
Administrative Trustees and the Holder of Common Securities, to act as
additional Paying Agents and to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities
and any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any such additional Paying Agent may be removed by the
Property Trustee at any time the Property Trustee remains as Paying Agent
and a successor Paying Agent or additional Paying Agents may be (but are
not required to be) appointed at any time by the Property Trustee while
the Property Trustee is so acting as Paying Agent.
20
(j) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in this
Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3, and (ii)
the Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the Securities and no
implied covenants or obligations shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his
or her own affairs. If no such Event of Default exists and the Property
Trustee is required to decide between alternative courses of action or to
construe ambiguous provisions in this Declaration or is unsure of the
application of any provision of this Declaration, and the matter is not
one on which Holders of the Preferred Securities or the Common Securities
are entitled under this Declaration to vote, then the Property Trustee
shall take such action as directed by the Holder of Common Securities and,
if not directed, shall take such action as it deems advisable and in the
best interests of the Holders of Preferred Securities and will have no
liability, except for its own bad faith, negligence or willful misconduct.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Property Trustee
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the
Property Trustee; and
21
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not on their
face they conform to the requirements of this Declaration (but
need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein);
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
majority in liquidation amount of the Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures
and the Property Trustee Account shall be to deal with such property
in a similar manner as the Property Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency
of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it. Money held by the Property
Trustee need not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law;
22
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Initial Purchaser of Common Securities with their respective duties
under this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Administrative Trustees (other than
to the extent that the Property Trustee also serves as an
Administrative Trustee) or the Initial Purchaser of Common
Securities; and
(ix) the Property Trustee shall not be deemed to have notice
of any Event of Default unless a Responsible Officer of the Property
Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Property
Trustee at the Corporate Trust Office of the Property Trustee, and
such notice references the Securities and this Indenture, except as
set forth in Section 2.7(b).
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Initial Purchaser of Common
Securities or the Administrative Trustees contemplated by this
Declaration may be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by
the Initial Purchaser of Common Securities or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or re-registration
thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope
of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion, such counsel may be counsel to the
Initial Purchaser of
23
Common Securities or any of its Affiliates, and may include any of
its employees. The Property Trustee shall have the right at any time
to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against
the costs, expenses (including reasonable attorneys' fees and
expenses and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested
in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and the
Property Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent, custodian, nominee or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of
the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to
so act or as to its compliance with any of the terms and provisions
of this Declaration, both of which shall be conclusively evidenced
by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions
from the Holders which instructions may only be given by the Holders
of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall
24
be protected in conclusively relying on or acting in accordance with
such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation
to take any action that is discretionary under the provisions of
this Declaration;
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this
Declaration;
(xiii) the rights, privileges, protections, immunities and
benefits given to the Property Trustee, including, without
limitation, its right to be indemnified, are extended to, and shall
be enforceable by, the Property Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to
act hereunder;
(xiv) the Property Trustee may request that the Initial
Purchaser of Common Securities deliver an Officers' Certificate
setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this
Declaration, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously
delivered and not superseded; and
(xv) The permissive rights of the Property Trustee to do
things enumerated in this Declaration shall not be construed as
duties.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts, or to exercise any such right,
power, duty or obligation. No permissive power or authority available to
the Property Trustee shall be construed to be a duty. In the exercise of
its discretion, the Property Trustee shall take no action or fail to take
any action that, to the actual knowledge of a Responsible Officer of the
Property Trustee, would cause the Trust to be treated as other than a
grantor trust for United States federal income tax purposes, or the
Debentures as other than indebtedness of the Debenture Issuer for United
States federal, state and local tax purposes, provided, however, that the
Property Trustee, at the expense of the Initial Purchaser of Common
Securities, shall consult with legal tax counsel experienced in such
matters in the event of an Event of Default.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee
25
have any of the duties and responsibilities of the Administrative Trustees or
the Property Trustee described in this Declaration. Except as set forth in
Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Statutory Trust
Act. In the event the Delaware Trustee shall at any time be required to take any
action or perform any duty hereunder, the Delaware Trustee shall be entitled to
the benefits of Section 3.9(b)(ii) to (viii), inclusive, and Section 3.10. No
implied covenants or obligations shall be read into this Declaration against the
Delaware Trustee.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Administrative Trustees, and except as
otherwise required by the Statutory Trust Act, any one or more of the
Administrative Trustees is authorized to execute and deliver on behalf of the
Trust any documents, agreements, instruments or certificates that the
Administrative Trustees have the power and authority to execute pursuant to
Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Initial Purchaser of Common Securities, and the
Trustees do not assume any responsibility for their correctness. The Trustees
make no representations as to the value or condition of the property of the
Trust or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence up to July 1, 2042.
SECTION 3.15 Mergers.
(a) The Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease all or substantially all
of its properties and assets to any Person, except as described in Section
3.15(b) and (c) and except with respect to the distribution of Debentures
to Holders pursuant to Section 8.1(a)(iii) of this Declaration or Section
3 of Annex I.
(b) The Trust may, at the request of the Holder of Common
Securities, with the consent of the Administrative Trustees (which consent
will not be unreasonably withheld) and without the consent of the Holders,
the Delaware Trustee or the Property Trustee, merge with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease
all or substantially all of its properties and assets to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (if not the original Trust) (the
"Successor Entity") either:
26
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise, provided, however that the Administrative Trustee
first obtains advice of Cadwalader, Wickersham & Taft LLP or
the opinion of counsel of the Trust experienced in such
matters, to the effect that such substitution would not vary
the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders;
(ii) the Holder of Common Securities expressly appoints a
trustee of any Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the Debentures;
(iii) any such preferred Successor Securities are listed, or
any such preferred Successor Securities will be listed upon
notification of issuance, on any national securities exchange or
with another organization on which the Preferred Securities are then
listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor
Securities) or the Debentures are rated by any nationally recognized
statistical rating organization prior to such transaction, such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause either the Preferred Securities
(including any Successor Securities), or the Debentures to have a
lower rating by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of
any Successor Securities) in any material respect or cause the Trust
or the successor entity to be treated as other than a grantor trust
for United States federal income tax purposes, or the Debentures as
other than indebtedness of the Debenture Issuer for United States
federal, state and local tax purposes;
(vi) any Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, each of the Holder of
Common Securities and the Property Trustee has received advice of
Cadwalader, Wickersham & Taft LLP or an opinion of counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights,
27
preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect;
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust
nor the Successor Entity will be an Investment Company; and
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust
continues to be, and the Successor Entity will be, classified
as a grantor trust for United States federal income tax
purposes;
(viii) the Holder of Common Securities or any permitted
successor or assignee owns all of the common securities of any
Successor Entity and guarantees the obligations of such Successor
Entity under any Successor Securities at least to the extent
provided by the Guarantee Agreement; and
(ix) there shall have been furnished to the Property Trustee
an Officer's Certificate and an Opinion of Counsel, each to the
effect that all conditions precedent in this Declaration to such
transaction have been satisfied.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease all or substantially all of its
properties and assets to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the Successor Entity not to be classified
as a grantor trust for United States federal income tax purposes, or the
Debentures to be treated as other than indebtedness of the Debenture
Issuer for United States federal, state and local tax purposes, or would
cause any holder of the Preferred Securities or the Successor Securities
not to be treated as owning an undivided beneficial interest in the
Debentures.
ARTICLE IV
INITIAL PURCHASER OF COMMON SECURITIES
SECTION 4.1 Purchase of Common Securities by Initial Purchaser.
At the Closing Time, the Initial Purchaser of Common Securities will
purchase all of the Common Securities then issued by the Trust, the aggregate
liquidation amount of which shall at such date equal at least three percent (3%)
of the total capital of the Trust.
SECTION 4.2 Responsibilities of the Initial Purchaser of Common Securities.
In connection with the issue and sale of the Preferred Securities, the
Initial Purchaser of Common Securities shall have the exclusive right and
responsibility to engage in the following activities:
28
(a) to prepare for filing with the Commission the Registration
Statement with respect to the Common Stock issuable upon conversion of the
Preferred Securities, including any amendments thereto;
(b) to determine the states and foreign jurisdictions in which to
take appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts other than actions
which must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Initial Purchaser of Common Securities
deems necessary or advisable in order to comply with the applicable laws
of any such states and foreign jurisdictions;
(c) if so determined by the Initial Purchaser of Common Securities,
to prepare for filing by the Trust an application to PORTAL;
(d) to negotiate the terms of the Purchase Agreement, the
Registration Rights Agreement and other related agreements providing for
the sale of the Preferred Securities; and
(e) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
SECTION 4.3 Right to Proceed.
The Initial Purchaser of Common Securities acknowledges the rights of the
Holders of Preferred Securities, in the event that a failure of the Trust to pay
Distributions on the Preferred Securities is attributable to the failure of the
Debenture Issuer to pay Interest or principal on the Debentures and the rights
of the Holders to institute a proceeding directly against the Debenture Issuer
for enforcement of its payment obligations on the Debentures.
SECTION 4.4 Right to Terminate Trust.
The Holder of Common Securities will have the right at any time to
terminate the Trust and, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, to cause the Debentures to be distributed
to the Holders of the Trust Securities in liquidation of the Trust.
SECTION 4.5 Obligations of the Initial Purchaser.
The Initial Purchaser of Common Securities agrees to take the position,
for United States federal and state income and franchise tax purposes, that (i)
the Trust is a grantor trust and not a partnership or any association taxable as
a corporation, and (ii) the Debentures constitute indebtedness of the Debenture
Issuer.
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ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), consisting of three
(3) Administrative Trustees, the Delaware Trustee and the Property Trustee, and:
(a) at any time before the issuance of any Securities, the Initial
Purchaser of Common Securities may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
three (3); provided further that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or that, if
not a natural person, is an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee to perform ministerial functions who may be an employee or officer of,
or is affiliated with, the Initial Purchaser of Common Securities (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. The term "Administrative Trustees" as used
herein shall include all Trustees who are Administrative Trustees of the Trust,
or if there shall be only one Administrative Trustee, then such term shall be
deemed to refer to such Administrative Trustee. Notwithstanding the above,
unless an Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in liquidation amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Statutory Trust Act, the Delaware Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
30
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Initial Purchaser of Common
Securities; and
(ii) be a corporation or national banking association
organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of
Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least fifty (50)
million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii),
the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Guarantee Agreement shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890,
31
Facsimile: (302) 636-4140
Telephone: (302) 651-1000
Attention: Corporate Capital Markets - AHM Capital Trust I
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Michael Strauss;
Stephen A. Hozie; and
Alan B. Horn,
each at:
c/o American Home Mortgage Investment Corp.
538 Broadhollow Road
Melville, New York 11747
Facsimile: (631) 777-3289
Telephone: (516) 620-1061
Attention: Chief Executive Officer
(a) To the extent that, at any time or from time to time, there is
more than one Administrative Trustee,
(i) except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with
respect to any matter over which the Administrative Trustees have
power to act, any power of the Administrative Trustees may be
exercised by, or with the consent of, any one such Administrative
Trustee; and
(ii) unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Statutory Trust
Act or applicable law, any Administrative Trustee is authorized to
execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6, provided, that, any
Registration Statement referred to in Section 3.6, including any
amendments thereto, shall, to the extent required by applicable law,
be signed by all of the Administrative Trustees.
32
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Attn: Corporate Capital Markets - AHM Capital Trust I
Facsimile: (302) 636-4140
Telephone: (302) 651-1000
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Except as provided otherwise in this Section 5.7 and in Annex I
hereto Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Initial Purchaser of Common Securities;
(ii) after the issuance of any Securities:
(A) unless an Event of Default shall have occurred and
be continuing, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities, or
without a meeting by the written consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(B) if an Event of Default shall have occurred and be
continuing, in which event the Property Trustee or the
Delaware Trustee may be removed only by the vote of Holders of
a Majority in liquidation amount of the Preferred Securities
voting as a class at a meeting of Holders of the Preferred
Securities, or without a meeting by the written consent of the
Holders of a Majority in liquidation amount of the Preferred
Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to
the removed Property Trustee, the remaining Trustees and the Initial
Purchaser of Common Securities; and
(ii) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to
33
the removed Property Trustee, the remaining Trustees and the Initial
Purchaser of Common Securities.
(iii) The Administrative Trustee shall not be removed in
accordance with Section 5.7(a) unless and until at least one other
Trustee shall have been appointed and shall have accepted such
appointment to act as an Administrative Trustee hereunder (a
"Successor Administrative Trustee") by written instrument executed
by such Successor Administrative Trustee and delivered to the
Initial Purchaser of Common Securities.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee
and delivered to the other Trustees, the Initial Purchaser of Common
Securities and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee or Administrative Trustee shall be effective:
(A) except as otherwise provided in Section 3.6, until a
Successor Property Trustee or Successor Administrative
Trustee, as the case may be, has been appointed and has
accepted such appointment by instrument executed by such
Successor Property Trustee or Successor Administrative
Trustee, as the case may be, and delivered to the Trust, the
Delaware Trustee, the Initial Purchaser of Common Securities,
the resigning Property Trustee and/or the resigning
Administrative Trustee, as applicable; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
Holders; and
(ii) No such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Property Trustee, the Initial Purchaser of Common
Securities and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with
this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.7 within sixty (60) days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee resigning
or being removed, as applicable, at the expense of the Initial Purchaser
of Common Securities, may petition any court of competent
34
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper and prescribe, appoint a Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee, Delaware Trustee or Administrative Trustee
shall be liable for the acts or omissions to act of any Successor Property
Trustee, Successor Delaware Trustee or Successor Administrative Trustee,
as the case may be.
(g) At the time of resignation or removal of the Property Trustee,
the Delaware Trustee or Administrative Trustee, the Debenture Issuer shall
pay to such Trustee any amounts that may be owed to such Trustee pursuant
to Section 10.4.
SECTION 5.8 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by an Administrative Trustee shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present
35
(whether in person or by telephone), provided that a Quorum is
present, or without a meeting by the unanimous written consent of the
Administrative Trustees. In the event there is only one Administrative Trustee,
any and all action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other Person his, her or its power
for the purpose of executing any documents contemplated in Section 3.6,
including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of
the Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of this
Declaration.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
If the Property Trustee, the Delaware Trustee or any Administrative
Trustee that is not a natural person, as the case may be, is merged, converted
or consolidated into another Person, or any such Trustee is a party to a merger,
conversion or consolidation that results in a new entity, or any Person succeeds
to all or substantially all the corporate trust business of the Property
Trustee, the Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, the new entity shall be the successor of the
Property Trustee, the Delaware Trustee or the Administrative Trustee, as the
case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided such Person shall
be otherwise qualified and eligible.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. If and to the extent that the
Debenture Issuer makes a payment of Interest (including Liquidated Damages and
Additional Sums) or principal on the Debentures held by the Property Trustee, or
other amounts payable thereunder with respect to overdue installments of
principal or Interest, or any other payments (including, without limitation,
make-whole payments, if any) with respect to the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Trust shall issue one class of convertible trust preferred
securities representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I (the "Preferred
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are
set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable, and each Holder thereof shall be entitled to the
benefits provided by this Declaration.
(d) Each Holder or beneficial owner of any Preferred Security
agrees, for United States federal and state income and franchise tax
purposes:
(i) to treat the Trust as a grantor trust and not as a
partnership or an association taxable as a corporation;
(ii) to the treatment of such Holder or beneficial owner as
a grantor owner of an undivided interest in the Debentures; and
(iii) to treat the Debentures as indebtedness of the
Initial Purchaser of Common Securities;
(e) If contrary to the parties' intent, the Trust is not treated as
a grantor trust for United States federal income tax purposes, the parties
intend that (1) the Trust will be treated as a partnership for United
States federal income tax purposes, (2) all income, gain, losses and
deductions for each taxable year will be allocated among the Holders in a
manner consistent with Section 704 of the Code and the regulations
thereunder, so as to cause the capital accounts of each Holder to equal
the amount that each Holder would be entitled to receive if the Trust were
to liquidate and distribute all of its income and assets in accordance
with the Holders' interests as reflected in the Declaration, and (3) no
allocation to the Holders of the Preferred Securities will be
characterized as a guaranteed payment under Section 707(c) of the Code.
(f) On each day from the date on which the Holder acquires the
Preferred Securities through and including the date on which the Holder
disposes of its interests in such Preferred Securities: (a) such Holder is
not an employee benefit plan or other similar retirement plan or
arrangement, whether or not subject to the Employee
37
Retirement Income Security Act of 1974, as amended ("ERISA") or Section
4975 of the Code (or any similar laws or regulations), or an entity whose
underlying assets are considered to include the assets of any such plans
and arrangements (each, a "Plan") and no part of the assets to be used by
such Holder to acquire and/or hold the Preferred Securities or any
interest therein constitutes plan assets of any Plan or (b) the
acquisition, holding, and, if applicable, conversion of the Preferred
Securities by such Holder will not constitute a non-exempt prohibited
transaction under the Title I of ERISA or Section 4975 of the Code or a
violation under any other applicable laws and regulations that are similar
to the provisions of Title I of ERISA or Section 4975 of the Code; and
(g) Each Preferred Security Certificate will bear the following
legend:
BY ITS ACQUISITION OF THIS CERTIFICATE THE HOLDER REPRESENTS THAT
EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER SIMILAR RETIREMENT
PLAN OR ARRANGEMENT, WHETHER OR NOT SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (OR ANY SIMILAR
LAWS OR REGULATIONS) OR AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED
TO INCLUDE THE ASSETS OF ANY SUCH PLANS AND ARRANGEMENTS (EACH, A "PLAN")
AND NO PART OF THE ASSETS TO BE USED BY THE HOLDER TO ACQUIRE AND/OR HOLD
THIS CERTIFICATE OR ANY INTEREST THEREIN CONSTITUTES PLAN ASSETS OF ANY
PLAN OR (II) THE ACQUISITION, HOLDING, AND, IF APPLICABLE, CONVERSION OF
THIS CERTIFICATE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION
UNDER THE TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION
UNDER ANY OTHER APPLICABLE LAWS AND REGULATIONS THAT ARE SIMILAR TO THE
PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE.
