EXHIBIT 4.5
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AMENDED AND RESTATED DECLARATION
OF TRUST
COUNTRYWIDE CAPITAL I
Dated as of December ____, 1996
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) ........................................................ 5.3(a)
310(c) ........................................................ Inapplicable
311(c) ........................................................ Inapplicable
312(a) ........................................................ 2.2(a)
312(b) ........................................................ 2.2(b)
313 ........................................................ 2.3
314(a) ........................................................ 2.4
314(b) ........................................................ Inapplicable
314(c) ........................................................ 2.5
314(d) ........................................................ Inapplicable
314(f) ........................................................ Inapplicable
315(a) ........................................................ 3.9(b)
315(c) ........................................................ 3.9(a)
315(d) ........................................................ 3.9(a)
316(a) ........................................................ Annex I
316(c) ........................................................ 3.6(e)
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* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
2
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
COUNTRYWIDE CAPITAL I
December __, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of December __, 1996, by the Original Trustees (as defined herein),
the Sponsor (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 Original Trustees and the Sponsor established Countrywide
Capital I, a trust under the Business Trust Act (as defined herein) (the
"Trust"), pursuant to a Declaration of Trust, dated as of October 17, 1996 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on October 15, 1996, 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 the
Debentures (as defined herein) of the Debenture Issuer (as defined herein) and
the Debenture Guarantee (as defined herein) of the Sponsor endorsed thereon;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
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Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
herein 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.
"Affiliate" has the same meaning as given to that term in Rule 405 of
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the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
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"Authorized Officer" of a Person means any Person that is authorized
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to bind such Person.
"Book-Entry Interest" means a beneficial interest in a Global
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Certificate, 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, with respect to any series of Securities, any
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day other than Saturday, Sunday or any other day on which federal or state
banking institutions in the Borough of Manhattan, the City of New York or Los
Angeles, California, are authorized or obligated by any applicable law,
executive order or regulation to close.
2
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
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Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
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any successor legislation.
"Capital Securities Guarantee" means the guarantee agreement to be
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dated as of December __, 1996, of the Sponsor in respect of the Capital
Securities.
"Capital Security" or "Capital Securities" has the meaning specified
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in Section 7.1(a).
"Capital Security Beneficial Owner" means, with respect to a Book-
---------------------------------
Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules and regulations of such Clearing Agency).
"Capital Security Certificate" means a certificate representing a
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Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a Capital
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Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
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Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital 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 of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
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financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers securities deposited with the Clearing
Agency.
"Closing Date" means the "Closing Time" under the Underwriting
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Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission or a
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successor federal agency performing comparable functions.
"Common Securities Guarantee" means the guarantee agreement to be
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dated as of December __, 1996 of the Sponsor in respect of the Common
Securities.
3
"Common Security" or "Common Securities" has the meaning specified in
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Section 7.1(a).
"Common Security Certificate" means a definitive certificate in fully
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registered form representing one or more Common Securities substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
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Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee
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at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 101 Barclay Street, Floor 21 West, New
York, New York 10286.
"Covered Person" means: (a) any officer, director, shareholder,
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partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Guarantee" means the guarantee by the Sponsor of the
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Debentures endorsed thereon.
"Debenture Issuer" means Countrywide Home Loans, Inc., a New York
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corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
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corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
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Debenture Issuer under the Indenture to the Trust which Debentures will be
registered in the name of and held by the Institutional Trustee or, upon the
dissolution, winding-up or termination of the Trust, the Depositary or the
Holder, as the case may be, a specimen certificate for such series of Debentures
being substantially in the form of Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
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"Definitive Capital Security Certificates" has the meaning set forth
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in Section 9.4.
4
"Depositary" means, with respect to the Capital Securities, DTC, or
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another Clearing Agency.
"Distribution" means a distribution payable to Holders of Securities
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in accordance with Section 6.1.
"DTC" means The Depository Trust Company, New York, New York, the
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initial Clearing Agency.
"ERISA" means the Employee Retirement Income Security Act of 1974,
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as amended.
"ERISA Plan" means an employee benefit plan subject to ERISA or an
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individual retirement account or plan subject to Section 4975 of the Code.
"Event of Default" in respect of the Securities means an Indenture
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Event of Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
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from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
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10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
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"Guarantor" has the meaning set forth in the Indenture.
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"Holder" means a Person in whose name a Certificate representing a
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Security is registered.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
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Indemnified Person.
"Indenture" means the Indenture dated as of December __, 1996, among
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the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures and the Debenture Guarantees are to be
issued.
"Indenture Event of Default" means an Event of Default as defined in
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the Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
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requirements set forth in Section 5.3 and shall initially mean The Bank of New
York, a New York banking corporation.
"Institutional Trustee Account" has the meaning set forth in Section
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3.8(c).
"Investment Company" means an investment company as defined in the
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Investment Company Act.
5
"Investment Company Act" means the Investment Company Act of 1940, as
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amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
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"Majority in liquidation amount of the Securities" means, except as
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provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital 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
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
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Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
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certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered in connection with compliance with a condition or covenant
provided for it in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the condition or covenant and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each such officer in rendering the
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
condition or covenant 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.
"Original Trustees" means, Eric P. Sieracki and Carlos Garcia, each in
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his capacity as a Regular Trustee of the Trust and The Bank of New York
(Delaware) in its capacity as Delaware Trustee of the Trust, in each case
appointed pursuant to the Original Declaration.
"Paying Agent" has the meaning specified in Section 7.2.
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"Person" means a legal person, including any individual, corporation,
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estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Pricing Agreement" means the pricing agreement between the Trust, the
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Debenture Issuer, and the underwriter party to the Underwriting Agreement with
respect to the offer and sale of the Capital Securities.
"Quorum" means a majority of the Regular Trustees or, if there are
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only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
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"Related Party" means, with respect to the Sponsor, any direct or
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indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
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Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, the
treasurer, any assistant treasurer or other officer of the Corporate Trust
Office of the Institutional Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
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"Securities" means the Common Securities and the Capital Securities.
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"Securities Act" means the Securities Act of 1933, as amended from
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time to time or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
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Capital Securities Guarantee.
"Sponsor" means Countrywide Credit Industries, Inc., a Delaware
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corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
7
"Successor Delaware Trustee" has the meaning set forth in Section
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5.7(b).
"Successor Entity" has the meaning set forth in Section 3.15(b).
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"Successor Institutional Trustee" has the meaning set forth in Section
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5.7(b).
"Successor Securities" has the meaning set forth in Section 3.15(b).
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"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"Tax Event" has the meaning set forth in Annex I hereto.
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"10% in liquidation amount of the Securities" means, except as
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provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
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temporary and proposed regulations, promulgated under the Code by the United
States Treasury Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
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Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
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offering and sale of Capital Securities substantially in the form of Exhibit C.
8
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only
Trustee which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S)310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
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(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such record date, provided that neither the
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Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Institutional Trustee. The Institutional Trustee shall preserve,
in as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity) provided that the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
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9
Within 60 days after May 15 of each year, the Institutional Trustee
shall provide to the Holders of the Capital Securities such reports as are
required by (S) 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by (S) 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of (S) 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports information
(if any) and compliance certificates required by (S) 314 of the Trust Indenture
Act in the form, in the manner and at the times required by (S) 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
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Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance
with all covenants and conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in (S) 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to (S) 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
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(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote or consent, on behalf of the Holders of all of the
Capital Securities, waive any past Event of Default in respect of the Capital
Securities and its consequences, provided that, if the underlying Indenture
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Event of Default:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority")
to be waived under the Indenture, such Event of Default under this
Declaration may only be waived by the vote or consent of the Holders
of at least the proportion in liquidation amount of the Capital
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
10
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 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
Indenture Event of Default shall cease to exist, and any Event of Default with
respect to the Capital 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 Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
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.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote or consent, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Indenture
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Event of Default:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived under the Indenture, such Event of Default under this
Declaration may only be waived by the vote or consent of the Holders
of at least the proportion in liquidation amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided, further, that, notwithstanding (i) or (ii) above, each Holder of
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Common Securities will be deemed to have waived any such Indenture Event of
Default and all Events of Default with respect to the Common Securities and
their consequences until all Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated, and until such
Events of Default with respect to the Capital Securities have been so cured,
waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the Capital Securities and only the
Holders of the Capital Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of (S)(S)
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
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(S)(S) 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 in the
Trust Indenture Act. Subject to the foregoing provisions in this Section
2.6(b), upon such waiver, any such Indenture Event of Default shall cease to
exist, and any Event of Default with respect to the Common Securities arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Indenture Event of Default by the Institutional
Trustee at the direction of the Holders of the Capital Securities constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.6(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and (S) 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 Events of Default; Notice.