(h) Each Preferred Security Certificate and Common Security
Certificate will bear the following legend:
"THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY ARE SUBJECT TO SIGNIFICANT RESTRICTIONS ON OWNERSHIP AND
TRANSFER. EXCEPT AS OTHERWISE PROVIDED PURSUANT TO AHM CAPITAL TRUST I'S
AMENDED AND RESTATED DECLARATION OF TRUST, DATED JUNE 28, 2007, AS THE
SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME., (I) NO INDIVIDUAL
MAY BENEFICIALLY OWN TRUST SECURITIES IN EXCESS OF 9.8% OF THE TOTAL VALUE
OF THE TRUST SECURITIES, (II) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF
COMMON STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST
SECURITIES
38
OR ANY COMBINATION THEREOF IN EXCESS OF 6.5% OF THE MORE RESTRICTIVE OF
THE TOTAL NUMBER OR VALUE OF THE OUTSTANDING SHARES OF COMMON STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. (TAKING INTO ACCOUNT THE COMMON
STOCK INTO WHICH THE TRUST SECURITIES ARE CONVERTIBLE TO THE EXTENT
PROVIDED IN CODE SECTION 544 AND THE TREASURY REGULATIONS PROMULGATED
THEREUNDER), (III) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF EQUITY
STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR
ANY COMBINATION THEREOF IF IT WOULD CAUSE ANY INDIVIDUAL TO BENEFICIALLY
OWN IN EXCESS OF 6.5% OF THE VALUE OF THE SHARES OF EQUITY STOCK, TREATING
THE TRUST SECURITIES AS EQUITY STOCK OR, ALTERNATIVELY, TREATING THE TRUST
SECURITIES AS THE COMMON STOCK INTO WHICH THEY ARE CONVERTIBLE (TO THE
EXTENT PROVIDED IN CODE SECTION 544 AND THE TREASURY REGULATIONS
PROMULGATED THEREUNDER), IF EITHER TREATMENT WOULD CAUSE THIS PROVISION TO
BE VIOLATED, (IV) NO PERSON MAY BENEFICIALLY OWN SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IF SUCH OWNERSHIP WOULD RESULT IN AMERICAN HOME
MORTGAGE INVESTMENT CORP. BEING "CLOSELY HELD" UNDER SECTION 856(h) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND (V) NO PERSON
MAY BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE
INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IF SUCH
OWNERSHIP WOULD CAUSE AMERICAN HOME MORTGAGE INVESTMENT CORP. TO FAIL TO
QUALIFY AS A REAL ESTATE INVESTMENT TRUST UNDER THE CODE. ANY PERSON WHO
ATTEMPTS OR PROPOSES TO BENEFICIALLY OWN SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY
NOTIFY AMERICAN HOME MORTGAGE INVESTMENT CORP. IN WRITING. IF AN ATTEMPT
IS MADE TO VIOLATE OR THERE IS A VIOLATION OF THESE RESTRICTIONS, (A) ANY
PURPORTED TRANSFER WILL BE VOID AB INITIO AND WILL NOT BE RECOGNIZED BY
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND (B) ANY PURPORTED OR ATTEMPTED
BENEFICIAL OWNERSHIP OF SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE
INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IN
VIOLATION OF THESE RESTRICTIONS, WHETHER AS A RESULT OF A TRANSFER OR
NON-TRANSFER EVENT, WILL BE TRANSFERRED AUTOMATICALLY TO A SHARE TRUST AND
SHALL BE DESIGNATED SHARES-IN-TRUST. ALL TERMS USED IN THIS LEGEND AND
DEFINED IN AHM CAPITAL TRUST I'S AMENDED AND RESTATED DECLARATION OF TRUST
DATED JUNE 28, 2007, HAVE THE MEANINGS PROVIDED IN AHM CAPITAL TRUST I'S
AMENDED AND RESTATED DECLARATION OF TRUST DATED JUNE 28, 2007, AS THE SAME
MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH,
INCLUDING THE RESTRICTIONS ON OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT
CHARGE TO EACH SECURITYHOLDER WHO SO REQUESTS. THIS LEGEND IS INTENDED TO
PREVENT AMERICAN HOME MORTGAGE INVESTMENT CORP. FROM BEING TREATED AS
CLOSELY HELD WITHIN THE
39
MEANING OF SECTION 856(a)(6) AND SECTION 856(h) OF THE INTERNAL REVENUE
CODE, AND SHALL BE CONSTRUED CONSISTENT WITH THIS INTENT."
(i) Every Person, by virtue of having become a Holder or a
beneficial owner in any Global Preferred Security in accordance with the
terms of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust
who shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be delivered
by the Trust, such Securities nevertheless may be delivered as though the
person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not an
Administrative Trustee.
(b) One Administrative Trustee shall sign the Securities for the
Trust by manual or facsimile signature.
A Preferred Security shall not be valid until authenticated by the manual
or facsimile signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by the Initial Holder of Common
Securities, the Property Trustee shall authenticate the Preferred Securities for
original issue. The aggregate number of Preferred Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Initial Purchaser of Common Securities or an
Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities shall be evidenced by one or more certificates
substantially in the form of Exhibit A-1 and the Common Securities shall be
evidenced by one or more certificates substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. The Property Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibit A-1. Certificates representing
the Securities
40
may be printed, lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Administrative Trustees, as evidenced by
their execution thereof. The Securities may have letters, CUSIP or other
numbers, notations or other marks of identification or designation and such
legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Trust). The Trust at the
direction of the Initial Purchaser of Common Securities shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Initial Purchaser of Common Securities,
by their execution and delivery of this Declaration, expressly agree to such
terms and provisions and to be bound thereby.
The Preferred Securities are being offered and sold by the Trust pursuant
to a Purchase Agreement relating to the Preferred Securities, dated June 28,
2007, among the Trust, the Initial Purchaser of Common Securities and the
Purchasers named therein (the "Purchase Agreement").
(a) Global Securities. The Preferred Securities shall initially be
issued in the form of one or more permanent Global Certificates in
definitive, fully registered form without distribution coupons as set
forth in Exhibit A-1 hereto (a "Global Preferred Security"), which shall
be deposited on behalf of the purchasers of the Global Preferred
Securities represented thereby with the Property Trustee, at its Corporate
Trust Office, as custodian for the Clearing Agency, and registered in the
name of the Clearing Agency or a nominee of the Clearing Agency, duly
executed by the Trust and authenticated by the Property Trustee as
hereinafter provided. The number of Preferred Securities represented by a
Global Preferred Security may from time to time be increased or decreased
by adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided. Except as provided
in Section 9.2(g), owners of beneficial interests in a Global Preferred
Security will not be entitled to receive Certificated Preferred
Securities.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
the Global Preferred Securities and such other Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on
behalf of the Clearing Agency.
An Administrative Trustee shall execute and the Property Trustee
shall, in accordance with this Section 7.3, authenticate and make
available for delivery initially one or more Global Preferred Securities
that (i) shall be registered in the name of Cede & Co. or other nominee of
a Clearing Agency and (ii) shall be delivered by the Property Trustee to
such Clearing Agency or pursuant to such Clearing Agency's written
instructions or, if no such written instructions are received by the
Property Trustee, held by the Property Trustee as custodian for the
Clearing Agency.
Clearing Agency Participants shall have no rights under this
Declaration with respect to any Global Preferred Security held on their
behalf by the Clearing Agency or by the Property Trustee as the custodian
of the Clearing Agency or under such Global
41
Preferred Security, and the Clearing Agency may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property Trustee as
the absolute owner of such Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Trust, the Property Trustee or any agent of the Trust or the Property
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Clearing Agency or impair, as between the
Clearing Agency and its Participants, the operation of customary practices
of such Clearing Agency governing the exercise of the rights of a holder
of a beneficial interest in any Global Preferred Security.
(c) Certificated Preferred Securities. Owners of definitive, fully
registered certificated Preferred Securities ("Certificated Preferred
Securities") will not be entitled to receive beneficial interests in a
Global Preferred Security.
(d) Authorized Denominations. The Preferred Securities are issuable
only in denominations of $1,000.00 and any integral multiple thereof.
SECTION 7.4 Registrar, Paying Agent, Conversion Agent and Exchange Agent.
The Trust shall maintain (i) an office or agency where Preferred
Securities may be presented for registration of transfer ("Registrar"), (ii) an
office or agency where Preferred Securities may be presented for payment
("Paying Agent"), (iii) an office or agency where Preferred Securities may be
presented for conversion ("Conversion Agent") and (iv) an office or agency where
Preferred Securities may be presented for repurchase upon the occurrence of a
Change In Control or a Termination of Trading ("Exchange Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer. The
Administrative Trustees may appoint the Registrar, the Paying Agent, the
Conversion Agent and the Exchange Agent and may appoint one or more
co-Registrars, one or more additional paying agents, one or more additional
conversion agents and one or more additional exchange agents in such other
locations as it shall determine. The term "Registrar" includes any additional
registrar, "Paying Agent" includes any additional paying agent, "Conversion
Agent" includes any additional conversion agent and "Exchange Agent" includes
any additional exchange agent. The Administrative Trustees may change any
Registrar, Paying Agent, Conversion Agent or Exchange Agent without prior notice
to any Holder. Any Paying Agent, Conversion Agent or Exchange Agent may be
removed by the Administrative Trustees at any time and a successor Paying Agent
or Conversion Agent or Exchange Agent or additional Paying Agent, Conversion
Agent or Exchange Agent may be appointed at any time by the Administrative
Trustees. The Paying Agent, the Conversion Agent and the Exchange Agent may
resign upon thirty (30) days written notice to the Administrative Trustees. The
Administrative Trustees shall notify the Property Trustee of the name and
address of any Agent not a party to this Declaration. If the Administrative
Trustees fail to appoint or maintain another entity as Registrar, Paying Agent,
Conversion Agent or Exchange Agent, the Property Trustee shall act as such. The
Trust shall act as Paying Agent and Registrar for the Common Securities.
The Trust initially appoints the Property Trustee, at its Corporate Trust
Office, as Registrar, Paying Agent, Conversion Agent and Exchange Agent for the
Preferred Securities.
42
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee all money held by the Paying Agent for the
payment of liquidation amounts or Distributions, and will notify the Property
Trustee if there are insufficient funds for such purpose. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Initial
Purchaser of Common Securities or an Affiliate of the Trust or the Initial
Purchaser of Common Securities acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
SECTION 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been lost, destroyed or
wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Preferred Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall, upon written order of the
Trust, authenticate a replacement Security if the Property Trustee's and the
Trust's requirements, as the case may be, are met. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee and the
Initial Purchaser of Common Securities, is sufficient to protect the Trustees,
the Initial Purchaser of Common Securities, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.
No service charge shall be made to a Holder for any registration or
transfer or exchange, but the Initial Purchaser of Common Securities, on behalf
of the Trust, may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced pursuant to Section 7.6 hereof, it
ceases to be outstanding unless the Property Trustee receives proof satisfactory
to it that the replaced Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the terms
of this Declaration, including upon conversion thereof into Common Stock, they
cease to be outstanding and Distributions on them shall cease to accumulate,
subject, in the case of Preferred Securities which have been converted, to the
rights of Holders as of a record date with respect to the Distribution to be
paid on the applicable Distribution Payment Date.
43
A Preferred Security does not cease to be outstanding because one of the
Trust, the Initial Purchaser of Common Securities or an Affiliate of the Initial
Purchaser of Common Securities holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, a Trustee, the Initial Purchaser of Common Securities or an
Affiliate of the Initial Purchaser of Common Securities, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.
SECTION 7.9 Temporary Securities.
Until definitive Securities are ready for delivery, the Trust may prepare
and, in the case of the Preferred Securities, the Property Trustee shall, upon
receipt of a written order of the Trust, authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and, in the case
of the Preferred Securities, the Property Trustee shall, upon receipt of a
written order of the Trust, authenticate, definitive Securities in exchange for
temporary Securities. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Declaration as definitive
Securities.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent, Conversion Agent and
Exchange Agent shall forward to the Property Trustee any Preferred Securities
surrendered to them for registration of transfer, redemption, conversion,
exchange or payment (including payment following a Change in Control or a
Termination of Trading). The Property Trustee shall promptly cancel all
Preferred Securities, surrendered for registration of transfer, redemption,
conversion, exchange, payment, replacement or cancellation and shall dispose of
cancelled Preferred Securities in accordance with its customary procedures
unless the Trust otherwise directs. The Trust may not issue new Preferred
Securities to replace Preferred Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any Holder has
converted or presented for repayment following a Change in Control or a
Termination of Trading.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such
44
redemption shall not be affected by any defect in or omission of such numbers.
The Initial Purchaser of Common Securities will promptly notify the Property
Trustee of any change in the CUSIP numbers.
SECTION 7.12 Payment.
Payments in respect of the Global Preferred Securities shall be made to
the Clearing Agency or its nominee, and the Clearing Agency shall credit the
relevant accounts at the Clearing Agency. Payments on the Securities issued in
certificated form may be made at the option of the Trust (i) by check mailed to
the Holder at such address set forth on the books and records of the Trust or
the Registrar or (ii) by transfer to an account maintained by the Holder
entitled thereto, provided that proper transfer instructions have been received
in writing by the relevant record date.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Debenture Issuer;
(iii) following the distribution of all of the Debentures to
the Holders, provided that, the Property Trustee has received
written notice from the Holder of Common Securities directing the
Property Trustee to terminate the Trust (which direction is
optional, and except as otherwise expressly provided below, within
the discretion of the Holder of Common Securities);
(iv) upon the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(vi) upon the redemption or repayment of the Debentures at
Maturity;
(vii) the expiration of the term of the Trust provided in
Section 3.14;
(viii) when all of the Preferred Securities shall have been
converted into shares of Common Stock of the Initial Purchaser of
Common Securities; or
(ix) when all Preferred Securities shall have been presented
for repurchase following a Change in Control or a Termination of
Trading and a Like
45
Amount of Debentures shall have been repurchased upon such Change in
Control or a Termination of Trading by the Debenture Issuer.
(b) As soon as is practicable upon completion of winding up of the
Trust following the occurrence of an event referred to in Section 8.1(a),
the Administrative Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware in accordance with the
Statutory Trust Act.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and
void.
(b) For so long as the Trust Securities remain outstanding, the
Initial Purchaser of Common Securities will covenant (i) to maintain,
directly or indirectly, 100% ownership of the Common Securities, provided
that any successor of the Initial Purchaser of Common Securities permitted
hereunder or under the Indenture may succeed to the Initial Purchaser's of
Common Securities ownership of such Common Securities, (ii) not to cause,
as Initial Purchaser of Common Securities of the Trust, or to permit, as
Holder of the Common Securities, the dissolution, winding-up, liquidation
or termination of the Trust, except in connection with a distribution of
the Debentures as provided in the Declaration, the redemption or
repurchase of all of the Trust Securities and in connection with certain
mergers, consolidations or amalgamations in each case, as permitted by
this Declaration, (iii) to use commercially reasonable efforts to cause
the Trust to remain a statutory trust, (iv) to use its reasonable efforts,
consistent with the terms and provisions of this Declaration, to cause the
Trust to remain classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax purposes,
(v) to treat the Debentures as indebtedness of the Initial Purchaser of
Common Securities; and (vi) to use its reasonable efforts to ensure that
the Trust will not be an "investment company" for purposes of the
Investment Company Act of 1940.
(c) The Administrative Trustees shall provide for the registration
of Securities and of the transfer of Securities, which will be effected
without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other
governmental charges that may be imposed in connection with any transfer
or exchange. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall cause one or more new
Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to
46
the Administrative Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Security surrendered
for registration of transfer shall be canceled by the Property Trustee (in
the case of Preferred Securities) or the Trust (in the case of Common
Securities). A transferee of a Security shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Security. By acceptance of a Security, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Each Preferred Security that bears or is required to
bear the Restricted Securities Legend set forth in Section 9.2(c) is
referred to herein as a "Restricted Preferred Security" and shall be
subject to the restrictions on transfer set forth in Section 9.2(c).
Subject to Section 9.2(c), if Preferred Securities are issued upon the
transfer, exchange or replacement of Preferred Securities bearing the
Restricted Securities Legend, or if a request is made to remove such
Restricted Securities Legend on Preferred Securities, the Preferred
Securities so issued shall bear the Restricted Securities Legend, or the
Restricted Securities Legend shall not be removed, as the case may be,
unless there is delivered to the Trust and the Property Trustee such
satisfactory evidence, which may include an Opinion of Counsel, as may be
reasonably required by the Initial Purchaser of Common Securities, that
(i) neither the legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof comply with the provisions
of Rule 144A under the Securities Act or any other available exemption
from the registration requirements of the Securities Act or (ii) that such
Securities may be sold pursuant to the provisions of Rule 144(k) under the
Securities Act. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of an Administrative Trustee on behalf
of the Trust, shall authenticate and deliver Preferred Securities that do
not bear the Restricted Securities Legend.
(b) [Reserved]
(c) Restricted Securities Legend. Except as permitted by the last
paragraph of this Section 9.2(c), each Preferred Security certificate
evidencing the Global Preferred Securities and any Certificated Preferred
Securities (and all Preferred Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following
form (the "Restricted Securities Legend"):
THIS SECURITY AND THE SHARES OF AMERICAN HOME MORTGAGE INVESTMENT CORP.
COMMON STOCK ISSUABLE UPON CONVERSION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF AMERICAN HOME MORTGAGE
INVESTMENT CORP. COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
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THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH AMERICAN HOME MORTGAGE
INVESTMENT CORP. OR ANY AFFILIATE OF AMERICAN HOME MORTGAGE INVESTMENT CORP. WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO AMERICAN HOME MORTGAGE INVESTMENT CORP.'S, AND
THE PROPERTY TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
PROPERTY TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES EVIDENCED HEREBY PURSUANT TO
CLAUSE (C) ABOVE AND THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
Upon any sale or transfer of a Restricted Preferred Security
(including any Restricted Preferred Security represented by a Global
Preferred Security) pursuant to an available exemption from the
registration requirements of the Securities Act and compliance with the
last two sentences of Section 9.2(a) all requirements pertaining to
Restricted Securities Legends on any Preferred Security included within
such sale or transfer will cease to apply, and beneficial interests in a
Preferred Security in global form without Restricted Securities Legends
will be available to transferees of such Preferred Securities. After such
sale or transfer the Administrative Trustees shall execute and deliver and
the Property Trustee shall, upon receipt of a written order of the Trust,
authenticate a Preferred Security in global form without the Restricted
Securities Legend (the "Unrestricted Global Preferred Security") to
deposit with the Clearing Agency to evidence transfers of beneficial
interests from the Global Preferred Security and the Registrar shall
permit the Holder thereof to exchange such Restricted Preferred Security
for an interest in the Unrestricted Global Preferred Security.
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(d) Transfer and Exchange of Certificated Preferred Securities. When
Certificated Preferred Securities are presented to the Registrar or
co-Registrar
(x) to register the transfer of such Certificated Preferred
Securities; or
(y) to exchange such Certificated Preferred Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Certificated Preferred Securities,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Certificated Preferred Securities surrendered for
transfer or exchange
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust
and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and
(ii) in the case of Certificated Preferred Securities that are
Restricted Preferred Securities, and are being transferred or
exchanged, such transfer or exchange shall be pursuant to, and in
compliance with, clause (A), (B) or (C) below:
(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, such Holder shall
deliver a certification to that effect (in the form set forth
on the reverse of the Preferred Security);
(B) such Restricted Preferred Securities are being
transferred to the Initial Purchaser of Common Securities or a
subsidiary thereof; or
(C) if such Restricted Preferred Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144A under the Securities Act or an
available exemption from the registration requirements of the
Securities Act, such Holder shall deliver: (i) a certification
to that effect (in the form set forth on the reverse of the
Preferred Security) and (ii) if the Trust or Registrar so
requests, evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Restricted
Securities Legend.
(e) [Reserved]
(f) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial
interests therein shall be effected through the Clearing Agency, in
accordance with this Declaration (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Clearing
Agency therefor.
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Notwithstanding any other provisions of this Declaration (other than
subsection (g) of this Section 9.2), a Global Preferred Security may not
be transferred as a whole except by the Clearing Agency to a nominee of
the Clearing Agency or another nominee of the Clearing Agency or by the
Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(g) Restrictions on Transfer of a Beneficial Interest in a Global
Preferred Security for a Certificated Preferred Security. Except as
provided below, holders of beneficial interests in a Global Preferred
Security shall not be entitled to have certificates registered in their
names and will not receive physical delivery of certificates in definitive
form.
(i) A Global Preferred Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing
Agency pursuant to Section 7.3 shall be transferred to the
beneficial owners thereof in the form of Certificated Preferred
Securities only if (a) the Clearing Agency notifies the Initial
Purchaser of Common Securities that it is unwilling or unable to
continue as Clearing Agency for such Global Preferred Security or if
at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not
appointed by the Initial Purchaser of Common Securities within
ninety (90) days of such notice, (b) a Default or an Event of
Default has occurred and is continuing or (c) the Trust at its sole
discretion elects to cause the issuance of Certificated Preferred
Securities.
(ii) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Certificated Preferred
Securities pursuant to this Section 9.2 shall be surrendered by the
Clearing Agency to the Property Trustee, to be so transferred, in
whole or from time to time in part, without charge, and the Property
Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Preferred Security, an
equal aggregate liquidation amount of Preferred Securities of
authorized denominations in the form of Certificated Preferred
Securities. Any portion of a Global Preferred Security transferred
pursuant to this Section shall be registered in such names and in
such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or otherwise,
shall instruct the Property Trustee in writing. The Property Trustee
shall deliver such Preferred Securities to the Persons in whose
names such Preferred Securities are so registered in accordance with
such instructions of the Clearing Agency. Any Preferred Security in
the form of Certificated Preferred Securities delivered in exchange
for an interest in the Restricted Global Preferred Security shall,
except as otherwise provided in this Section 9.2, bear the
Restricted Securities Legend.