-------------------------
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all defaults with respect to the Securities
actually known to a Responsible Officer of the Institutional Trustee, unless
such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Indenture Event of Default, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein);
provided, however, that, except for a default in the payment of principal of (or
- -------- ------- ----
premium, if any) or interest on any of the Debentures or in the payment of any
sinking fund installment established for the Debentures, the Institutional
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Institutional Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee
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charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
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The Trust is named "Countrywide Capital I," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders. The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
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The address of the principal office of the Trust is c/o Countrywide
Credit Industries, Inc., 155 North Lake Avenue, Pasadena, California 91101. On
ten Business Days' written notice to the Holders, the Regular Trustees may
designate another principal office.
The address of the Trust's registered office in the State of Delaware
is c/o The Bank of New York (Delaware), 400 White Clay Center, Route 273,
Newark, Delaware 19711, Attn: Corporate Trust Administrator.
SECTION 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the gross proceeds from such sale to acquire the
Debentures and the Debenture Guarantee, and (b) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto. The Trust shall not issue any securities other than the Securities,
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
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Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the
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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, the
Debenture Guarantee and the Institutional 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 Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common Securities
in accordance with this Declaration; provided, however, that the Trust may
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issue no more than one series of Capital Securities and no more than one
series of Common Securities, and, provided, further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Capital
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor and the Debenture
Issuer, including any amendments thereto, pertaining to the Capital
Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Capital Securities in any State
in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to The New York Stock Exchange, Inc. or any other national securities
exchange or the Nasdaq Stockmarket's
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National Market for listing upon notice of issuance of any Capital
Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Capital Securities
under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the Capital Securities;
(c) to acquire the Debentures and the Debenture Guarantee with the
proceeds of the sale of the Capital Securities and the Common Securities;
provided, however, that the Regular Trustees shall cause legal title to the
- -------- -------
Debentures and the Debenture Guarantee to be held of record in the name of the
Institutional Trustee for the benefit of the Holders of the Capital Securities
and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event; provided that the Regular Trustees
-------- ----
shall consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S) 316(c) of the Trust Indenture Act, Distributions,
voting rights, redemptions, exchanges and other distributions upon dissolution,
winding-up or termination, and to issue relevant notices to the Holders of
Capital Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
15
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of any notice
received from the Debenture Issuer of its election to defer payments of interest
on the Debentures by extending the interest payment period under the Indenture;
(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 business 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 of Holders Securities 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 or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
(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
16
prepared and filed by the Regular Trustees, on behalf of the Trust.
(q) to call a meeting of the Holders of the Capital Securities if
directed to do so by Holders of at least 10% in aggregate liquidation amount
thereof; and
(r) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees are authorized and directed to operate the Trust
in such a way so that the Trust will not be required to register as an
Investment Company nor be characterized as other than a grantor trust for United
Stated federal income tax purposes. The Regular Trustees are authorized to take
any action, not inconsistent with applicable law, this Declaration or the
certificates of incorporation of the Debenture Issuer and the Guarantor, that
the Regular Trustees determine in their discretion to be necessary or desirable
to cause the Debentures to be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not cause or
permit the Trust to take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and
---------------------------------------
the Trustees.
------------
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Institutional Trustee) 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;
17
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration (including
Annex I), (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received any required consent of Holders
and an opinion of counsel to the effect that such modification will
not cause more than an insubstantial risk that for United States
federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Institutional
--------------------------------------
Trustee.
-------
(a) The legal title to the Debentures and the Debenture Guarantee
shall be owned by and held of record in the name of the Institutional Trustee in
trust for the benefit of the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures and the Debenture
Guarantee shall vest automatically in each Person who may hereafter be appointed
as Institutional 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 and the Debenture Guarantee have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures and the Debenture
18
Guarantee to the Regular Trustees or to the Delaware Trustee (if the
Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders
and, upon the receipt of payments of funds made in respect of the
Debentures and the Debenture Guarantee held by the Institutional Trustee,
deposit such funds into the Institutional Trustee Account and make payments
to the Holders of the Capital Securities and Holders of the Common
Securities from the Institutional Trustee Account in accordance with
Section 6.1 and on liquidation, redemption and otherwise. Funds in the
Institutional Trustee Account shall be held uninvested and without
liability for interest thereon until disbursed in accordance with this
Declaration. The Institutional Trustee Account shall be an account that is
maintained with a banking institution the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to the
Capital Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of Distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures and the Debenture Guarantees to Holders upon
the occurrence of certain special events (as may be defined in the terms of
the Securities) arising from a Tax Event or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided, however, that if an Event of Default has
-------- -------
19
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date) following any applicable grace period, then a Holder of Capital
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 Capital Securities of
such Holder (a "Direct Action") on or after the respective due dates specified
in the Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such Holder
of Capital Securities to the extent of any payment made by the Debenture Issuer
or the Guarantor to such Holder of Capital Securities in such Direct Action;
provided that no Holder of the Common Securities may exercise any such right of
subrogation so long as an Event of Default with respect to the Capital
Securities has occurred and is continuing. Except as provided in the preceding
sentences, the Holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation have been distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges as the holder of Debentures and the
Debenture Guarantee under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and is
continuing, the Institutional Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures and the Debenture Guarantee subject to
the rights of the Holders pursuant to the terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any
20
time and a successor Paying Agent or additional Paying Agents may be appointed
at any time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of
--------------------------------------
the Institutional Trustee.
-------------------------
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee shall
be determined solely by the express provisions of this Declaration and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional Trustee may conclusively rely, as to the
truth of the statements
21
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional Trustee and
conforming to the requirements of this Declaration; but in the case of
any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Institutional
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Debentures or the Guarantee or the payment of any taxes or assessments
levied thereon or in connection therewith;
22
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
---------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal
23
matters or advice within the scope of such experts' area of expertise shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its employees. The
Institutional Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) subject to Section 3.9(a), the Institutional Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any Holder, unless such
Holder shall have offered to the Institutional Trustee security and
indemnity reasonably satisfactory to the Institutional Trustee, against the
costs, expenses (including attorneys' fees and expenses and the expenses of
the Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee; provided, however, that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the
24
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agents' taking
such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (A) may request instructions from the
Holders which instructions from the Holders may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (B) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received and (C) shall be protected in conclusively
relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon
it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law to perform
any such act or acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Institutional Trustee shall be
construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Sections 5.2 and 5.6, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee described
in this Declaration. Except as set forth in Sections 5.2 and 5.6, the Delaware
Trustee shall be a Trustee for the sole and limited
25
purpose of fulfilling the requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12 [Intentionally Omitted]
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for thirty-four (34) years from the Closing
Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders, the Delaware Trustee or the Institutional Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State of the United States; provided that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the
26
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;
(ii) the Debenture Issuer expressly acknowledges a trustee for the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures and the Guarantor
expressly acknowledges such trustee of the Successor Entity as the holder
of the Debenture Guarantee;
(iii) the Capital Securities remain listed, if they are listed
immediately prior to the effective date of the consolidation, amalgamation
or merger or any Successor Securities are listed if the Capital Securities
were listed immediately prior to the effective date of the consolidation,
amalgamation or merger, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
another organization on which the Capital Securities were then so listed or
quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders (or
the holders of any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the
Successor Entity as a result of such merger, consolidation, amalgamation or
replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Regular Trustees have received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders (or the holders of any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the Successor Entity);
27
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Capital Securities Guarantee and the Common Securities Guarantee.
(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 to be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
The Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount at least equal to 3% of the total capital of the Trust, at
the same time as the Capital Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
--------------------------------
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Capital Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital 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
28
filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if deemed desirable by the Sponsor to prepare for filing by the
Trust of an application to the New York Stock Exchange or any other national
securities exchange or the Nasdaq Stock Market's National Market for listing
upon notice of issuance of any Capital Securities;
(d) if deemed necessary or desirable by the Sponsor to prepare for
filing by the Trust with the Commission a registration statement on Form 8-A
relating to the registration of the Capital Securities under Section 12(b) of
the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Capital Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that, the number of Trustees shall in
-------- -------
no event be less than two (2); provided further that (1) there shall be a
-------- -------
Delaware Trustee if required by Section 5.2; (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional 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, in which case Section 3.11 shall have no
application to such entity in its capacity as Institutional Trustee.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
29
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which maintains its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law.