(iii) In the event of the occurrence of any event specified in
Section 9.2(g)(i), the Trust will promptly make available to the
Property Trustee a reasonable supply of Certificated Preferred
Securities in fully registered form without distribution coupons.
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(h) Cancellation or Adjustment of Global Preferred Security. At such
time as all beneficial interests in a Global Preferred Security have
either been exchanged for Certificated Preferred Securities to the extent
permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Preferred
Security shall be returned to the Clearing Agency for cancellation or
retained and canceled by the Property Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Preferred Security is
exchanged for Certificated Preferred Securities, Preferred Securities
represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Clearing Agency
and the Registrar, to reflect such reduction.
(i) Legend on Global Securities. Any Preferred Security in global
form may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of
this Declaration as may be required by the Clearing Agency or by the
National Association of Securities Dealers, Inc. in order for the
Preferred Securities to be tradable on The PORTAL Market or as may be
required for the Preferred Securities to be tradable on any other market
developed for trading of securities pursuant to Rule 144A or required to
comply with any applicable law or any regulation thereunder or with the
rules and regulations of any securities exchange or automated quotation
system upon which the Preferred Securities may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Securities are
subject.
(j) Obligations with Respect to Transfers of Preferred Securities.
(i) To permit registrations of transfer, the Trust shall execute and the
Property Trustee shall authenticate Global Preferred Securities at the
Registrar's or co-Registrar's request in accordance with the terms of this
Declaration.
(ii) Registrations of transfer will be effected without
charge, but only upon payment (with such indemnity as the Trust or
the Initial Purchaser of Common Securities may require) in respect
of any tax or other governmental charge that may be imposed in
relation to it.
(iii) The Registrar or co-Registrar shall not be required to:
(a) issue, register the transfer of or exchange Preferred Securities
during a period beginning at the opening of business fifteen (15)
days before the day of mailing of a notice of redemption or any
notice of selection of Preferred Securities for redemption and
ending at the close of business on the day of such mailing; or (b)
register the transfer or exchange of any Preferred Security selected
for redemption, in whole or in part except, in the case of any
Preferred Security being redeemed in part, any portion thereof not
to be redeemed.
(iv) Prior to the due presentation for registration of
transfer of any Preferred Security, the Trust, the Property Trustee,
the Paying Agent, the Registrar or any co-Registrar may deem and
treat the Person in whose name a Preferred Security is registered as
the absolute owner of such Preferred Security for the purpose of
receiving Distributions on such Preferred Security and for all other
51
purposes whatsoever, and none of the Trust, the Property Trustee,
the Paying Agent, the Registrar or any co- Registrar shall be
affected by notice to the contrary.
(v) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence
the same security and shall be entitled to the same benefits under
this Declaration as the Preferred Securities surrendered upon such
transfer or exchange.
(k) No Obligation of the Property Trustee. (i) The Property Trustee
shall have no responsibility or obligation to any beneficial owner of a
Global Preferred Security, a Clearing Agency Participant in the Clearing
Agency or other Person with respect to the accuracy of the records of the
Clearing Agency or its nominee or of any Clearing Agency Participant
thereof, with respect to any ownership interest in the Preferred
Securities or with respect to the delivery to any Clearing Agency
Participant, beneficial owner or other Person (other than the Clearing
Agency) of any notice (including any notice of redemption) or the payment
of any amount, under or with respect to such Preferred Securities. All
notices and communications to be given to the Holders and all payments to
be made to Holders under the Preferred Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Clearing Agency or its nominee in the case of a Global Preferred
Security). The rights of beneficial owners in any Global Preferred
Security shall be exercised only through the Clearing Agency subject to
the applicable rules and procedures of the Clearing Agency. The Property
Trustee may conclusively rely and shall be fully protected in relying upon
information furnished by the Clearing Agency or any agent thereof with
respect to its Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Preferred Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in any Global
Preferred Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
52
SECTION 9.4 Book-Entry Interests.
Global Preferred Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency and shall be in the form of a global certificate (the "Global
Certificate"), and no beneficial owner in any Global Preferred Security will
receive a Certificated Preferred Security representing such beneficial owner's
interests in such Global Preferred Securities, except as provided in Section
9.2. Unless and until definitive, fully registered Certificated Preferred
Securities have been issued to the beneficial owners in any Global Preferred
Security pursuant to Section 9.2:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration in respect of Global
Preferred Securities (including the payment of Distributions on the Global
Preferred Securities and receiving approvals, votes or consents hereunder)
as the Holder of the Preferred Securities and the sole holder of the
Global Certificate and shall have no obligation to the beneficial owners
in any Global Preferred Security;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the beneficial owners in any Global Preferred
Security shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such beneficial
owners in any Global Preferred Security and the Clearing Agency and/or the
Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificate to such Clearing Agency
Participants. DTC will make book-entry transfers among the Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required to be given by a Trustee under this Declaration, such Trustee shall
give all such notices and communications specified herein to be given to the
Holders of Global Preferred Securities to the Clearing Agency, and shall have no
notice obligations to the beneficial owners in any Global Preferred Security.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.
53
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantee and the terms of the Securities, the Initial
Purchaser of Common Securities shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders which
shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit
upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer, in its capacity as such, shall be liable
for all of the debts and obligations of the Trust (other than in respect
of the Securities) as provided in the Indenture.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the
Holders shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified Person
by this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might
properly be paid.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting
under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities, the Indemnified
Person shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry
practices, and any applicable U.S. generally accepted accounting
practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of
any duty or obligation of the Indemnified Person at law or in equity
or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest
of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed by
this Declaration.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made
55
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person, against expenses
(including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that he is or
was a Company Indemnified Person against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by
him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified
Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or
in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made by the Common Security Holder of the
Trust.
56
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid
by the Debenture Issuer in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly
made by the Common Security Holder of the Trust, that, based upon
the facts known to the Common Security Holder at the time such
determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where
the Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of
the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Debenture Issuer and each
Company Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or modification
of this Section 10.4(a) shall not affect any rights or obligations
then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status
as such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to the
"Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of
such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the
57
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify (i) the Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee or the Delaware Trustee, and (iv) any officers, directors,
stockholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee or the Delaware Trustee (each
of the Persons in (i) through (iv), including the Property Trustee and the
Delaware Trustee in their respective individual capacities, being referred
to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or bad
faith on the part of such Fiduciary Indemnified Person, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the advancement of funds to cover the costs and
expenses (including reasonable legal fees and expenses) of defending
against or investigating any claim or liability in connection with the
exercise or performance of any of the powers or duties of such Fiduciary
Indemnified Person hereunder. The obligation to indemnify and advance as
set forth in this Section 10.4(b) shall survive the resignation or removal
of the Property Trustee or the Delaware Trustee and the satisfaction and
discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Initial Purchaser of Common Securities, the
Delaware Trustee and the Property Trustee may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Initial Purchaser of
Common Securities, the Delaware Trustee or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Initial Purchaser of
Common Securities, the Delaware Trustee and the Property Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Initial Purchaser of
Common Securities or any Affiliate of the Initial Purchaser of Common
Securities, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Initial
Purchaser of Common Securities or its Affiliates.
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SECTION 10.6 Compensation; Fees.
The Debenture Issuer agrees:
(a) to pay to the Trustees from time to time such compensation for
all services rendered by them hereunder as the parties shall agree in
writing from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the
expenses and disbursements of their respective agents and counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or bad faith.
The provisions of this Section 10.6 shall survive the dissolution of the Trust
and the termination of this Declaration and the removal or resignation of any
Trustee.
No Trustee may claim any lien or charge on any property of the Trust as a
result of any amount due pursuant to this Section 10.6.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with U.S. generally accepted accounting principles, consistently applied.
(b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income
tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the
Administrative Trustees shall endeavor to deliver all such information
statements within thirty (30) days after the end of each Fiscal Year of
the Trust.
(c) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on an
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IRS Form 1041 or such other form required by United States federal income
tax law, and any other annual income tax returns required to be filed by
the Administrative Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3 Banking.
The Trust may maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Paying Agent shall comply with all withholding and
backup withholding tax requirements under United States federal, state and local
law. The Paying Agent on behalf of the Trust shall request, and the Holders
shall provide to the Trust and the Initial Purchaser of Common Securities, such
forms or certificates as are necessary to establish an exemption from
withholding and backup withholding tax with respect to each Holder, including an
IRS Form W-9 or IRS Form W-8 (with all appropriate attachments), or any
successor form, and any representations and forms as shall reasonably be
requested by the Paying Agent on behalf of the Trust to assist it in determining
the extent of, and in fulfilling, its withholding and backup withholding tax
obligations. The Paying Agent shall file required forms with applicable
jurisdictions and, unless an exemption from withholding and backup withholding
tax is properly established by a Holder, shall remit amounts withheld with
respect to the Holder to applicable jurisdictions. To the extent that the Trust
is required to withhold and pay over any amounts to any jurisdiction with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Paying Agent on
behalf of the Trust may reduce subsequent Distributions by the amount of such
required withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended from
time to time by the Initial Purchaser of Common Securities, the Property
Trustee and the Administrative Trustees, without the consent of the
Holders of the Securities (i) to provide for the acceptance of appointment
by a successor trustee as permitted hereby, (ii) to cure any ambiguity,
correct or supplement any provision in the Declaration that may be
defective or inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the
Declaration, which shall not be inconsistent with
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the other provisions of the Declaration, (iii) to modify, eliminate or add
to any provisions of the Declaration to such extent as shall be necessary
to ensure that at all times any Preferred Securities are outstanding, (A)
the Trust will be classified as a grantor trust for United States federal
income tax purposes, (B) the Debentures will be treated as indebtedness of
the Debenture Issuer for United States federal income tax purposes or (C)
the Trust will not be an "investment company" under the Investment Company
Act, or (iv) add to the covenants, restrictions or obligations of the
Initial Purchaser of Common Securities; provided, however, that such
action shall not adversely affect in any material respect the interests of
any Holders of the Securities and any such amendments of the Declaration
shall become effective when notice thereof is given to the Holders of the
Securities.
(b) Except as provided in (c) below, and the terms of the
Securities, this Declaration may be amended by the Trustees and the
Initial Purchaser of Common Securities with the consent of Holders
representing not less than a Majority in liquidation amount of the
outstanding Securities; provided that, if any amendment would adversely
affect only the holders of the Preferred Securities or the Common
Securities, then only the affected class shall be entitled to vote on such
amendment and such amendment shall not be effective except with the
approval of not less than a Majority in liquidation amount of such class
of securities affected thereby.
(c) Without the consent of each Holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the securities as of a
specified date, (ii) change the conversion rate of the Preferred
Securities except as provided in the Indenture or otherwise change the
right to convert the Preferred Securities in a manner that would be
adverse to the Holders, (iii) change any of the redemption provisions or
(iv) restrict the right of a Holder of Securities to institute suit for
the enforcement of any payment on or after the specified date.
(d) Any amendment to the Declaration in accordance with the
provisions of this Section 12.1 shall be conditioned upon the receipt by
the Trustees of advice of Cadwalader, Wickersham & Taft LLP or an Opinion
of Counsel experienced in such matters to the effect that such amendment
or the exercise of any power granted to the Trustees in accordance with
such amendment will not affect the Trust's status as a grantor trust, the
Debentures' status as indebtedness of the Debenture Issuer for United
States federal income tax purposes or the Trust's exemption from status as
an "investment company" under the Investment Company Act.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Administrative Trustees (or as provided in the terms of
the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this
Declaration or the terms of the Securities. The Administrative Trustees
shall call a meeting of the Holders of such class if directed to do so by
the Holders of at least 25% in liquidation amount of such class of
Securities. Such direction
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shall be given by delivering to the Administrative Trustees one or more
notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to
be called. Any Holders calling a meeting shall specify in writing the
Security Certificates held by the Holders exercising the right to call a
meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders:
(i) the Property Trustee will cause a notice to be given of
any such meeting to all the Holders having a right to vote thereat
at least ten (10) days and not more than sixty (60) days before the
date of such meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Declaration or the rules
of any stock exchange on which the Preferred Securities are listed
or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders. Any action that may be taken at a
meeting of the Holders may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the
Holders owning not less than the minimum amount of Securities in
liquidation an amount that would be necessary to authorize or take
such action at a meeting at which all Holders having a right to vote
thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders entitled to
vote who have not consented in writing. The Trustees may specify
that any written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating
at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder
executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if
the Trust were a Delaware corporation and the Holders were
stockholders of a Delaware corporation. The Holder of a Global
Preferred Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests
through Participants, to take any action which such Holder is
entitled to take under this Declaration or the Securities;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
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(iv) unless the Statutory Trust Act, this Declaration, the
terms of the Securities or the Trust Indenture Act, otherwise
provides, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of
Holders, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders, waiver
of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE, DELAWARE TRUSTEE AND HOLDERS OF
PREFERRED SECURITIES
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Initial Purchaser of Common Securities at the date of
this Declaration at the Closing Time and each Successor Property Trustee
represents and warrants to the Trust and the Initial Purchaser of Common
Securities at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a Delaware banking corporation, with
corporate power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee;
(d) No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking authority governing the
trust powers of the Property Trustee is required for the execution,
delivery or performance by the Property Trustee of this Declaration; and
(e) The Property Trustee satisfies the eligibility requirements set
forth in Section 5.3(a).
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SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Initial Purchaser of Common Securities at the date of
this Declaration and at the Closing Time and each Successor Delaware Trustee
represents and warrants to the Trust and the Initial Purchaser of Common
Securities at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the United States or the State of
Delaware, as the case may be, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this Declaration by
the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee;
(d) No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking regulatory authority
governing the trust powers of the Delaware Trustee is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration; and
(e) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
SECTION 13.3 Representations and Warranties of Holders of Preferred Securities.
Each holder of Preferred Securities, by its acceptance or acquisition of a
Security, represents and covenants that:
(a) Upon accepting or acquiring a Preferred Security, such Holder
will provide a properly completed and executed IRS Form W-9, W-8BEN,
W-8ECI, or W-8IMY (with all appropriate attachments), and certifies that
no amounts are required to be deducted or withheld in respect of United
States federal income tax in respect of the Preferred Securities purchased
by such Holder. Such Holder represents and warrants that it will provide a
properly completed and executed IRS Form W-9, W-8BEN, W-8ECI, or W-8IMY or
any successor thereto (with all appropriate attachments), that eliminates
United States federal withholding tax and backup withholding tax on
payments under the Declaration promptly upon the request of
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an Administrative Trustee and prior to any such form previously provided
by such Holder becoming obsolete or incorrect.
(b) If such Holder of Preferred Securities is not a United States
Person for United States federal income tax purposes (a "U.S. Person"),
then such Holder will irrevocably appoint a U.S. Person with discretionary
powers to act as its agent with respect to consents and other votes under
the Preferred Securities of such Holder, at such time that any such
consent or other vote arises under the Declaration. Note: Purchasers that
are not U.S. Persons are required to irrevocably appoint a U.S. Person
with discretionary authority as their agent with respect to any matter
that requires consent or a vote at such time that any such consent or
other vote arises under the Declaration. Any successor agent of a foreign
purchaser must also be a U.S. Person
(c) Such Holder represents and warrants that it will, unless
otherwise required by law, (i) treat the Trust as a grantor trust for
United States federal income tax purposes, (ii) treat the Securities as
undivided beneficial ownership interests in the Trust Property for United
States federal income tax purposes, and (iii) treat the Debentures as
indebtedness of the Debenture Issuer for United States federal income tax
purposes.
(d) Such Holder acknowledges that the Trust, the Debenture Issuer,
the Guarantor and others will rely upon the truth and accuracy of the
foregoing acknowledgments, representations, warranties and agreements and
agree that if any of the acknowledgments, representations, warranties and
agreements deemed to have been made by the purchase of the Preferred
Securities are no longer accurate, such Holder shall promptly notify the
Debenture Issuer.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights.
The shares of Common Stock issuable upon conversion of the Preferred
Securities are entitled to the benefits of a Registration Rights Agreement as
set forth in the Purchase Agreement, the Registration Rights Agreement and the
Indenture.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, by facsimile, or
mailed by first-class mail, overnight courier service or confirmed facsimile, as
follows:
(a) if given to the Trust, in care of the Administrative Trustee at
the mailing address set forth below (or such other address as the Trust
may give notice of to the Property Trustee, the Delaware Trustee and the
Holders):
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AHM Capital Trust I
c/o American Home Mortgage Investment Corp.
538 Broadhollow Road
Melville, New York 11747
Facsimile: (631) 777-3289
Telephone: (516) 620- 1061
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders):
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Facsimile: (302) 636-4140
Telephone: (302) 651-1000
Attention: Corporate Capital Markets - AHM Capital Trust I
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Facsimile: (302) 636-4140
Telephone: (302) 651-1000
Attention: Corporate Capital Markets - AHM Capital Trust I
(d) if given to the Holder of the Common Securities, at the mailing
address of the Initial Purchaser of Common Securities set forth below (or
such other address as the Holder of the Common Securities may give notice
to the Property Trustee and the Trust):
American Home Mortgage Investment Corp.
538 Broadhollow Road
Melville, New York 11747
Facsimile: (631) 777-3289
Telephone: (516) 620- 1061
Attention: Chief Financial Officer
(e) if given to Initial Purchaser of Common Securities, at the
mailing address of the Initial Purchaser of Common Securities set forth
below (or such other address as the Initial Purchaser of Common Securities
may give notice to the Property Trustee and the Trust):
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American Home Mortgage Investment Corp.
538 Broadhollow Road
Melville, New York 11747
Facsimile: (631) 777-3289
Telephone: (516) 620- 1061
Attention: Chief Financial Officer
(f) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when received in
person, by facsimile with receipt confirmed, or mailed by first-class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.2 Holder Information Reporting
On the request of the Debenture Issuer, each Holder of Securities agrees
to timely provide the Debenture Issuer with any information that could be
requested of such Holder of Securities under the Code or Treasury Regulations,
including Treasury Regulations Section 1.857-8, as if the Securities were equity
of the Debenture Issuer, and if specified therein, at such times and in such
forms as provided.
SECTION 15.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
SECTION 15.4 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified as
a grantor trust for United States federal, state and local tax purposes, that
the Preferred Securities (including but not limited to all payments and proceeds
with respect to the Preferred Securities) be classified as undivided beneficial
ownership interests in the Debentures (and payments and proceeds therefrom,
respectively) for United States federal, state and local tax purposes and that
the Debentures be treated as indebtedness for United States federal, state and
local tax purposes. The provisions of this Declaration shall be interpreted to
further this intention of the parties.
SECTION 15.5 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
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SECTION 15.6 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Initial
Purchaser of Common Securities and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 15.7 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 15.8 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages, whether by manual or facsimile signature, shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
ARTICLE XVI
CERTAIN RESTRICTIONS ON TRANSFER
SECTION 16.1 Restrictions and Limitations on Ownership of the Trust Securities
and Equity Stock of the Corporation; REIT Provisions.
Until the Restriction Termination Date, the Trust Securities shall
be subject to the following limitations on ownership, unless the Corporation at
the direction of its Board of Directors waives the limitation. Any violation of
this section shall be treated as a violation of the Ownership Limit for Equity
Stock and Trust Securities in American Home Mortgage Investment Corp.'s Charter
and this Declaration, respectively, and as provided below, the affected Equity
Stock and/or Trust Securities shall be transferred automatically to a Share
Trust and designated as Shares-in-Trust:
(a) Definitions. Capitalized terms used in this Article XVI (even if
otherwise defined in this Declaration) shall have the following meanings:
"Acquire" shall mean the acquisition of Beneficial Ownership of
Equity Stock or Trust Securities whether by a Transfer, Non-Transfer Event or by
any other means, including, without limitation, acquisition pursuant to the
acquisition or exercise of any option, warrant, pledge or other security
interest or similar right to acquire Equity Stock or Trust Securities, but shall
not include the acquisition of any such rights unless, as a result, the acquiror
would be considered a Beneficial Owner, as defined below. "Acquisition" shall
have the correlative meaning.
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"Beneficial Ownership" shall mean ownership of Equity Stock or Trust
Securities by a Person who would be treated as an owner of such Equity Stock or
Trust Securities either directly or indirectly under Section 542(a)(2) of the
Code, taking into account, for this purpose, constructive ownership determined
under Section 544 of the Code, as modified by Sections 856(h)(1)(B) and
856(h)(3)(A) of the Code and determined without regard to whether such ownership
has the effect of meeting the stock ownership requirement of Section 542(a)(2)
of the Code. The terms "Beneficial Owner," "Beneficially Own" and "Beneficially
Owned" shall have the correlative meanings.
"Common Stock", for purposes of this Article XVI, shall mean the
common stock, par value $0.01 per share of the Corporation, taking into account
any shares of Common Stock issuable upon conversion of the Trust Securities on
an as-converted basis.
"Charitable Beneficiary" shall mean, with respect to any Share
Trust, one or more organizations described in each of Section 170(b)(1)(A)
(other than clauses (vii) or (viii) thereof) and Section 170(c)(2) of the Code
that are named by the Corporation as the beneficiary or beneficiaries of such
Share Trust, in accordance with the provisions of Section 16.2(a).
"Code", for purposes of this Article XVI, shall mean the Internal
Revenue Code of 1986, as amended and in effect from time to time, or any
successor statute thereto, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Corporation" shall mean American Home Mortgage Investment Corp.,
a Maryland corporation.
"Equity Stock" shall mean the Common Stock and the Preferred Stock
collectively.
"Excepted Holder" shall mean a holder of Common Stock and/or Equity
Stock and/or Trust Securities for whom an Excepted Holder Limit is created by
the Board of Directors pursuant to or as contemplated by Section 16.1(f).
"Excepted Holder Limit" shall mean, provided that the affected
Excepted Holder agrees to comply with any requirements established by the Board
of Directors pursuant to or as contemplated by Section 16.1(f), as applicable to
such Excepted Holder, the ownership limit with respect to the Common Stock,
Equity Stock, or Trust Securities (or any combination of the foregoing) of the
Corporation established by the Board with respect to such Excepted Holder,
pursuant to or as contemplated by Section 16.1(f). The Excepted Holder Limit,
unless and insofar as may otherwise be provided upon the establishment thereof,
shall apply to an Excepted Holder in lieu of the Ownership Limit, and the
Excepted Holder Limit may be made applicable to any or all of the Common Stock,
the Equity Stock or the Trust Securities (or any combination thereof).
"Individual" shall mean a human being.
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"Market Price" on any date shall mean, with respect to any class or
series of outstanding shares of the Corporation's stock, the Closing Price for
such shares on such date. The "Closing Price" on any date shall mean the last
sale price for such shares, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, for such
shares, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange or the NASDAQ Stock Market or, if such shares are not
listed or admitted to trading on the New York Stock Exchange or the NASDAQ Stock
Market, as reported on the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such shares are listed or admitted to trading or, if such shares are
not listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc., Automated Quotation System, or, if such system is
no longer in use, the principal other automated quotation system that may then
be in use or, if such shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such shares selected by the Board of Directors
or, in the event that no trading price is available for such shares, the fair
market value of the shares, as determined in good faith by the Corporation's
Board of Directors.
"Non-Transfer Event" shall mean an event other than a purported
Transfer that would cause any Person to Beneficially Own Common Stock, Equity
Stock or Trust Securities (or any combination of the foregoing) in excess of the
Ownership Limit (or would cause the Corporation to fail to qualify as a REIT),
including, without limitation, a change in the capital structure of the
Corporation.
"Ownership Limit" shall initially mean (i) with respect to the
Common Stock, 6.5% of whichever is the more restrictive of (a) the total number,
and (b) the value of the outstanding shares of Common Stock (taking into account
the Common Stock into which the Trust Securities are convertible to the extent
provided in Code Section 544 and the Treasury Regulations promulgated
thereunder), (ii) with respect to the Equity Stock, 6.5% of the value of the
outstanding shares of Equity Stock, treating the Trust Securities as Equity
Stock or, alternatively, treating the Trust Securities as the Common Stock into
which they are convertible (to the extent provided in Code Section 544 and the
Treasury Regulations promulgated thereunder), if either treatment would cause
the Ownership Limit to be violated and (iii) with respect to the Trust
Securities, 9.8% of the total value of the outstanding Trust Securities.
"Permitted Transferee" shall mean any Person designated as a
permitted transferee in accordance with the provisions of Section 16.2(e).
"Person" shall mean an Individual, corporation, partnership, limited
liability company or partnership, estate, trust (including a trust qualified
under Section 401(a) or 501(c)(17) of the Code), a portion of a trust
permanently set aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other entity and
also includes a group as that term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, but does not include an
underwriter that participates in a public offering of the
70
Corporation's Common Stock and/or other Equity Stock for a period of thirty (30)
days following purchase by such underwriter of the Common Stock and/or other
Equity Stock.
"Preferred Stock" shall mean shares of preferred stock, par value
$0.01 per share of the Corporation.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer that results in Shares-in-Trust as defined below, the
purported beneficial transferee for whom the Purported Record Transferee would
have Acquired shares of Equity Stock or Trust Securities of the Corporation if
such Transfer had not violated Section 16.1(b).
"Purported Record Transferee" shall mean, with respect to any
purported Transfer that results in Shares-in-Trust, the Person who would have
been the record holder of the shares of Equity Stock or Trust Securities of the
Corporation if such Transfer had been valid under Section 16.1(b).
"REIT" shall mean a real estate investment trust under Section 856
et seq. of the Code.
"Restriction Termination Date" shall mean the first day on which the
Corporation determines pursuant to the Charter that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT.
"Share Trust" shall mean any separate trust created pursuant to
Section 16.2(a) and administered in accordance with the terms of Section 16.2
for the exclusive benefit of any Charitable Beneficiary.
"Shares-in-Trust" shall mean any shares of Equity Stock or amount of
Trust Securities designated Shares-in-Trust pursuant to Section 16.2(a).
"Share Trustee" shall mean the trustee of the Share Trust, which is
selected by the Corporation but not affiliated with the Corporation or the
Charitable Beneficiary, and any successor trustee appointed by the Corporation.
"Transfer" shall mean any sale, transfer, gift, assignment, devise
or other disposition of shares of Equity Stock or Trust Securities or the right
to vote on Equity Stock or Trust Securities or receive dividends on shares of
Equity Stock or distributions on the Trust Securities (including, without
limitation, (i) the granting of any option or entering into any agreement for
the sale, transfer or other disposition of shares of Equity Stock or Trust
Securities or the right to vote on Equity Stock or Trust Securities or receive
dividends on shares of Equity Stock or distributions on Trust Securities or (ii)
the sale, transfer, assignment or other disposition or grant of securities or
rights convertible into or exchangeable for shares of Equity Stock or Trust
Securities, or the right to vote on Equity Stock or Trust Securities or receive
dividends on shares of Equity Stock or distributions on Trust Securities,
whether voluntary or involuntary, whether of record or beneficially and whether
by operation of law or otherwise.
(b) Ownership Limitation and Transfer Restrictions.
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(i) Except as provided in or by operation of Section 16.1(f), prior
to the Restriction Termination Date: (w) no Individual shall have Beneficial
Ownership of Common Stock, Equity Stock or Trust Securities (or any combination
thereof) in excess of the Ownership Limit; (x) no Excepted Holder shall have
Beneficial Ownership of Common Stock, Equity Stock or Trust Securities in excess
of the Excepted Holder Limit for such Excepted Holder; and (y) no Person shall
Acquire shares of Equity Stock or Trust Securities or any interest therein if,
as a result of such acquisition, the Corporation would be "closely held" within
the meaning of Section 856(h) of the Code, or would otherwise fail to qualify as
a REIT, as the case may be.
(ii) Any Transfer that would result in a violation of the
restrictions in Section (b)(i) above, shall be void ab initio as to the
purported Transfer of such number of shares of Common Stock or Equity Stock or
amount of Trust Securities that would cause the violation of the applicable
restriction in Section (b)(i) above, and the Purported Record Transferee (and
the Purported Beneficial Transferee, if different) shall acquire no rights in
such shares of Equity Stock or amount of Trust Securities.
(c) Automatic Transfer to Share Trust.
(i) If, at any time prior to the Restriction Termination Date, there
is a purported Transfer or Non-Transfer Event such that, if effective, would
result in any Individual having Beneficial Ownership of Common Stock, Equity
Stock or Trust Securities (or any combination of the foregoing) in excess of the
Ownership Limit, any Excepted Holder having Beneficial Ownership of Common
Stock, Equity Stock or Trust Securities (or any combination of the foregoing) in
excess of the Excepted Holder Limit as applicable to such Excepted Holder) then,
except as otherwise provided in or by operation of Section 16.1(f) as to such
Individual or Excepted Holder (x) the Purported Record Transferee (and the
Purported Beneficial Transferee, if different) shall acquire no right or
interest (or, in the case of a Non-Transfer Event, the person holding record
title to the shares of Common Stock or Equity Stock or amount of Trust
Securities (or any combination of the foregoing) Beneficially Owned by such
Beneficial Owner shall cease to own any right or interest) in such number of
shares of Common Stock or Equity Stock or amount of Trust Securities (or any
combination of the foregoing) that would cause such Purported Record Transferee
(and the Purported Beneficial Transferee, if different) to Beneficially Own
shares of Common Stock, Equity Stock or Trust Securities in excess of the
Ownership Limit or Excepted Holder Limit, as the case may be (rounded up to the
nearest whole share, if applicable), (y) such number of shares of Common Stock
or Equity Stock or amount of Trust Securities (or any combination of the
foregoing) in excess of the Ownership Limit or Excepted Holder Limit, as the
case may be (rounded up to the nearest whole share or penny, as applicable),
shall be designated Shares-in-Trust and, in accordance with the provisions of
Section 16.2(a), transferred automatically and by operation of this Declaration
to the Share Trust to be held in accordance with Section 16.2, and (z) such
Purported Record Transferee (and the Purported Beneficial Transferee, if
different) shall submit such number of shares of Common Stock or Equity Stock or
amount of Trust Securities (or any combination of the foregoing) to the Share
Trust for registration in the name of the Share Trustee. Any Purported Record
Transferee (and the Purported Beneficial Transferee, if different) shall acquire
no right or interest (or, in the case of a Non-Transfer Event, the person
holding title to the shares Beneficially Owned by such Beneficial Owner shall
cease to own any right or interest) in such number of shares or amount of Trust
Securities that would cause such person to own shares or an amount of Trust
Securities in
72
excess of the Ownership Limit or Excepted Holder Limit, as the case may be. Such
transfer to a Share Trust and the designation of shares or amount of Trust
Securities as Shares-in-Trust shall be effective as of the close of business on
the business day prior to the date of the Transfer or Non-Transfer Event, as the
case may be.
(ii) If, at any time prior to the Restriction Termination Date,
there is a purported Transfer or Non-Transfer Event that, if effective, would
(i) result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code or (ii) cause the Corporation to otherwise fail to qualify as
a REIT, as the case may be, then (x) the Purported Record Transferee (and the
Purported Beneficial Transferee, if different) shall acquire no right or
interest (or, in the case of a Non-Transfer Event, the person holding record
title to the shares of Equity Stock or Trust Securities with respect to which
such Non-Transfer Event occurred, shall cease to own any right or interest) in
such number of shares of Equity Stock or amount of Trust Securities (or any
combination of the foregoing), the ownership of which by such Purported Record
Transfer (and the Purported Beneficial Transferee, if different) would (A)
result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code or (B) otherwise cause the Corporation to fail to qualify as
a REIT, as the case may be, then (y) such number of shares of Equity Stock
(rounded up to the nearest whole share) or amount of Trust Securities (rounded
up to the nearest penny) (or any combination of the foregoing) shall be
designated Shares-in-Trust and, in accordance with the provisions of Section
16.2(a), transferred automatically and by operation of this Declaration to the
Share Trust to be held in accordance with Section 16.2, and (z) the Purported
Record Transferee (and the Purported Beneficial Transferee, if different) shall
submit such number of shares of Equity Stock or amount of Trust Securities (or
any combination of the foregoing), as the case may be, to the Share Trust for
registration in the name of the Share Trustee.
(iii) To the extent that, upon a purported Transfer or Non-Transfer
Event, a violation of any restriction set forth in Section 16.1(b)(i) above
would nonetheless be continuing (for example, where the ownership of Equity
Stock or Trust Securities by a single Share Trust would violate the restriction
that the Corporation must not be "closely held"), then shares of Equity Stock or
amounts of Trust Securities shall be transferred to that number of Share Trusts,
each having a distinct Share Trustee and a Charitable Beneficiary or Charitable
Beneficiaries that are distinct from those of each other Share Trust, such that
there is no violation of any restriction set forth in Section 16.1(b)(i).
(d) Remedies for Breach. If the Board of Directors or the Corporation or
its designee shall at any time determine in good faith that a person intends to
acquire or has attempted to acquire Beneficial Ownership of Common Stock, Equity
Stock or Trust Securities (or any combination thereof) in violation of Section
16.1(b), or that a purported Transfer of Common Stock or Equity Stock or Trust
Securities (or any combination thereof) has otherwise taken place in violation
of Section 16.1(b), the Board of Directors or the Corporation or its designee
shall take such action as it deems advisable to refuse to give effect to or to
prevent such Transfer or acquisition, including, but not limited to, refusing to
give effect to such Transfer or acquisition on the books of the Corporation or
instituting proceedings to enjoin such Transfer or acquisition; provided,
however, that any Transfer, attempted Transfer, acquisition or attempted
acquisition in violation of Section 16.1(b)(i) shall automatically result in the
Transfer described in Section
73
16.1(c), irrespective of any action (or non-action) by the Board of Directors,
except as provided in Section 16.1(f).
(e) Notice of Restricted Transfer.
(i) Any Person who acquires or attempts to acquire Common Stock,
Equity Stock or Trust Securities in violation of Section 16.1(b), and any Person
who is a Purported Record Transferee or a Purported Beneficial Transferee of
shares of Common Stock, Equity Stock or Trust Securities that are transferred to
a Share Trust under Section 16.1(c), shall immediately give written notice to
the Corporation of such event, shall submit to the Corporation such number of
shares of Common Stock or Equity Stock or amount of Trust Securities to be
transferred to the Share Trust and shall provide to the Corporation such other
information as the Corporation may request in order to determine the effect, if
any, of such Transfer or attempted Transfer or such Non-Transfer Event on the
Corporation's status as a REIT.
(ii) Prior to the Restriction Termination Date, each Person who is a
Beneficial Owner of Trust Securities of the Corporation (treating the Trust
Securities as Equity Stock for this purpose) and each Person (including a Trust
Securities holder of record) who is holding Trust Securities of the Corporation
for a Beneficial Owner shall provide to the Corporation such information as the
Corporation may reasonably request in order to determine the Corporation's
status as a REIT, to comply with the requirements of any taxing authority or
governmental agency or to determine any such compliance and to ensure compliance
with the Ownership Limit or Excepted Holder Limit as applicable to such
Beneficial Owner.
(f) Exceptions.
(i) The Board of Directors may, but in no case shall the Board of
Directors be required to, waive, in whole or in part, application of the
Ownership Limit or Excepted Holder Limit to a Person otherwise subject to such
limit and/or establish, in lieu of the Ownership Limit or Excepted Holder Limit,
or any portion or aspect thereof, then applicable to such Person, an Excepted
Holder Limit (or a new Excepted Holder Limit) as applicable to the ownership,
beneficial or otherwise, of Common Stock and/or Equity Stock and/or Trust
Securities by such Person, if it concludes that the ownership of Common Stock
and/or Equity Stock and/or Trust Securities by such Person will not (A) result
in the Corporation being "closely held" within the meaning of Section 856(h) of
the Code or (B) otherwise cause the Corporation to fail to qualify as a REIT
under the Code; provided, however, that (i) the Board of Directors obtains from
such Person such representations and undertakings, if any, as the Board of
Directors may in its sole discretion require (including, without limitation, an
agreement as to a reduced Ownership Limit or Excepted Holder Limit for such
Person), and (ii) such Person agrees in writing that any violation or attempted
violation of any such or any other limitations as the Board of Directors may
establish for such Person, or such other restrictions as the Board may in its
sole discretion impose with respect to such Person at the time of granting such
waiver or exception, will result in transfer to the Share Trust of Common Stock,
Equity Stock or Trust Securities pursuant to Section 16.1(c). In making any
determination to waive application of the Ownership Limit or Excepted Holder
Limit or to establish an Excepted Holder Limit (or a new Excepted Holder Limit)
for any Person, the Board of Directors, in its sole and absolute discretion,
may, but shall not be required to, receive either a certified copy of a ruling
from the Internal Revenue Service or
74
an opinion of counsel satisfactory to the Board of Directors that concludes that
the ownership of Equity Stock or Trust Securities by such Person will not (A)
result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code or (B) otherwise cause the Corporation to fail to qualify as
a REIT under the Code. Unless and until the Board of Directors waives the
application of the Ownership Limit or Excepted Holder Limit as applicable to any
Person (or even thereafter insofar as such waiver did not or does not operate to
relieve some restrictive portion or aspect of the Ownership Limit or Excepted
Holder Limit as applicable to such Person), the Ownership Limit and/or Excepted
Holder Limit, as applicable, shall apply to such Person, notwithstanding the
fact that if such Person were otherwise to Acquire Equity Stock or Trust
Securities in excess of the Ownership Limit or Excepted Holder Limit, as
applicable, such Acquisition would not adversely affect the Corporation's
qualification as a REIT under the Code.
(ii) If the Board of Directors makes a determination to waive the
Ownership Limit or Excepted Holder Limit, or to establish an Excepted Holder
Limit (or a new Excepted Holder Limit) as applicable to any Person, the Board
may revoke the waiver, or reduce the Excepted Holder Limit applicable to an
Excepted Holder, only (a) with the written consent of such Person at any time,
or (b) pursuant to the terms and conditions of the representations and
undertakings, if any, entered into with such Person in connection with the
granting of the waiver or the establishment of the Excepted Holder Limit for
such Person. No Excepted Holder Limit shall be reduced to a percentage that is
less than the Ownership Limit. Notwithstanding the foregoing, nothing in this
Section 16.1(f)(ii) is intended to limit or modify the restrictions on ownership
contained in Section 16.1(b) hereof and the authority of the Board of Directors
under this Section 16.1(f).