SECTION 5.3 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Indenture, the Debt Securities (as defined therein) issued or
to be issued thereunder, the Declaration, the Trust Securities issued or to be
issued thereunder and the Capital Securities Guarantees and Common Securities
Guarantees in connection therewith (including the Capital Securities Guarantee
in connection herewith) shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the
30
proviso contained in Section 310(b)(1) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
The Bank of New York.
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
-------------------------------------------------------
Trustee Generally.
- -----------------
Each Regular Trustee and the 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 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Eric P. Sieracki
Sandor E. Samuels
Carlos Garcia
(a) Except where a requirement for action by a specific number of
Regular Trustees is expressly set forth in this Declaration and except with
respect to any action the taking of which is the subject of a meeting of the
Regular Trustees any action required or permitted to be taken by the Regular
Trustees may be taken by, and any power of the Regular Trustees may be exercised
by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6.
SECTION 5.6 Initial Delaware Trustee.
------------------------
The initial Delaware Trustee shall be:
The Bank of New York (Delaware).
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.7(b), Trustees may be appointed, removed or
replaced without cause at any time except during an Event of Default:
31
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.7(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 the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
-------- -------
that:
(i) no such resignation of the Trustee that acts as the Institutional
Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
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(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Institutional Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 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 the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
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 annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.10 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular
33
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
SECTION 5.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation
34
succeeding to all or substantially all the corporate trust business of the
Institutional Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Institutional Trustee or the Delaware Trustee, as the case may
be, hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Capital Securities and the Common Securities in accordance
with the preferences set forth in their respective terms. If and to the extent
that the Debenture Issuer makes a payment of interest (including Compounded
Interest (as defined in the Indenture) and Additional Interest (as defined in
the Indenture)), premium and/or principal on the Debentures (or the Sponsor
makes a payment in respect of the Debenture Guarantee) held by the Institutional
Trustee (the amount of any such payment being a "Payment Amount"), the
Institutional 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.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Capital
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 Capital Securities
and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual signature of any present or
any future Regular Trustee. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular Trustee before
the
35
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.
(c) The 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.
(d) 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.
(e) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent.
------------
In the event that the Capital Securities are not in book-entry only
form, the Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where, in addition to payment methods
provided for in the terms of the Securities, the Capital Securities may be
presented for payment ("Paying Agent"). The Trust may appoint the Paying Agent
and may appoint one or more additional paying agents in such other locations as
it shall determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and
address of any Paying Agent not a party to this Declaration. If the Trust fails
to appoint or maintain another entity as Paying Agent, the Institutional Trustee
shall act as such. The Bank of New York or any of its Affiliates may act as
Paying Agent. The Trust shall initially act as Paying Agent for the Capital
Securities and the Common Securities. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice
36
to the Institutional Trustee. In the event that The Bank of New York shall no
longer be the Paying Agent, the Institutional Trustee shall appoint a successor
to act as Paying Agent (which shall be a bank or trust company).
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
------------------------------------
(a) The Trust shall dissolve:
(i) on December 31, 2050, the expiration of the term of the Trust;
(ii) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(iii) (other than in connection with a merger, consolidation or
similar transaction not prohibited by the Indenture, the Declaration, the
Debt Guarantee or the Capital Securities Guarantee, as the case may be)
upon the filing of a certificate of dissolution or its equivalent with
respect to the Sponsor or the Debenture Issuer upon the consent of the
Holders of at least a Majority in liquidation amount of the Securities
voting together as a single class to file a certificate of cancellation
with respect to the Trust or upon the revocation of the charter of the
Sponsor or the Debenture Issuer and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iv) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Trust or the Debenture
Issuer;
(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 occurrence and continuation of a Tax Event pursuant to
which the Trust shall be dissolved in accordance with the terms of the
Securities and the Debentures and Debenture Guarantees endorsed thereon
shall, subject to the terms of the Securities, be distributed to the
Holders of Securities in exchange for the Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
37
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up of the
Trust, the Trustees shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
(d) If the Trust is dissolved and at the time of dissolution the
Capital Securities are rated by at least one "nationally recognized statistical
rating organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act, the Debenture Issuer shall use its best efforts to
obtain from at least one such or another rating organization a rating for the
Debentures.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities; Capital
Securities Acquired by ERISA Plans.