(g) Legend. Each Preferred Security Certificate shall bear substantially
the following legend:
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY ARE SUBJECT TO SIGNIFICANT RESTRICTIONS ON OWNERSHIP AND
TRANSFER. EXCEPT AS OTHERWISE PROVIDED PURSUANT TO AHM CAPITAL TRUST I'S
AMENDED AND RESTATED DECLARATION OF TRUST, DATED JUNE 28, 2007, AS THE
SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, (I) NO INDIVIDUAL
MAY BENEFICIALLY OWN TRUST SECURITIES IN EXCESS OF 9.8% OF THE TOTAL VALUE
OF THE TRUST SECURITIES, (II) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF
COMMON STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST
SECURITIES OR ANY COMBINATION THEREOF IN EXCESS OF 6.5% OF THE MORE
RESTRICTIVE OF THE TOTAL NUMBER OR VALUE OF THE OUTSTANDING SHARES OF
COMMON STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. (TAKING INTO
ACCOUNT THE COMMON STOCK INTO WHICH THE TRUST SECURITIES ARE CONVERTIBLE
TO THE EXTENT PROVIDED IN CODE SECTION 544 AND THE TREASURY REGULATIONS
PROMULGATED THEREUNDER), (III) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES
OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST
SECURITIES OR ANY COMBINATION THEREOF IF IT WOULD CAUSE ANY INDIVIDUAL TO
BENEFICIALLY OWN IN EXCESS OF 6.5% OF THE VALUE OF THE SHARES OF
75
EQUITY STOCK, TREATING THE TRUST SECURITIES AS EQUITY STOCK OR,
ALTERNATIVELY, TREATING THE TRUST SECURITIES AS THE COMMON STOCK INTO
WHICH THEY ARE CONVERTIBLE (TO THE EXTENT PROVIDED IN CODE SECTION 544 AND
THE TREASURY REGULATIONS PROMULGATED THEREUNDER), IF EITHER TREATMENT
WOULD CAUSE THIS PROVISION TO BE VIOLATED, (IV) NO PERSON MAY BENEFICIALLY
OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR
TRUST SECURITIES OR ANY COMBINATION THEREOF IF SUCH OWNERSHIP WOULD RESULT
IN AMERICAN HOME MORTGAGE INVESTMENT CORP. BEING "CLOSELY HELD" UNDER
SECTION 856(h) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), AND (V) NO PERSON MAY BENEFICIALLY OWN SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IF SUCH OWNERSHIP WOULD CAUSE AMERICAN HOME MORTGAGE
INVESTMENT CORP. TO FAIL TO QUALIFY AS A REAL ESTATE INVESTMENT TRUST
UNDER THE CODE. ANY PERSON WHO ATTEMPTS OR PROPOSES TO BENEFICIALLY OWN
SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST
SECURITIES OR ANY COMBINATION THEREOF IN EXCESS OF THE ABOVE LIMITATIONS
MUST IMMEDIATELY NOTIFY AMERICAN HOME MORTGAGE INVESTMENT CORP. IN
WRITING. IF AN ATTEMPT IS MADE TO VIOLATE OR THERE IS A VIOLATION OF THESE
RESTRICTIONS, (A) ANY PURPORTED TRANSFER WILL BE VOID AB INITIO AND WILL
NOT BE RECOGNIZED BY AMERICAN HOME MORTGAGE INVESTMENT CORP. AND (B) ANY
PURPORTED OR ATTEMPTED BENEFICIAL OWNERSHIP OF SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IN VIOLATION OF THESE RESTRICTIONS, WHETHER AS A
RESULT OF A TRANSFER OR NON-TRANSFER EVENT, WILL BE TRANSFERRED
AUTOMATICALLY TO A SHARE TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST.
ALL TERMS USED IN THIS LEGEND AND DEFINED IN AHM CAPITAL TRUST I'S AMENDED
AND RESTATED DECLARATION OF TRUST DATED JUNE 28, 2007, HAVE THE MEANINGS
PROVIDED IN AHM CAPITAL TRUST I'S AMENDED AND RESTATED DECLARATION OF
TRUST DATED JUNE 28, 2007, AS THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON OWNERSHIP AND
TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH SECURITYHOLDER WHO SO
REQUESTS. THIS LEGEND IS INTENDED TO PREVENT AMERICAN HOME MORTGAGE
INVESTMENT CORP. FROM BEING TREATED AS CLOSELY HELD WITHIN THE MEANING OF
SECTION 856(a)(6) AND SECTION 856(h) OF THE INTERNAL REVENUE CODE, AND
SHALL BE CONSTRUED CONSISTENT WITH THIS INTENT.
(h) Remedies Not Limited. Nothing contained in this Article XVI shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable to protect the Corporation and the interests of its
stockholders in preserving the Corporation's status as a REIT.
76
(i) Ambiguity. In the case of an ambiguity in the application of any of
the provisions, including any definition contained in Section 16.1(a) hereof,
the Board of Directors shall have the power to determine the application of the
provisions with respect to any situation based on the facts known to it.
(j) Severability. If any provision or any application of any such
provision is determined to be invalid by a federal or state court having
jurisdiction over the issue, the validity of the remaining provisions shall not
be affected and other applications of such provision shall be affected only to
the extent necessary to comply with the determination of such court.
SECTION 16.2 Shares-in-Trust.
(a) Share Trust. Any shares of Equity Stock or Trust Securities
transferred to a Share Trust and designated Shares-in-Trust pursuant to Section
16.1(c) shall be held for the exclusive benefit of the Charitable Beneficiary.
The Corporation shall name a Charitable Beneficiary and Share Trustee of each
Share Trust within five (5) days after discovery of the existence thereof. Any
transfer to a Share Trust, and subsequent designation of shares of Equity Stock
or Trust Securities as Shares-in-Trust, pursuant to Section 16.1(c) shall be
effective as of the close of business on the business day prior to the date of
the Transfer or Non-Transfer Event that results in the transfer to the Share
Trust. Shares-in-Trust shall remain issued and outstanding shares of Equity
Stock of the Corporation and issued and outstanding Trust Securities, as the
case may be, and shall be entitled to the same rights and privileges on
identical terms and conditions as are all other issued and outstanding shares of
Equity Stock or Trust Securities of the same class and series. When transferred
to the Permitted Transferee in accordance with the provisions of Section 16.2(c)
hereof, such Shares-in-Trust shall cease to be designated as Shares-in-Trust.
(b) Dividend Rights. The Share Trustee, as record holder of
Shares-in-Trust, shall be entitled to receive all dividends and distributions,
as the case may be, as may be declared by the Board of Directors on such shares
of Equity Stock or shall be payable on the Trust Securities and shall hold such
dividends and distributions in trust for the benefit of the Charitable
Beneficiary. The Purported Record Transferee (or the Purported Beneficial
Transferee, if applicable) with respect to Shares-in-Trust shall repay to the
Share Trustee the amount of any dividends and distributions received by it that
(i) are attributable to any shares of Equity Stock or Trust Securities
designated as Shares-in-Trust and (ii) the record date of which was on or after
the date that such shares became Shares-in-Trust. The Corporation shall take all
measures that it determines reasonably necessary to recover the amount of any
such dividend and distribution paid to the Purported Record Transferee (or
Purported Beneficial Transferee, if applicable), including, if necessary,
withholding any portion of future dividends and distributions payable on shares
of Equity Stock or Trust Securities Beneficially Owned by the Person who, but
for the provisions of Section 16.1(c), would Beneficially Own the
Shares-in-Trust; and, as soon as reasonably practicable following the
Corporation's receipt or withholding thereof, shall pay over to the Share
Trustee for the benefit of the Charitable Beneficiary the dividends and
distributions so received or withheld, as the case may be.
(c) Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution of the assets of
(other than a dividend), the Corporation, each Share Trustee of Shares-in-Trust
shall be entitled to receive,
77
ratably with each other holder of shares of Equity Stock or Trust Securities, as
the case may be, of the same class or series, that portion of the assets of the
Corporation that is available for distribution to the holders of such class and
series of Equity Stock or Trust Securities. The Share Trustee shall distribute
to the Purported Record Transferee the amounts received upon such liquidation,
dissolution, or winding up, or distribution; provided, however, that the
Purported Record Transferee shall not be entitled to receive amounts pursuant to
this Section 16.2(c) in excess of, in the case of a purported Transfer in which
the Purported Record Transferee gave value for shares of Equity Stock or Trust
Securities and which Transfer resulted in the transfer of the shares or Trust
Securities to the Share Trust, the price per share or Trust Securities, if any,
such Purported Record Transferee paid for the shares of Equity Stock or Trust
Securities and, in the case of a Non-Transfer Event or Transfer in which the
Purported Record Transferee did not give value for such shares or Trust
Securities (e.g., if the shares were received through a gift or devise) and
which Non-Transfer Event or Transfer, as the case may be, resulted in the
transfer of shares or Trust Securities to the Share Trust, the price per share
or Trust Securities equal to the Market Price on the date of such Non-Transfer
Event or Transfer. Any remaining amount in such Share Trust shall be distributed
to the Charitable Beneficiary.
(d) Voting Rights. The Share Trustee shall be entitled to vote all
Shares-in-Trust. Any vote by a Purported Record Transferee as a holder of shares
of Equity Stock or Trust Securities prior to the discovery by the Corporation
that the shares of Equity Stock or Trust Securities are Shares-in-Trust shall,
subject to applicable law, be rescinded and shall be void ab initio with respect
to such Shares-in-Trust and the Purported Record Transferee shall be deemed to
have given, as of the close of business on the business day prior to the date of
the purported Transfer or Non-Transfer Event that results in the transfer to the
Share Trust of shares of Equity Stock or Trust Securities under Section 16.1(c)
hereof, an irrevocable proxy to the Share Trustee to vote the Shares-in-Trust in
the manner in which the Share Trustee, in its sole and absolute discretion,
desires.
(e) Designation of Permitted Transferee. The Share Trustee shall have the
exclusive and absolute right to designate a Permitted Transferee of any and all
Shares-in-Trust. In an orderly fashion so as not materially and adversely to
affect the Market Price of the Shares-in-Trust, the Share Trustee shall
designate any Person as Permitted Transferee; provided, however, that (i) the
Permitted Transferee so designated purchases for valuable consideration (whether
in a public or private sale), at a price as set forth in Section 16.2(g), the
Shares-in-Trust, and (ii) the Permitted Transferee so designated may acquire
such Shares-in-Trust without such acquisition resulting in a transfer to a Share
Trust and the redesignation of such shares of Equity Stock or Trust Securities
so acquired as Shares-in-Trust under Section 16.1(c). Upon the designation by
the Share Trustee of a Permitted Transferee in accordance with the provisions of
this Section 16.2(e), the Share Trustee of a Share Trust shall (w) cause to be
transferred to the Permitted Transferee that number of Shares-in-Trust acquired
by the Permitted Transferee, (x) cause to be recorded on the books of the
Corporation that the Permitted Transferee is the holder of record of such number
of shares of Equity Stock or amount of Trust Securities, (y) cause the
Shares-in-Trust to be cancelled, and (z) distribute to the Charitable
Beneficiary any and all amounts held with respect to the Shares-in-Trust after
making that payment to the Purported Record Transferee pursuant to Section
16.2(f).
78
(f) Compensation to Record Holder of Shares of Equity Stock or Trust
Securities that Become Shares-in-Trust. Any Purported Record Transferee shall be
entitled (following discovery of the Shares-in-Trust and subsequent designation
of the Permitted Transferee in accordance with Section 16.2(c)) to receive from
the Share Trustee upon the sale or other disposition of such Shares-in-Trust the
lesser of (i) in the case of (x) a purported Transfer in which the Purported
Record Transferee (or the Purported Beneficial Transferee, if applicable) gave
value for shares of Equity Stock or Trust Securities and which Transfer resulted
in the transfer of the shares to the Share Trust, the price per share, if any,
such Purported Record Transferee (or the Purported Beneficial Transferee, if
applicable) paid for the shares of Equity Stock or Trust Securities, or (z) a
Non-Transfer Event or Transfer in which the Purported Record Transferee (or the
Purported Beneficial Transferee, if applicable) did not give value for such
shares (e.g., if the shares were received through a gift or devise) and which
Non-Transfer Event or Transfer, as the case may be, resulted in the transfer of
shares to the Share Trust, the price per share or Trust Securities equal to the
Market Price on the date of such Non-Transfer Event or Transfer, and (ii) the
price per share received by the Share Trustee of the Share Trust from the sale
or other disposition of such Shares-in-Trust in accordance with Section 16.2(e)
or (g). Any amounts received by the Share Trustee in respect of such
Shares-in-Trust and in excess of such amounts to be paid the Purported Record
Transferee pursuant to this Section 16.2(f) shall be distributed to the
Charitable Beneficiary in accordance with the provisions of Section 16.2(e).
Each Charitable Beneficiary and Purported Record Transferee (and Purported
Beneficial Transferee, if different) waives any and all claims that each may
have against the Share Trustee and the Share Trust arising out of the
disposition of the Shares-in-Trust, except for claims arising out of the gross
negligence or willful misconduct of, or any failure to make payments in
accordance with this Section 16.2 by, such Share Trustee or the Corporation.
(g) Purchase Rights in Shares-in-Trust. Shares-in-Trust shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
created such Shares-in-Trust (or, in the case of devise, gift or Non-Transfer
Event, the Market Price at the time of such devise, gift or Non-Transfer Event),
and (ii) the Market Price on the date the Corporation, or its designee, accepts
such offer. The Corporation shall have the right to accept such offer for a
period of ninety (90) days after the later of (x) the date of the Non-Transfer
Event or purported Transfer which resulted in such Shares-in-Trust and (y) the
date the Corporation determines in good faith that a Transfer or Non-Transfer
Event resulting in Shares-in-Trust has occurred, if the Corporation does not
receive a notice of such Transfer or Non-Transfer Event pursuant to Section
16.1(e).
[Remainder of Page Intentionally Left Blank]
79
IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Declaration of Trust as of the day and year first above written.
Alan B. Horn,
not in his individual capacity but
solely as Administrative Trustee
By: /s/ Alan B. Horn
-------------------------------------
Name: Alan B. Horn
Title: Administrative Trustee
Stephen A. Hozie,
not in his individual capacity but
solely as Administrative Trustee
By: /s/ Stephen A. Hozie
-------------------------------------
Name: Stephen A. Hozie
Title: Administrative Trustee
Michael Strauss,
not in his individual capacity but
solely as Administrative Trustee
By: /s/ Michael Strauss
-------------------------------------
Name: Michael Strauss
Title: Administrative Trustee
American Home Mortgage Investment
Corp.,
as Initial Purchaser of Common
Securities and Debenture Issuer
By:
-------------------------------------
Name:
Title:
80
Wilmington Trust Company,
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
Wilmington Trust Company,
as Property Trustee
By:
-------------------------------------
Name:
Title:
81
ANNEX I
TERMS OF
9.75% CONVERTIBLE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $1,000.00 PER SECURITY)
AND
9.75% COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000.00 PER SECURITY)
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust
of AHM Capital Trust I, dated as of June 28, 2007 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities are set out below
(each capitalized term used but not defined herein has the meaning set forth in
the Declaration):
1. Designation and Number.
(a) Preferred Securities. 125,000 9.75% Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of
the Trust of One Hundred Twenty-Five Million Dollars ($125,000,000), and
with a liquidation amount with respect to the assets of the Trust of
$1,000.00 per security, are hereby designated for the purposes of
identification only as Preferred Securities. The certificates evidencing
the Preferred Securities shall be substantially in the form of Exhibit A-1
to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
(b) Common Securities. Up to 3,866 9.75% Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of
the Trust of Three Million Eight Hundred Sixty-six Thousand Dollars
($3,866,000) and a liquidation amount with respect to the assets of the
Trust of $1,000.00 per security, are hereby designated for the purposes of
identification only as Common Securities. The certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed (i) at a
rate per annum of 9.75% (the "Coupon Rate") of the liquidation amount of
$1,000.00 per Security (the "Liquidation Amount"), (ii) at the Coupon Rate
on any overdue installment of Interest (to the extent that payment of such
interest is enforceable under applicable law) and (iii) for any period of
time during which any installment of Interest is overdue, at the Coupon
Rate plus 2.00%, in every case, compounded quarterly, and each such rate
being the equivalent rate of interest payable on the Debentures held by
the Property Trustee. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds on hand legally
available therefor.
A-I-1
(b) Distributions on the Securities will be cumulative, will
accumulate from the date of their original issuance, and will be payable
quarterly in arrears on January 1, April 1, July 1 and October 1 of each
year, commencing on October 1, 2007 (each, a "Distribution Date"), except
as otherwise described below. Distributions will be computed on the basis
of a 360-day year consisting of twelve 30-day months.
(c) Distributions on the Securities (other than Distributions on a
redemption date, if any) will be payable to the Holders thereof as they
appear on the books and records of the Trust as of 5:00 p.m., New York
City time, on the fifteenth (15th) day of the month, whether or not a
Business Day, immediately preceding the month in which the relevant
Distribution Date occurs, which Distribution Dates correspond to the
interest payment dates on the Debentures. The relevant record dates for
the Common Securities shall be the same as the record dates for the
Preferred Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to
be payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day with the same force and
effect as if made on such date.
(d) As used in this Annex I, the term "Distribution," unless
otherwise stated, includes regular quarterly Distributions payable at the
Coupon Rate (or such other rate pursuant to paragraph 2(a) above) as well
as Distributions payable in accordance with Article VI of the Declaration
if and to the extent that the Debenture Issuer makes a payment of Interest
on the Debentures in respect of Liquidated Damages and/or Additional Sums.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall
be distributed Pro Rata (as defined herein) among the Holders.
3. Liquidation Distribution Upon Termination.
In the event of any termination of the Trust other than upon the
occurrence of events specified in Sections 8.1(a)(v), (vi), (viii) or 8(a)(ix)
of the Declaration, or if the Initial Purchaser of Common Securities otherwise
gives notice of its election to liquidate the Trust pursuant to Section
8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing to the Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the
A-I-2
Property Trustee not to be practicable, in which event such Holders will be
entitled to receive Pro Rata out of the assets of the Trust legally available
for distribution to Holders an amount in cash or immediately available funds
equal to the aggregate of the liquidation amount of $1,000.00 per Security plus
accumulated and unpaid Distributions thereon to the date of payment, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law (such amount being the "Liquidation Distribution"). If the Debentures are
distributed to the holders of the Preferred Securities, the Debenture Issuer
will use its reasonable efforts to cause the Debentures to be listed on the
market or exchange on which the Preferred Securities are then listed, if any.
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the liquidation of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis except
that if an Event of Default shall exist under the Indenture, the Preferred
Securities shall have a priority over the Common Securities.
On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing Securities not held by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of Debentures bearing
an interest rate identical to the distribution rate of those Preferred
Securities, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on those Preferred Securities until such
certificates are presented to the Debenture Issuer or its agent for transfer or
reissue.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, at
maturity or otherwise (regardless of whether at the option of the
Debenture Issuer in accordance with the provisions of paragraph 4(c)
below, pursuant to a Special Event, as described below, or pursuant to a
Change in Control, as defined in the Indenture), the proceeds from such
redemption shall be simultaneously applied by the Property Trustee
(subject to the Property Trustee having received written notice no later
than thirty (30) days prior to such redemption) to redeem a Like Amount of
the Securities, at the Redemption Price (as defined below), the Change in
Control Redemption Price (as defined below) or the Make-Whole Redemption
Price (as defined below), as applicable. If fewer than all of the
Debentures are redeemed on a redemption date, then the Property Trustee
shall allocate the proceeds of the redemption on a Pro Rata basis among
the Preferred Securities and
A-I-3
the Common Securities unless an Event of Default shall have occurred, in
which case no proceeds shall be allocated to the Common Securities until
the Preferred Securities are paid in full.
(b) (i) The "Redemption Price," with respect to a redemption of
Securities, shall mean an amount equal to 100% of the Liquidation Amount
of Securities to be redeemed, plus accrued and unpaid Distributions on the
Securities, if any, to the date of such redemption.
(ii) The "Make-Whole Redemption Price" shall mean the sum of
(A) the Redemption Price and (B) the Make-Whole Payment Price (as
defined in the Indenture).
(iii) The "Change in Control Redemption Price" shall mean the
greater of: (x) the Redemption Price plus the Change in Control
Redemption Premium, or (y) an amount equal to the number of shares
of Common Stock that would be issued if such Debentures were
converted on the Change in Control Effective Date at the then
prevailing Conversion Rate multiplied by the Stock Price (as defined
in the Indenture) plus the Change in Control Redemption Premium.
(iv) If fewer than all the outstanding Securities are to be so
redeemed, the Securities to be redeemed will be determined as
described in paragraph 5(a)(ii) below.
(c) The Debenture Issuer may redeem the Debentures, subject to
conditions set forth in the Indenture, prior to maturity, in whole or in
part, on one or more occasions. Subject to the provisions of paragraph
4(d) and 4(e) below, the Debentures shall not be redeemable at the option
of the Debenture Issuer prior to July 1, 2010. The Debenture Issuer shall
have the right to redeem the Debentures, in whole or in part, on one or
more occasions at any time on or after July 1, 2010, at the Make-Whole
Redemption Price, if the average Closing Price (as defined in the
Indenture) per share of Common Stock for the ten (10) consecutive Trading
Days (as defined in the Indenture) ending on the Trading Day prior to the
mailing of the notice of redemption exceeds 130% of the then prevailing
Conversion Price (as defined in the Indenture). On and after July 1, 2012,
the Debenture Issuer shall have the right to redeem the Debentures, in
whole or in part, at the Redemption Price.
(d) If at any time an Investment Company Event or a Tax Event (each
as defined below, and each a "Special Event") occurs, the Debenture Issuer
shall have the right (subject to the conditions set forth in the
Indenture) at any time to redeem, at the Redemption Price, the Debentures
in whole, but not in part, following the occurrence of such Special Event.
"Investment Company Event" means the Initial Purchaser of Common
Securities and the Trust shall have received an opinion of independent
securities counsel experienced in such matters to the effect that, as a result
of (i) any amendment to, or change (including any announced prospective change)
in, any laws or regulations of the United States or any rules,
A-I-4
guidelines or policies of any applicable regulatory agency or authority; or (ii)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date the Preferred
Securities are first issued, the Trust is, or within ninety (90) days of the
date of the opinion will be, considered an investment company that is required
to be registered under the Investment Company Act.
"Tax Event" means the receipt by the Debenture Issuer of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of (a) any amendment to or change (including any announced prospective change)
in the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein or (b) any judicial decision
or any official administrative pronouncement or regulatory procedure, including
any notice or announcement of intent to adopt any such pronouncement (including
any private letter ruling, technical advice memorandum or field service advice)
or procedure (an "Administrative Action"), regardless of whether such judicial
decision or Administrative Action is issued to or in connection with a
proceeding involving the Debenture Issuer or the Trust and whether or not
subject to review or appeal, which amendment, change, judicial decision or
Administrative Action is enacted, promulgated or announced, in each case, on or
after the date of issuance of the Preferred Securities, there is more than an
insubstantial risk that (i) the Trust is, or will be within ninety (90) days of
the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Debentures, (ii) interest payable
by the Debenture Issuer on the Debentures is not, or within ninety (90) days of
the date of such opinion, will not be, deductible by the Debenture Issuer, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within ninety (90) days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
(e) If at any time there occurs a Change in Control, the Debenture
Issuer shall have the right (subject to the conditions set forth in the
Indenture) at any time to redeem, at the Redemption Price plus, under
certain circumstances described in the Indenture, a Change in Control
Redemption Premium, the Debentures in whole, but not in part, following
the occurrence of such Change in Control.
(f) Upon any redemption of Debentures upon the occurrence of a
Special Event or a Change in Control and in compliance with the Indenture,
the Trust will, simultaneous with such redemption of Debentures, cause all
of the Securities to be redeemed by the Trust at the price equivalent to
that paid to redeem the Debentures.
(g) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid
on all Securities for all quarterly distribution periods terminating on or
before the date of redemption.
(h) In connection with any redemption of Securities, the Trust may
arrange for the purchase and conversion of any Securities by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Property Trustee in trust for the Holders, on
or before the redemption date, an amount not less than the applicable
Redemption Price, the Change in Control Redemption Price or
A-I-5
Make-Whole Redemption Price, as the case may be, of such Securities.
Notwithstanding anything to the contrary contained in this paragraph 4,
the obligation of the Trust to pay the redemption price of such Securities
shall be deemed to be satisfied and discharged only to the extent such
amount is so paid by such purchasers. If such an agreement is entered
into, a copy of which shall be filed with the Property Trustee prior to
the redemption date, any Securities not duly surrendered for conversion by
the Holders thereof, may, at the option of the Trust, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such
Holders and (notwithstanding anything to the contrary contained in
paragraph 6 of this Annex I) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
redemption date (and the right to convert any such Securities shall be
deemed to have been extended through such time), subject to payment of the
above amount as aforesaid. At the written direction of the Trust, the
Property Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by the Trust for the
redemption of Securities. Without the Property Trustee's prior written
consent, no arrangement between the Trust and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the
Property Trustee as set forth in the Declaration, and the Debenture Issuer
and the Trust agree to indemnify the Property Trustee from, and hold it
harmless against, any and all loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of
any Securities between the Trust and such purchasers, including the costs
and expenses incurred by the Property Trustee in the defense of any claim
or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations
under the Declaration. Nothing in the preceding sentence shall be deemed
to limit the rights, privileges, immunities and protections afforded to
the Property Trustee in the Declaration. Nothing in this paragraph 4(h)
shall affect the right of the Holders to receive the full Redemption
Price, the Change in Control Redemption Price or Make-Whole Redemption
Price, as the case may be, on the redemption date.
5. Procedures Related to Redemptions or Distributions of Securities.
(a) The procedure with respect to redemptions or distributions of
Securities shall be as follows:
(i) (A) Notice of any redemption due to a Change in Control
will be given by the Trust as promptly as practicable following the
Date the Debenture Issuer publicly announces a Change in Control but
in no event less than twenty (20) Business Days Prior to the
anticipated effective date of such Change in Control and (B) notice
of any redemption (other than due to a Change in Control) of, or
notice of distribution of Debentures in exchange for, the Securities
will be given by the Trust by mail to each Holder to be redeemed or
exchanged not fewer than thirty (30) nor more than sixty (60) days
before the date fixed for redemption or exchange thereof or which,
in the case of a redemption under this paragraph 5(a)(i)(B), will be
the date fixed for redemption of the Debentures (any such notice
provided pursuant to clause (A) or (B) of this paragraph 5(a)(i)
shall be referred to as (a "Redemption/Distribution Notice"). For
purposes of the calculation of the
A-I-6
date of redemption or exchange and the dates on which notices are
given pursuant to this paragraph 5(a)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to Holders. Each
Redemption/Distribution Notice shall be addressed to the Holders at
the address of each such Holder appearing in the books and records
of the Trust. The notice if mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice. In any case, failure to give
such notice or any defect in the Redemption/Distribution Notice to
the Holder of any Security designated for redemption or exchange as
a whole or in part shall not affect the validity of the redemption
or exchange proceedings with respect to any other Security.
(ii) Subject to paragraph 4(a), in the event that fewer than
all the outstanding Securities are to be redeemed, the particular
Securities to be redeemed shall be selected on a Pro Rata basis
(based upon Liquidation Amounts) not more than sixty (60) days prior
to the date fixed for redemption from the outstanding Securities not
previously called for redemption, provided, however, that with
respect to Holders that would be required to hold less than five (5)
but more than zero Securities as a result of such Pro Rata
redemption, the Trust shall redeem Securities of each such Holder so
that after such redemption such Holder either shall hold five (5)
Securities or such Holder shall no longer hold any Securities, and
shall use such method (including, without limitation, by lot) as the
Trust shall deem fair and appropriate, provided further, that any
such proration may be made on the basis of the aggregate Liquidation
Amount of Securities held by each Holder thereof and may be made by
making such adjustments as the Trust deems fair and appropriate in
order that only Securities in denominations of $1,000.00 or integral
multiples thereof shall be redeemed. In respect of Preferred
Securities registered in the name of and held of record by the
Clearing Agency or its nominee (or any successor Clearing Agency or
its nominee) or any nominee, the distribution of the proceeds of
such redemption will be made to the Clearing Agency and disbursed by
such Clearing Agency in accordance with the procedures applied by
such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/ Distribution Notice (which notice will be irrevocable),
then (A) with respect to Preferred Securities issued in book-entry
form if (i) following the occurrence of a Special Event, by 1:00
p.m., New York City time, on the redemption date or at such earlier
time as the Trust determines, or (ii) following the occurrence of a
Change in Control, by 1:00 p.m., New York City time on the fifth
(5th) Business Day following the Change in Control Effective Date or
such earlier time as the Trust determines, provided in either case
that the Debenture Issuer has paid the Debenture Trustee a
sufficient amount of cash in connection with the related redemption
or maturity of the Debentures by 10:00 a.m., New York City time, on
the maturity date or the date of redemption, as the case requires,
the Property Trustee will deposit irrevocably with the Clearing
Agency or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the Redemption Price, the Change in Control
Redemption Price or the Make-Whole Redemption
A-I-7
Price, as the case may be, with respect to such Preferred Securities
and will give the Clearing Agency irrevocable instructions and
authority to pay the Redemption Price, the Change in Control
Redemption Price or the Make-Whole Redemption Price, as the case may
be, to the relevant Clearing Agency Participants and (B) with
respect to Preferred Securities issued in certificated form and
Common Securities, the Property Trustee will irrevocably deposit
with the Paying Agent funds sufficient to pay the Redemption Price,
the Change in Control Redemption Price or the Make-Whole Redemption
Price, as the case may be, and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price,
the Change in Control Redemption Price or the Make-Whole Redemption
Price, as the case may be, to Holders upon surrender of their
certificates evidencing the Preferred Securities or Common
Securities, as the case may be. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the
redemption date, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of Holders so
called for redemption will cease, except the right of the Holders of
such Securities to receive the Redemption Price, the Change in
Control Redemption Price or the Make-Whole Redemption Price, as the
case may be, but without interest on such Redemption Price, the
Change in Control Redemption Price or the Make-Whole Redemption
Price, as the case may be, and such Securities shall cease to be
outstanding.
(iv) Notwithstanding the foregoing, payment of accumulated and
unpaid Distributions on the Redemption Date of the Securities will
be subject to the rights of Holders on the close of business on the
relevant record date in respect of a Distribution Date occurring on
or prior to such Redemption Date.
The Trust shall not be required to: (i) issue, register the transfer of or
exchange any Securities during a period beginning at the opening of business
fifteen (15) days before the day of mailing of a notice of redemption and ending
at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Securities selected for redemption in whole or in
part except, in the case of any Securities being redeemed in part, any portion
thereof not to be redeemed; for the avoidance of doubt, none of the transfer and
exchange provisions shall affect the Debenture Issuer's obligation to comply
with the provisions of Section 17.01 of the Indenture and paragraph 6 below. If
any date fixed for redemption of Securities is not a Business Day, then payment
of the Redemption Price, the Change in Control Redemption Price or the
Make-Whole Redemption Price, as the case may be, payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such next
succeeding Business Day falls in the next calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of the
Redemption Price, the Change in Control Redemption Price or the Make-Whole
Redemption Price, as the case may be, in respect of any Securities is improperly
withheld or refused and not paid either by the Trust or by the Debenture Issuer
as guarantor pursuant to the Guarantee Agreement, Distributions on such
Securities will continue to accumulate at the rate prescribed therefor in the
Security from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of
A-I-8
calculating the Redemption Price, the Change in Control Redemption Price or the
Make-Whole Redemption Price, as the case may be.
(v) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust at the expense of the
Initial Purchaser of Common Securities to (A) in respect of the
Preferred Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if Certificated Preferred Security Certificates
have been issued, to the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the
Initial Purchaser of Common Securities or any of its subsidiaries
may at any time and from time to time purchase outstanding Preferred
Securities by tender, in the open market or by private agreement.
6. Conversion Rights.
The Holders of Preferred Securities shall have the right at any time on or
after the occurrence of the events described in Section 17.01 of the Indenture
and prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding the date of repayment of such Preferred Securities, whether at stated
maturity or upon redemption, at their option to cause the Conversion Agent to
convert Preferred Securities, on behalf of the converting Holders, into shares
of Common Stock, in the manner described herein on and subject to the following
terms and conditions:
(a) The Preferred Securities will be exchangeable for Debentures
which will be convertible at the office of the Conversion Agent into fully
paid and nonassessable shares of Common Stock pursuant to the Holder's
direction to the Conversion Agent to exchange such Preferred Securities
for a portion of the Debentures theretofore held by the Trust on the basis
of one Preferred Security per $1,000.00 principal amount of Debentures,
and immediately convert such amount of Debentures into fully paid and
nonassessable shares of Common Stock at an initial conversion rate of
39.1016 shares of Common Stock for each $1,000.00 principal amount of
Debentures (equal to an initial Conversion Price of $25.57 per share of
Common Stock), subject to adjustment as described in the Indenture (the
"Conversion Rate"). In addition, upon the occurrence of a Change in
Control, holders converting Debentures in connection with such Change in
Control within the meaning of the Indenture (including Holders directing
the Conversion Agent) shall, under certain circumstances, be entitled to
receive a make whole premium in the form of an increase in the Conversion
Rate, as and to the extent set forth in the Indenture.
On each Conversion Rate Reset Date, the Conversion Rate will be
reset to the lower of (x) the Conversion Rate then in effect, and (y) a
Conversion Rate determined by dividing $1,000 by an amount equal to 120%
of the Average Closing Price (as defined in the Indenture).
Notwithstanding the foregoing, if the application of the foregoing were to
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result in the Conversion Rate being reset to a Conversion Rate that would
be greater than the Maximum Conversion Rate, then the Conversion Rate will
instead be reset to the Maximum Conversion Rate. The Maximum Conversion
Rate shall be subject to adjustment on each occasion on which the
Conversion Rate shall be adjusted (other than on account of adjustments to
the Conversion Rate resulting from the application of the provisions of
this paragraph) by multiplying the then applicable Maximum Conversion Rate
by a fraction, the numerator of which is the Conversion Rate as so
adjusted and the denominator of which is the Conversion Rate in effect
immediately prior to such adjustment; provided that the Maximum Conversion
Rate as so adjusted shall in no event be greater than 65.1693 shares per
$1,000.00 principal amount of Securities, subject to adjustment on account
of the events specified in Section 17.03(a) of the Indenture. The
Conversion Rate shall be adjusted in certain instances as provided in
paragraphs (a), (b), (c), (d) or (e) of Section 17.03 of the Indenture.
Notwithstanding the forgoing, in no event will the Conversion Rate or
Maximum Conversion Rate be adjusted as described in Section 17.01(a) or
17.03(d) of the Indenture to a Conversion Rate that is greater than the
Maximum Cash Adjusted Conversion Rate.
Upon conversion of Debentures following the Holder's direction to
the Conversion Agent, the Debenture Issuer shall, in accordance with the
provisions of the Indenture, have the right to deliver, in lieu of Common
Stock, cash in lieu of all or a portion of such Common Stock. The
Debenture Issuer shall inform the Property Trustee of its election to pay
cash for all or a portion of the shares in lieu of delivery of the shares
of Common Stock otherwise issuable upon conversion (and, if applicable,
the percentage of each share of Common Stock that will be paid in cash in
lieu of shares of Common Stock) and the Property Trustee shall upon
receipt of such notice notify Holders who have surrendered their Preferred
Securities for conversion no later than two (2) Business Days after the
Conversion Date.
If the Debenture Issuer shall have elected, unilaterally and
irrevocably, to settle its obligation to deliver shares of Common Stock
with respect to Debentures converted following such election, in cash and,
if applicable, shares of common stock ("Net Share Settlement Election"),
then upon conversion of Debentures following the Holder's direction to the
Conversion Agent, the Debenture Issuer shall deliver to the holder
surrendering such Debentures for conversion an amount in cash equal to the
lesser of (i) the principal amount of the Debentures so converted and (ii)
the Conversion Value, determined in the manner set forth in the Indenture.
If the Conversion Value exceeds the principal amount of the Debentures on
the conversion date, the Debenture Issuer will also deliver, at its
election, cash or Common Stock or a combination of cash and Common Stock
for the Conversion Value in excess of the principal amount of the
Debentures so converted. On any day prior to the first Trading Day of the
applicable Conversion Reference Period, the Debenture Issuer may specify
the Cash Percentage (as defined in the Indenture) and the Debenture Issuer
shall notify the Property Trustee who shall forthwith and immediately
notify the Holder of such Cash Percentage.
(b) In order to convert Preferred Securities into Common Stock the
Holder shall submit to the Conversion Agent at the office referred to
above a request to convert Preferred Securities on behalf of such Holder
substantially in the form attached to Exhibit
A-I-10
A-1 to the Declaration (the "Conversion Request"), together, if the
Preferred Securities are in certificated form, with such certificates. The
Holder must furnish appropriate endorsements or transfer documents, if
required by the Conversion Agent, and pay any transfer or similar tax, if
required. The Trust shall not cause the conversion of any Debentures
except pursuant to such a Conversion Request. The Conversion Request shall
(i) set forth the number of Preferred Securities to be converted and the
name or names, if other than the Holder, in which the shares of Common
Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Preferred Securities for a portion of the Debentures held by
the Trust having a principal amount equal to the Liquidation Amount of the
Preferred Securities to be converted and (b) to immediately convert such
Debentures on behalf of such Holder, into Common Stock at the conversion
rate applicable to the Debentures at such time. The Conversion Agent shall
notify the Property Trustee of the Holder's election to exchange Preferred
Securities for a portion of the Debentures held by the Trust and the
Property Trustee shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this paragraph 6. The Conversion Agent shall
thereupon notify the Initial Purchaser of Common Securities of the
Holder's election to convert such Debentures into shares of Common Stock.
(c) Except as described herein, no distribution will be payable on
Preferred Securities surrendered for conversion with respect to any
Distribution Date subsequent to the date of conversion and neither the
Trust nor the Debenture Issuer will make, or be required to make, any
payment, allowance or adjustment for accumulated and unpaid Distributions,
whether or not in arrears, on Preferred Securities surrendered for
conversion. If any Preferred Securities are surrendered for conversion
between the period from 5:00 p.m., New York City time, on any record date
through and including the related Distribution Date, the Preferred
Securities surrendered for conversion must be accompanied by payment from
the Holder in next day funds of an amount equal to the Distribution which
the registered holder on such record date is to receive, and such
registered holder shall be entitled to receive the Distribution payable on
the subsequent Distribution Date on the portion of Preferred to be
converted, notwithstanding the conversion thereof prior to such
Distribution Date. The previous sentence shall not apply in the case of
Preferred Securities called for redemption on a redemption date between a
record date and a related Distribution Date as described in the next
sentence. If notice of redemption of Preferred Securities is mailed or
otherwise given to Holders, then such converting Holder shall be entitled
to receive either (i) if the date of such conversion falls after a record
date and on or prior to the next succeeding Distribution Date, all accrued
and unpaid Distributions on such Securities to such Distribution Date, or
(ii) if the date of such conversion does not fall on a date described in
clause (i) above, all accrued and unpaid Distributions on such Securities
to the most recent Distribution Date prior to the date of such conversion
(even though no Distributions were paid on such date), which Distributions
shall, in either such case, be paid to such converting Holder unless
another Holder was the record owner of such Securities as of 5:00 p.m.,
New York City time on the record date for which such Distribution payment
is made, in which case such Distribution payment shall be paid to such
other Holder. Except as otherwise set forth above in this paragraph, in
the case of any Security which is converted, Distributions which are
payable after the date of conversion of such Preferred Security shall not
be
A-I-11
payable, and the Trust shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid
Distributions on the Securities being converted, which shall be deemed to
be paid in full through delivery of the Common Stock (together with the
cash payment, if any, in lieu of fractional shares) or cash-in-lieu of
delivering Common Stock, or any combination elected by the Debenture
Issuer. If any Preferred Security called for redemption is converted, any
money deposited with the Property Trustee or with any paying agent or so
segregated and held in trust for the redemption of such Preferred Security
shall (subject to any right of the Holder) be paid to the Trust upon a
written request or, if then held by the Trust, shall be discharged from
such trust.
In addition to the provisions of the foregoing paragraph, in the
event that the Debenture Issuer shall have called the Debentures for
redemption and the Trust shall have converted some or all of its
Debentures due to a Holder of Preferred Securities having exercised its
right under the Indenture to exchange such Preferred Securities for
Debentures, in addition to the amounts owing upon conversion pursuant to
the provisions of this paragraph and Article XVII of the Indenture, the
Holder of such Preferred Securities shall also be entitled to receive, on
the date on which such amounts are deliverable, a cash amount equal to the
Make-Whole Payment Price or the Change in Control Redemption Premium, as
the case may be, if any such Make-Whole Payment Price or Change in Control
Redemption Premium shall then be owing in connection with the Debentures.
Each conversion shall be deemed to have been effected immediately
prior to 5:00 p.m., New York City time, on the Business Day on which the
Conversion Request and any other required deliverables were received (the
"Conversion Date") by the Conversion Agent from the Holder. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
Common Stock as of the Conversion Date. As promptly as practicable on or
after the Conversion Date, the Debenture Issuer shall issue and deliver at
the office of the Conversion Agent, unless otherwise directed by the
Holder in the Conversion Request, a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any
share to the Person or Persons entitled to receive the same. The
Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.
(d) Subject to any right of the Holder, the fair market value of the
fixed number of shares of Common Stock into which the Preferred Securities
are convertible (together with the cash payment, if any, in lieu of
fractional shares) shall be treated as issued, to the extent thereof, (i)
first, in exchange for accrued and unpaid Distributions on such Preferred
Securities at the time of such conversion, and (ii) second, the balance,
if any, of such fair market value of such Common Stock (and any cash
payment) shall be treated as issued in exchange for the liquidation amount
of the portion of Preferred Securities so converted.
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(e) Subject to the next succeeding sentence, no fractional shares of
Common Stock shall be issued as a result of conversion, but in lieu
thereof, the Debenture Issuer shall pay to the Conversion Agent a cash
adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Preferred Securities or
Debentures, as the case may be, were duly surrendered to the Conversion
Agent for conversion, or, if such day is not a Trading Day, on the next
Trading Day, and the Conversion Agent in turn shall make such payment, if
any, to the Holder of the Debentures so converted. In the event that the
Debenture Issuer shall have made a Net Share Settlement Election, a Holder
otherwise entitled to a fractional share shall receive cash equal to the
applicable portion of the arithmetic average of the volume weighted
average price of the Common Stock for each of the five (5) consecutive
Trading Days of the Conversion Reference Period.
(f) In the event of the conversion of any Preferred Security in part
only, a new Preferred Security or Preferred Securities for the unconverted
portion thereof shall be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 7.10 of the Declaration.
(g) In effecting the conversion transactions described in this
paragraph 6, the Conversion Agent shall be acting as agent of the Holders
of Preferred Securities (in the exchange of Preferred Securities for
Debentures) and as agent of the Debenture holders (in the conversion of
Debentures into Common Stock), as the case may be, directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized
(i) to exchange Preferred Securities for Debentures held by the Trust from
time to time in connection with the conversion of such Preferred
Securities in accordance with this paragraph 6 and the applicable
provisions of the Indenture and (ii) to convert all or a portion of the
Debentures into Common Stock and thereupon to deliver such shares of
Common Stock in accordance with the provisions of this paragraph 6 and the
applicable provisions of the Indenture and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal amount.
(h) Any certificates representing shares of Common Stock issuable
upon exchange of the Preferred Securities for Debentures and conversion of
such Debentures shall bear any legend required by Section 2.06 of the
Indenture.
(i) The Debenture Issuer shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for
issuance upon the conversion of the Debentures, free from any preemptive
or other similar rights, such number of shares of Common Stock as shall
from time to time be issuable upon the conversion of all the Debentures
then outstanding. Notwithstanding the foregoing, the Debenture Issuer
shall be entitled to deliver upon conversion of Debentures, shares of
Common Stock reacquired and held in the treasury of the Initial Purchaser
of Common Securities (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any
shares of Common Stock issued upon conversion of the Debentures shall be
duly authorized, validly issued and fully paid and nonassessable. The
Property Trustee shall deliver the shares of Common Stock received upon
conversion of the Debentures to the
A-I-13
converting Holder free and clear of all liens, charges, security interests
and encumbrances, except for United States withholding taxes and back-up
withholding taxes.
7. Purchase Right Following Change In Control or Termination of Trading.
(a) If a Change in Control or Termination of Trading occurs, each
holder of a Preferred Security will have the right to exchange any or all
of such Holder's Preferred Securities for Debentures of a Like Amount and
to simultaneously require the Debenture Issuer to repurchase such
Debentures on the Repurchase Date (as defined in the Indenture) at a
repurchase price in cash equal to 100% of the principal amount of the
Debentures that have been exchanged for such Holder's Preferred
Securities, plus accrued and unpaid interest on such Debentures to, but
excluding, the Repurchase Date.
(b) As promptly as practicable following either (i) the date the
Debenture Issuer publicly announces a Change in Control or (ii) the date
on which a Termination of Trading occurs, but, in the case of a Change in
Control, not less than twenty (20) Business Days prior to the anticipated
effective date of such Change in Control, the Debenture Issuer must give
notice to each Holder of a Preferred Security and the Property Trustee of
the transaction that constitutes the Change in Control or Termination of
Trading and of the resulting repurchase right, which notice must specify
the Repurchase Date. To exercise the repurchase right, a Holder must
deliver written notice to the Debenture Issuer, the Trust and the Property
Trustee of the Holder's exercise of its repurchase right no later than the
second (2nd) Business Day prior to the Repurchase Date. Pursuant to the
Holder's notice to the Property Trustee, the Holder will direct the
Property Trustee, in its capacity as exchange agent (the "Exchange Agent")
to exchange such Preferred Securities for a portion of the Debentures
theretofore held by the Trust on the basis of one Preferred Security per
$1,000.00 principal amount of Debentures, and immediately exercise the
right in respect of such Debentures to require the Debenture issuer to
repurchase such Debentures on the Repurchase Date for cash at a purchase
price of $1,000.00 plus accrued and unpaid interest to the Repurchase Date
for each $1,000.00 principal amount of Debentures so tendered for
repurchase.
(c) In order to exercise the right to require the Debenture Issuer
to repurchase the Holder's Debentures following the exchange of Preferred
Securities for Debentures, the Holder shall submit to the Exchange Agent
at the office referred to above a request to repurchase Preferred
Securities on behalf of such Holder substantially in the form attached to
Exhibit A-1 to the Declaration (the "Notice of Repurchase Election"),
together, if the Preferred Securities are in certificated form, with such
certificates. The Holder must furnish appropriate endorsements or transfer
documents, if required by the Exchange Agent, and pay any transfer or
similar tax, if required. The Trust shall not cause the repurchase of any
Debentures except pursuant to such a Notice of Repurchase Election. The
Notice of Repurchase Election shall (i) set forth the number of Preferred
Securities to be repurchased and (ii) direct the Exchange Agent (a) to
exchange such Preferred Securities for a portion of the Debentures held by
the Trust having a principal amount equal to the Liquidation Amount of the
Preferred Securities to be repurchased and (b) to immediately exercise the
repurchase right with respect to such Debentures on
A-I-14
behalf of such Holder. The Exchange Agent (if other than the Property
Trustee) shall notify the Property Trustee of the Holder's election to
exchange Preferred Securities for a portion of the Debentures held by the
Trust and the Property Trustee shall, upon receipt of such notice, deliver
to the Exchange Agent the appropriate principal amount of Debentures for
exchange in accordance with this paragraph 7. The Exchange Agent shall
thereupon notify the Debenture Issuer of the Holder's election to require
the Debenture Issuer to repurchase such Debentures in accordance with the
provisions of the Indenture.
(d) In the event of the exercise of the repurchase right of any
Preferred Security in part only, a new Preferred Security or Preferred
Securities for the portion thereof in respect of which the repurchase
right shall not have been exercised shall be issued in the name of the
Holder thereof upon the cancellation thereof in accordance with Section
7.10 of the Declaration.
(e) In effecting the repurchase transactions described in this
Paragraph 7, the Exchange Agent shall be acting as agent of the Holders of
Preferred Securities (in the exchange of Preferred Securities for
Debentures) and as agent of the Debenture holders (in the exercise of the
repurchase right with respect to the Debentures), as the case may be,
directing it to effect such repurchase transactions. The Exchange Agent is
hereby authorized (i) to exchange Preferred Securities for Debentures held
by the Trust from time to time in connection with the exercise of the
repurchase right with respect to such Preferred Securities in accordance
with this paragraph 7 and the applicable provisions of the Indenture and
(ii) to exercise the repurchase right with respect to all or a portion of
the Debentures and thereupon to deliver cash in accordance with the
provisions of this paragraph 7 and the applicable provisions of the
Indenture and to deliver to the Trust a new Debenture or Debentures for
any principal amount of Debentures in respect of which the repurchase
right shall not have been exercised.
(f) The Debenture Issuer will comply with the requirements of the
Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
redemption of the Preferred Securities or the repurchase of the Debentures
as a result of a Change in Control or a Termination of Trading.
8. Voting Rights-Preferred Securities.
(a) Except as provided under paragraphs 8(b), 9(b) and 10 and as
otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) So long as the Property Trustee holds any Debentures, the
Trustees may not, without obtaining the prior consent of the holders of a
majority in liquidation amount of all outstanding Preferred Securities:
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or power
conferred on the Debenture Trustee with respect to the Debentures; (ii)
revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities, except by subsequent vote of such
Holders; (iii) waive any past default that is
A-I-15
waivable under Section 5.07 of the Indenture; (iv) exercise any right to
rescind or annul a declaration accelerating the maturity of the principal
of the Debentures; or (v) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall
be required; provided, where a consent under the Indenture would require
the consent of Holders of more than a majority of the aggregate principal
amount of Debentures affected thereby, only the Holders of the percentage
of that aggregate stated liquidation amount of the Preferred Securities
which is at least equal to the percentage required under the Indenture may
direct the Property Trustee to give such consent; provided further, that
if an event of default under the Indenture has occurred and is continuing,
then holders of 25% of the aggregate liquidation amount of the Preferred
Securities may direct the Property Trustee to declare the principal of and
interest or other required payments on the Debentures due and payable.
In addition to obtaining the approvals of the Holders of the Preferred
Securities, the Property Trustee shall be under no obligation to take any of the
foregoing actions (except with respect to directing the time, method and place
of conducting a proceeding for a remedy) unless the Property Trustee has
obtained advice of Cadwalader, Wickersham & Taft LLP or an Opinion of Counsel
experienced in such matters to the effect that the Trust will not fail to be
classified as a grantor trust for federal income tax purposes after taking the
action into account, each Holder will be treated as owning an undivided
beneficial interest in the Debentures and the Debentures will be treated as
indebtedness. The Property Trustee shall notify each Holder of Preferred
Securities of any written notice of default it receives with respect to the
Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Debenture Issuer or any Affiliate of the
Debenture Issuer shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
A-I-16
9. Voting Rights-Common Securities.
(a) Except as provided otherwise under paragraphs 9(b), 9(c) and 10
or as otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Subject to the conditions set forth in Section 5.7 of the
Declaration, unless an Event of Default shall have occurred and be
continuing, any Trustee may be appointed or removed without cause at any
time by vote of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of Holders of the Common
Securities. If an Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed only by the
Holders of a Majority in liquidation amount of the Preferred Securities
voting as a class. In no event will the holders of the Preferred
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Initial Purchaser of Common Securities as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment
by the successor trustee in accordance with the provisions of the
Declaration.
(c) Unless an Event of Default shall have occurred and be continuing
and so long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or executing
any trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section
5.07 of the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the
Debentures or (iv) consent to any amendment, modification or termination
of the Indenture or the Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of a
Majority in liquidation amount of all outstanding Common Securities;
provided, however, that where a consent under the Indenture would require
the consent of holders of more than a majority of the aggregate principal
amount of Debentures affected thereby, only the holders of the percentage
of that aggregate stated liquidation amount of the Common Securities which
is at least equal to the percentage required under the Indenture may
direct the Property Trustee to give such consent. The Trustees shall not
revoke any action previously authorized or approved by a vote of the
Holders of the Common Securities except by subsequent vote of such
Holders. The Property Trustee shall notify each Holder of Common
Securities of any written notice of default it receives with respect to
the Debentures. In addition to obtaining the foregoing approvals of such
Holders of the Common Securities prior to taking any of the foregoing
actions (except with respect to directing the time, method and place of
conducting a proceeding for a remedy), the Property Trustee shall obtain,
at the expense of the Initial Purchaser of Common Securities, advice of
Cadwalader, Wickersham & Taft LLP or an opinion of counsel experienced in
such matters to the effect that the Trust will continue to be classified
as a grantor trust for United States federal income tax purposes on
account of such action, each holder will be treated as owning an undivided
beneficial interest in the Debentures and the Debentures will be treated
as indebtedness.
A-I-17
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose, at
a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
10. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder according to
the aggregate liquidation amount of the Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default under the Indenture has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Preferred Securities Pro Rata
according to the aggregate liquidation amount of Preferred Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and, only after satisfaction of all amounts
owed to the Holders of the Preferred Securities, to each Holder of Common
Securities Pro Rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
11. Ranking.
The Trust will pay all Distributions, any redemption price, and any
Liquidation Distribution to Holders of the Preferred Securities and Common
Securities Pro Rata based on the liquidation amount of the Preferred Securities
and Common Securities held. However, if on any Distribution Date or redemption
date, or at the time of a Liquidation Distribution, the Debenture Issuer is in
default under the Indenture, then the Trust will only pay any Distribution,
redemption price, or Liquidation Distribution on the Common Securities after
making payment in full and in cash of all accumulated and unpaid distributions
to Holders of the outstanding Preferred Securities for all distribution periods
terminating on or prior thereto, and in the case of payment of any redemption
price or a Liquidation Distribution, the full amount of the applicable
redemption price or Liquidation Distribution to holders of the outstanding
Preferred Securities then called for redemption or liquidation.
In the case of any Event of Default, the holder of all of the Common
Securities, will be deemed to have waived any right to act with respect to the
Event of Default until the effect of the Event of Default has been cured or
waived. Until any Event of Default has been cured or waived,
A-I-18
the Property Trustee will act solely on behalf of the Holders of the Preferred
Securities and not on behalf of the Holder of the Common Securities, and only
the holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Securities Guarantee,
including the subordination provisions therein and to the provisions of the
Indenture.
13. Other Rights of Holders of Preferred Securities.
If an Event of Default under the Indenture has occurred and is continuing,
then Holders of 25% of the aggregate liquidation amount of the Preferred
Securities may direct the Property Trustee to declare the principal of and
interest or other required payments on the Debentures due and payable.
If the Property Trustee shall have failed to take a Legal Action under
Section 3.8(e) of the Declaration, after any Holder of Preferred Securities
shall have made a written request to the Property Trustee and not withdrawn such
request to enforce such rights, such Holder of the Preferred Securities may, to
the fullest extent permitted by law, take such Legal Action to enforce the
rights of the Property Trustee under the Debentures; provided, however, that if
an Event of Default has occurred and is continuing, then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or Interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such Holder (a "Direct Action") on or after the respective due date specified in
the Debentures. Upon the occurrence of an Event of Default, the rights of the
Holders of the Common Securities will be subordinated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Preferred Securities. Except as provided in
the preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Debentures.
14. No Preemptive Rights.
The issuance of Preferred Securities and the issuance of Common Securities
are not subject to preemptive or other similar rights. The Holders shall have no
preemptive rights to subscribe for any additional securities.
15. Agreed Tax Treatment.
The Trust and, by its acceptance or acquisition of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
direct or indirect beneficial interest in, such Security, intend and agree to
treat this Security as indebtedness of the Debenture Issuer for United States
federal, state and local tax purposes, to treat the Trust as a grantor trust for
United States federal, state and local tax purposes, and to treat the Securities
(including but not limited to all payments and proceeds with respect to the
Securities) as undivided beneficial ownership interests in the Securities (and
payments and proceeds therefrom, respectively) for United States federal, state
and local tax purposes, unless otherwise required by law.
A-I-19
16. Miscellaneous.
These terms constitute a part of the Declaration.
The Initial Purchaser of Common Securities will provide a copy of the
Declaration, the Securities Guarantee and/or the Indenture (including any
supplemental indenture) to a Holder without charge upon written request to the
Initial Purchaser of Common Securities at its principal place of business.
A-I-20
EXHIBIT A-1
FORM OF 9.75% PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Restricted Preferred
Securities, including Global Preferred Securities.]
THIS SECURITY AND THE SHARES OF AMERICAN HOME MORTGAGE INVESTMENT CORP.
COMMON STOCK ISSUABLE UPON CONVERSION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF AMERICAN HOME MORTGAGE
INVESTMENT CORP. COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH AMERICAN HOME MORTGAGE
INVESTMENT CORP. OR ANY AFFILIATE OF AMERICAN HOME MORTGAGE INVESTMENT CORP. WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO AMERICAN HOME MORTGAGE INVESTMENT CORP.'S, AND
THE PROPERTY TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
PROPERTY TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES EVIDENCED HEREBY PURSUANT TO
CLAUSE (C) ABOVE AND THE RESALE RESTRICTION TERMINATION DATE. THE
A-1-1
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE (C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
[Include the following legend on all Preferred Securities certificates.]
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY ARE SUBJECT TO SIGNIFICANT RESTRICTIONS ON OWNERSHIP AND TRANSFER.
EXCEPT AS OTHERWISE PROVIDED PURSUANT TO AHM CAPITAL TRUST I'S AMENDED AND
RESTATED DECLARATION OF TRUST, DATED JUNE 28, 2007, AS THE SAME MAY BE AMENDED
OR SUPPLEMENTED FROM TIME TO TIME, (I) NO INDIVIDUAL MAY BENEFICIALLY OWN TRUST
SECURITIES IN EXCESS OF 9.8% OF THE TOTAL VALUE OF THE TRUST SECURITIES, (II) NO
INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF COMMON STOCK OF AMERICAN HOME MORTGAGE
INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IN EXCESS OF
6.5% OF THE MORE RESTRICTIVE OF THE TOTAL NUMBER OR VALUE OF THE OUTSTANDING
SHARES OF COMMON STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. (TAKING INTO
ACCOUNT THE COMMON STOCK INTO WHICH THE TRUST SECURITIES ARE CONVERTIBLE TO THE
EXTENT PROVIDED IN CODE SECTION 544 AND THE TREASURY REGULATIONS PROMULGATED
THEREUNDER), (III) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION
THEREOF IF IT WOULD CAUSE ANY INDIVIDUAL TO BENEFICIALLY OWN IN EXCESS OF 6.5%
OF THE VALUE OF THE SHARES OF EQUITY STOCK, TREATING THE TRUST SECURITIES AS
EQUITY STOCK OR, ALTERNATIVELY, TREATING THE TRUST SECURITIES AS THE COMMON
STOCK INTO WHICH THEY ARE CONVERTIBLE (TO THE EXTENT PROVIDED IN CODE SECTION
544 AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER), IF EITHER TREATMENT
WOULD CAUSE THIS PROVISION TO BE VIOLATED, (IV) NO PERSON MAY BENEFICIALLY OWN
SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST
SECURITIES OR ANY COMBINATION THEREOF IF SUCH OWNERSHIP WOULD RESULT IN AMERICAN
HOME MORTGAGE INVESTMENT CORP. BEING "CLOSELY HELD" UNDER SECTION 856(h) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND (V) NO PERSON MAY
BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IF SUCH OWNERSHIP WOULD
CAUSE AMERICAN HOME MORTGAGE INVESTMENT CORP. TO FAIL TO QUALIFY AS A REAL
ESTATE INVESTMENT TRUST UNDER THE CODE. ANY PERSON WHO ATTEMPTS OR PROPOSES TO
BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IN EXCESS OF THE ABOVE
LIMITATIONS MUST IMMEDIATELY NOTIFY AMERICAN HOME MORTGAGE INVESTMENT CORP. IN
WRITING. IF AN ATTEMPT IS MADE TO VIOLATE OR THERE IS A VIOLATION OF THESE
RESTRICTIONS, (A) ANY PURPORTED TRANSFER WILL BE VOID AB INITIO
A-1-2
AND WILL NOT BE RECOGNIZED BY AMERICAN HOME MORTGAGE INVESTMENT CORP. AND (B)
ANY PURPORTED OR ATTEMPTED BENEFICIAL OWNERSHIP OF SHARES OF EQUITY STOCK OF
AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION
THEREOF IN VIOLATION OF THESE RESTRICTIONS, WHETHER AS A RESULT OF A TRANSFER OR
NON-TRANSFER EVENT, WILL BE TRANSFERRED AUTOMATICALLY TO A SHARE TRUST AND SHALL
BE DESIGNATED SHARES-IN-TRUST. ALL TERMS USED IN THIS LEGEND AND DEFINED IN AHM
CAPITAL TRUST I'S AMENDED AND RESTATED DECLARATION OF TRUST DATED JUNE 28, 2007,
HAVE THE MEANINGS PROVIDED IN AHM CAPITAL TRUST I'S AMENDED AND RESTATED
DECLARATION OF TRUST DATED JUNE 28, 2007, AS THE SAME MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON
OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH SECURITYHOLDER WHO
SO REQUESTS. THIS LEGEND IS INTENDED TO PREVENT AMERICAN HOME MORTGAGE
INVESTMENT CORP. FROM BEING TREATED AS CLOSELY HELD WITHIN THE MEANING OF
SECTION 856(a)(6) AND SECTION 856(h) OF THE INTERNAL REVENUE CODE, AND SHALL BE
CONSTRUED CONSISTENT WITH THIS INTENT.
BY ITS ACQUISITION OF THIS CERTIFICATE THE HOLDER REPRESENTS THAT EITHER
(I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER SIMILAR RETIREMENT PLAN OR
ARRANGEMENT, WHETHER OR NOT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") (OR ANY SIMILAR LAWS OR REGULATIONS), OR AN
ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE THE ASSETS OF ANY SUCH
PLANS AND ARRANGEMENTS (EACH, A "PLAN") AND NO PART OF THE ASSETS TO BE USED BY
THE HOLDER TO ACQUIRE AND/OR HOLD THIS CERTIFICATE OR ANY INTEREST THEREIN
CONSTITUTES PLAN ASSETS OF ANY PLAN OR (II) THE ACQUISITION, HOLDING AND, IF
APPLICABLE, CONVERSION OF THIS CERTIFICATE WILL NOT CONSTITUTE A NON-EXEMPT
PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A
VIOLATION UNDER ANY OTHER APPLICABLE LAWS AND REGULATIONS THAT ARE SIMILAR TO
THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE.
[Include the following legend if the Preferred Security is in global form and
The Depository Trust Company is the Depositary.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
A-1-3
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-1-4
Certificate Number: ___ Aggregate Liquidation
Amount: $___________
CUSIP NO. 001298AA6
Certificate Evidencing 9.75% Preferred Securities
of
AHM Capital Trust I
9.75% Preferred Securities
(liquidation amount $1,000.00 per Preferred Security)
AHM Capital Trust I, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that ______________ (the "Holder")
is the registered owner of [$__________ in aggregate liquidation amount of
Preferred Securities of the Trust](1) [$__________ in aggregate liquidation
amount of Preferred Securities of the Trust as may from time to time be revised
as specified in Schedule A hereto](2) representing undivided beneficial
interests in the assets of the Trust designated the 9.75% Preferred Securities
(liquidation amount $1,000.00 per Preferred Security) (the "Preferred
Securities"). Subject to the Declaration (as defined below), the Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of June 28, 2007, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Initial Purchaser of Common Securities will provide a copy of the Declaration,
the Guarantee Agreement and the Indenture (including any supplemental
indenture(s)) to a Holder without charge upon written request to the Trust at
its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Guarantee
Agreement to the extent provided therein.
[The aggregate principal amount of the Preferred Security in global form
represented hereby may from time to time be reduced to reflect conversions,
repurchases or redemptions of a part of this Preferred Security in global form
or cancellations of a part of this Preferred Security in global form, in each
case, and in any such case, by means of notations on the Global
A-1-5
Certificate Transfer Schedule on the last page hereof. Notwithstanding any
provision of this Preferred Security to the contrary, conversions or redemptions
of a part of this Preferred Security in global form and cancellations of a part
of this Preferred Security in global form, may be effected without the
surrendering of this Preferred Security in global form, provided that
appropriate notations on the Global Certificate Transfer Schedule are made by
the Property Trustee or the Clearing Agency at the direction of the Property
Trustee, to reflect the appropriate reduction or increase, as the case may be,
in the aggregate liquidation amount of this Preferred Security in a global form
resulting therefrom or as a consequence thereof.] (2)
The Trust and, by its acceptance or acquisition of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
direct or indirect beneficial interest in, such Security, intend and agree to
treat this Security as indebtedness of the Debenture Issuer for United States
federal, state and local tax purposes, to treat the Trust as a grantor trust for
United States federal, state and local tax purposes, and to treat the Securities
(including but not limited to all payments and proceeds with respect to the
Securities) as undivided beneficial ownership interests in the Securities (and
payments and proceeds therefrom, respectively) for United States federal, state
and local tax purposes, unless otherwise required by law.
A-1-6
(1) Insert in Certificated Preferred Securities Only
(2) Insert in Global Preferred Securities Only
A-1-7
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of June, 2007.
AHM Capital Trust I
By:
-------------------------------------
not in his individual capacity but
solely as Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Certificate represents Preferred Securities referred to in the
within-mentioned Declaration.
Dated: June ___, 2007
Wilmington Trust Company,
not in its individual capacity but
solely as Property Trustee
By:
-------------------------------------
Authorized Signatory
A-1-8
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed (i) at a
rate per annum of 9.75% (the "Coupon Rate") of the liquidation amount of
$1,000.00 per Preferred Security, (ii) at the Coupon Rate on any overdue
Distribution payment (to the extent permitted by applicable law) and (iii) for
any period of time during which any Distribution payment is overdue, at the
Coupon Rate plus 2.00%, in every case, compounded quarterly, and each such rate
being the equivalent rate of interest payable on the Debentures to be held by
the Property Trustee. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Property Trustee has funds on hand legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of their original issuance and will be payable
quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year,
commencing on October 1, 2007. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months.
Subject to conditions set forth in the Declaration and the Indenture, the
Property Trustee may, at the direction of the Initial Purchaser of Common
Securities, at any time liquidate the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of American Home
Mortgage Investment Corp. Common Stock in the manner and according to the terms
set forth in the Declaration and the Indenture.
Holders of Preferred Securities will be entitled to the repurchase rights
specified in the Declaration and the Indenture upon the occurrence of a Change
in Control or a Termination of Trading.
A-1-9
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
AHM Capital Trust I
The undersigned owner of these Preferred Securities hereby exercises the
option to convert these Preferred Securities, or the portion below designated,
into Common Stock (as such term is defined in the Indenture, dated as of June
28, 2007, between American Home Mortgage Investment Corp. and Wilmington Trust
Company, as Debenture Trustee (the "Indenture")) in accordance with the terms of
the Indenture and the Amended and Restated Declaration of Trust (as amended from
time to time, the "Declaration"), dated as of June 28, 2007, among Alan B. Horn,
Stephen A. Hozie and Michael Strauss, as Administrative Trustees, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property
Trustee, American Home Mortgage Investment Corp., as Initial Purchaser of Common
Securities and as Debenture Issuer, and by the Holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Securities set forth as Annex I to the Declaration and the
Indenture) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Securities set forth as Annex I to the Declaration and the Indenture).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration, the Indenture and the Preferred Securities, agrees
to be bound by the terms of the Registration Rights Agreement relating to the
Common Stock issuable upon conversion of the Preferred Securities and agrees to
appoint the Conversion Agent for the purpose of effecting the conversion of the
Preferred Securities into shares of Common Stock.
Date:
--------------------------------
Number of Preferred Securities to be converted:
-----------------------------
A-1-10
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Sign exactly as your name appears on this Preferred Security certificate) (for
conversion of definitive Preferred Securities only)
- ------------------------------------------------------------------------------
Please print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Signature Guarantee*:
----------------------------
- -----------------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-1-11
NOTICE OF REPURCHASE ELECTION
To: Wilmington Trust Company,
as Property Trustee of
AHM Capital Trust I
The undersigned owner of these Preferred Securities, in connection with
the occurrence of a Change in Control or a Termination of Trading (as each such
term is defined in the Indenture, dated as of June 28, 2007, between American
Home Mortgage Investment Corp. and Wilmington Trust Company, as Debenture
Trustee (the "Indenture")) hereby exercises the right to require the repurchase
of these Preferred Securities, or the portion below designated, on the
Repurchase Date in accordance with the terms of the Indenture and the Amended
and Restated Declaration of Trust, dated as of June 28, 2007, among Alan B.
Horn, Stephen A. Hozie and Michael Strauss, as Administrative Trustees,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Property Trustee, American Home Mortgage Investment Corp., as Initial Purchaser
of Common Securities and as Debenture Issuer, and by the Holders, from time to
time, of undivided beneficial interests in the assets of the Trust to be issued
pursuant to the Declaration (as amended from time to time, the "Declaration").
Pursuant to the aforementioned election to require repurchase of these Preferred
Securities, the undersigned hereby directs the Exchange Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Securities set
forth in the Indenture and as Annex I to the Declaration) and (ii) immediately
tender such Debentures on behalf of the undersigned, for repurchase by the
Debenture Issuer at the Repurchase Price (as such term is defined in the
Indenture) on the Repurchase Date (as such term is defined in the Indenture).
Date:
--------------------------------
Number of Preferred Securities to be repurchased:
---------------------------
A-1-12
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Sign exactly as your name appears on this Preferred Security certificate) (for
conversion of definitive Preferred Securities only)
- ------------------------------------------------------------------------------
Please print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Signature Guarantee*:
--------------------------------
- -----------------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-1-13
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
_______________________________________________________________________agent
to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ___________________________________
Signature: _______________________________
(Sign exactly as your name appears on this Preferred Security Certificate)
Signature Guarantee*: _______________________
- ------------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
A-1-14
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OF RESTRICTED PREFERRED SECURITIES
This certificate relates to _________ Preferred Securities held in (check
applicable space) ______ book-entry or ______ definitive form by the
undersigned.
(A) The undersigned has requested the Property Trustee by written order to
exchange or register the transfer of a Preferred Security or Preferred
Securities.
(B) The undersigned confirms that such Preferred Securities are being
(check one box below):
(1) [__] transferred to American Home Mortgage Investment Corp. or
a subsidiary thereof; or
(2) [__] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [__] transferred pursuant to an available exemption from the
registration requirements of the Securities Act of 1933.
Unless the box below is checked, the undersigned confirms that such Securities
are not being transferred to an "affiliate" of the American Home Mortgage
Investment Corp. as defined in Rule 144 under the Securities Act of 1933, as
amended (an "Affiliate"):
(4) [__] The transferee is an Affiliate of American Home Mortgage
Investment Corp.
Unless one of the boxes (1) through (3) in (B) above is checked, the Property
Trustee will refuse to register any of the Preferred Securities evidenced by
this certificate in the name of any person other than the registered Holder
thereof; provided, however, that if box (3) is checked, the Property Trustee may
require, prior to registering any such transfer of the Preferred Securities such
legal opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended, such as the exemption provided by Rule 144
under such Act.
A-1-15
Signature:
---------------------------------------
Signature Guarantee*:
- --------------------------------------------------
Signature must be guaranteed Signature
- --------------------------------------------------
Signature
- ---------------------
* Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-1-16
Schedule A
Global Certificate Transfer Schedule
Changes to Liquidation Amount of Global Security
Liquidation Amount of Securities Remaining Liquidation Amount of
by which this Global Security Is the Global Security (following
Date to Be Reduced or Increased decrease or increase)
- ---- -------------------------- ---------------------
Schedule to be maintained by Property Trustee or Clearing Agency in cooperation
with Property Trustee, as applicable.
A-1-17
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE OF THE SECURITY UPON THE CONVERSION OF WHICH THE COMMON
STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST DATE ON WHICH AMERICAN HOME
MORTGAGE INVESTMENT CORP. OR ANY AFFILIATE OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY
(A) TO AMERICAN HOME MORTGAGE INVESTMENT CORP. OR ANY SUBSIDIARY THEREOF, (B)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO AMERICAN HOME MORTGAGE INVESTMENT CORP.'S, AND
THE PROPERTY TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
PROPERTY TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
UPON THE EARLIER OF THE TRANSFER OF THE SECURITIES EVIDENCED HEREBY PURSUANT TO
CLAUSE (C) ABOVE AND THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY ARE SUBJECT TO SIGNIFICANT RESTRICTIONS
A-2-1
ON OWNERSHIP AND TRANSFER. EXCEPT AS OTHERWISE PROVIDED PURSUANT TO AHM CAPITAL
TRUST I'S AMENDED AND RESTATED DECLARATION OF TRUST, DATED JUNE 28, 2007, AS THE
SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, (I) NO INDIVIDUAL MAY
BENEFICIALLY OWN TRUST SECURITIES IN EXCESS OF 9.8% OF THE TOTAL VALUE OF THE
TRUST SECURITIES, (II) NO INDIVIDUAL MAY BENEFICIALLY OWN SHARES OF COMMON STOCK
OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IN EXCESS OF 6.5% OF THE MORE RESTRICTIVE OF THE TOTAL
NUMBER OR VALUE OF THE OUTSTANDING SHARES OF COMMON STOCK OF AMERICAN HOME
MORTGAGE INVESTMENT CORP. (TAKING INTO ACCOUNT THE COMMON STOCK INTO WHICH THE
TRUST SECURITIES ARE CONVERTIBLE TO THE EXTENT PROVIDED IN CODE SECTION 544 AND
THE TREASURY REGULATIONS PROMULGATED THEREUNDER), (III) NO INDIVIDUAL MAY
BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IF IT WOULD CAUSE ANY
INDIVIDUAL TO BENEFICIALLY OWN IN EXCESS OF 6.5% OF THE VALUE OF THE SHARES OF
EQUITY STOCK, TREATING THE TRUST SECURITIES AS EQUITY STOCK OR, ALTERNATIVELY,
TREATING THE TRUST SECURITIES AS THE COMMON STOCK INTO WHICH THEY ARE
CONVERTIBLE (TO THE EXTENT PROVIDED IN CODE SECTION 544 AND THE TREASURY
REGULATIONS PROMULGATED THEREUNDER), IF EITHER TREATMENT WOULD CAUSE THIS
PROVISION TO BE VIOLATED, (IV) NO PERSON MAY BENEFICIALLY OWN SHARES OF EQUITY
STOCK OF AMERICAN HOME MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY
COMBINATION THEREOF IF SUCH OWNERSHIP WOULD RESULT IN AMERICAN HOME MORTGAGE
INVESTMENT CORP. BEING "CLOSELY HELD" UNDER SECTION 856(h) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND (V) NO PERSON MAY
BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IF SUCH OWNERSHIP WOULD
CAUSE AMERICAN HOME MORTGAGE INVESTMENT CORP. TO FAIL TO QUALIFY AS A REAL
ESTATE INVESTMENT TRUST UNDER THE CODE. ANY PERSON WHO ATTEMPTS OR PROPOSES TO
BENEFICIALLY OWN SHARES OF EQUITY STOCK OF AMERICAN HOME MORTGAGE INVESTMENT
CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IN EXCESS OF THE ABOVE
LIMITATIONS MUST IMMEDIATELY NOTIFY AMERICAN HOME MORTGAGE INVESTMENT CORP. IN
WRITING. IF AN ATTEMPT IS MADE TO VIOLATE OR THERE IS A VIOLATION OF THESE
RESTRICTIONS, (A) ANY PURPORTED TRANSFER WILL BE VOID AB INITIO AND WILL NOT BE
RECOGNIZED BY AMERICAN HOME MORTGAGE INVESTMENT CORP. AND (B) ANY PURPORTED OR
ATTEMPTED BENEFICIAL OWNERSHIP OF SHARES OF EQUITY STOCK OF AMERICAN HOME
MORTGAGE INVESTMENT CORP. OR TRUST SECURITIES OR ANY COMBINATION THEREOF IN
VIOLATION OF THESE RESTRICTIONS, WHETHER AS A RESULT OF A TRANSFER OR
NON-TRANSFER EVENT, WILL BE TRANSFERRED AUTOMATICALLY TO A SHARE TRUST AND SHALL
BE DESIGNATED SHARES-IN-TRUST. ALL TERMS USED IN THIS LEGEND AND DEFINED IN AHM
CAPITAL TRUST I'S AMENDED AND RESTATED DECLARATION OF TRUST DATED JUNE 28, 2007,
HAVE THE MEANINGS PROVIDED IN AHM CAPITAL TRUST I'S AMENDED
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AND RESTATED DECLARATION OF TRUST DATED JUNE 28, 2007, AS THE SAME MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE
RESTRICTIONS ON OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH
SECURITYHOLDER WHO SO REQUESTS. THIS LEGEND IS INTENDED TO PREVENT AMERICAN HOME
MORTGAGE INVESTMENT CORP. FROM BEING TREATED AS CLOSELY HELD WITHIN THE MEANING
OF SECTION 856(a)(6) AND SECTION 856(h) OF THE INTERNAL REVENUE CODE, AND SHALL
BE CONSTRUED CONSISTENT WITH THIS INTENT.
THIS COMMON SECURITY IS NOT TRANSFERABLE EXCEPT AS SET FORTH IN SECTION
9.1(b) OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF AHM CAPITAL TRUST I,
DATED AS OF JUNE 28, 2007, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
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Certificate Evidencing Common Securities
of
AHM Capital Trust I
9.75% Common Securities
(liquidation amount $1,000.00 per Common Security)
AHM Capital Trust I, a statutory trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that _______________ (the "Holder")
is the registered owner of ______________ common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 9.75% Common Securities (liquidation amount $1,000.00 per Common
Security) (the "Common Securities"). Subject to the limitations in Section
9.1(b) of the Declaration (as defined below), the Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust, dated as of June 28,
2007, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used but not defined herein shall
have the meaning given them in the Declaration. The Initial Purchaser of Common
Securities will provide a copy of the Declaration, the Guarantee Agreement and
the Indenture (including any supplemental indenture) to a Holder without charge
upon written request to the Initial Purchaser of Common Securities at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder to the extent provided therein.
The Trust and, by its acceptance or acquisition of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
direct or indirect beneficial interest in, such Security, intend and agree to
treat this Security as indebtedness of the Debenture Issuer for United States
federal, state and local tax purposes, to treat the Trust as a grantor trust for
United States federal, state and local tax purposes, and to treat the Securities
(including but not limited to all payments and proceeds with respect to the
Securities) as undivided beneficial ownership interests in the Securities (and
payments and proceeds therefrom, respectively) for United States federal, state
and local tax purposes, unless otherwise required by law.
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IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of June, 2007.
AHM Capital Trust I
By:
-------------------------------------
not in his individual capacity but
solely as Administrative Trustee
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed (i) at a
rate per annum of 9.75% (the "Coupon Rate") of the liquidation amount of
$1,000.00 per Preferred Security, (ii) at the Coupon Rate on any overdue
Distribution payment (to the extent permitted by applicable law) and (iii) for
any period of time during which any Distribution payment is overdue, at the
Coupon Rate plus 2.00%, in every case, compounded quarterly, and each such rate
being the equivalent rate of interest payable on the Debentures to be held by
the Property Trustee. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Property Trustee has funds on hand legally available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the date of original issuance of the Common Securities and will be payable
quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year,
commencing on October 1, 2007, except as otherwise described below.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
Subject to the conditions set forth in the Declaration and the Indenture,
the Property Trustee may, at the direction of the Initial Purchaser of Common
Securities, at any time liquidate the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneous with any redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
Under certain circumstances, the right of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Preferred
Securities (as defined in the Declaration), as provided in the Declaration.
The Common Securities shall be redeemable as provided in the Declaration.
A-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
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- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
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_______________________________________________________________________agent to
transfer this Common Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: __________________________
Signature: ______________________
(Sign exactly as your name appears on this Common Security Certificate)
Signature Guarantee*: _____________________
- ---------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-2-7