----------------------------------
(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) Subject to this Article IX, Capital Securities shall be freely
transferable. Notwithstanding the foregoing, Capital Securities may not be
acquired by any Person who is, or who in acquiring such Capital Securities is
using the assets of, an ERISA Plan unless one of the following class exemptions
is applicable: (i) Prohibited Transaction Class Exemption 90-1 ("PTE 90-1"),
regarding investments by insurance company pooled separate accounts, (ii)
Prohibited Transaction Class Exemption 91-38 ("PTE 91-38") regarding investments
by bank collective investment funds, (iii) Prohibited Transaction Class
Exemption 84-14 ("PTE 84-14"), regarding transactions effected by qualified
professional asset managers, (iv) Prohibited Transaction Class Exemption 96-23
("PTE 96-23"), regarding transactions effected by in-house asset managers, or
(v) Prohibited Transaction Class Exemption 95-60 ("PTE 95-60"), regarding
investments by insurance company general accounts. The acquisition of Capital
Securities by any Person who is, or who in acquiring such Capital Securities is
using the assets of, an ERISA Plan shall be deemed to constitute a
representation by such Person to the Trust that (i) such Person is eligible for
exemptive relief available pursuant to one of PTE 90-1, PTE 91-38, PTE 84-14,
PTE 96-23 or PTE 95-60 with respect to the acquisition and holding of such
Capital Securities, and (ii) neither Countrywide Home Loans, Inc. nor
Countrywide Credit Industries, Inc. is a "fiduciary", within the meaning of
Section 3(21) of ERISA and the regulations thereunder, with respect to such
Person's interest in the Capital Securities or the Debentures.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers and exchanges of Certificates, which will be
effected without charge but only upon payment (with such indemnity as the
Regular Trustees, Institutional Trustee, or Debenture Issuer may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Institutional Trustee shall cause one or more new Certificates to be issued in
the name of the designated transferee or transferees. Every Certificate
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Institutional Trustee duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Every Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to
38
the obligations of a Holder hereunder upon the receipt by such transferee of a
Certificate. By acceptance of a Certificate, each transferee shall be deemed to
have agreed to be bound by this Declaration. The Trust will not be required to
register or cause to be registered the transfer or exchange of Capital
Securities after such Capital Securities have been called for redemption.
SECTION 9.3 Deemed Security Holders.
------------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Capital Securities, the
Capital Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Capital Security Certificates
(each a "Global Certificate"), to be delivered to and deposited with DTC, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Capital Security
Beneficial Owner will receive a definitive Capital Security Certificate
representing such Capital Security Beneficial Owner's interests in such Global
Certificates, except as provided in Section 9.7. Unless and until definitive,
fully registered Capital Security Certificates (the "Definitive Capital Security
Certificates") have been issued to the Capital Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities and the sole holder
of the Global Certificates and shall have no obligation to the Capital Security
Beneficial Owners;
39
(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 Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and DTC
will make book entry transfers among the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Capital Security
Holders is required under this Declaration, unless and until Definitive Capital
Security Certificates shall have been issued to the Capital Security Beneficial
Owners pursuant to Section 9.7, the Regular Trustees shall give all such notices
and communications specified herein to be given to the Capital Security
Holders to the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
SECTION 9.7 Definitive Capital Security Certificates.
----------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Capital Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Capital Securities,
then:
40
(c) Definitive Capital Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Capital Securities;
and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Capital Security Certificates to be delivered to Capital Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency. The
Definitive Capital Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which Capital
Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
41
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 Debenture
Guarantee, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's 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
42
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of Securities
might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Institutional Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of the 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 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
43
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees 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
44
such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4 (a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees 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 (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such Person did not believe to be in or not
opposed to the best interests of the Trust,
45
or, with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or the Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Capital 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 Capital 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
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
46
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 the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any 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 its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional 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 of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
47
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall
be examined by and reported upon as of the end of each Fiscal Year of the Trust
by a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Debentures and the Debenture Guarantee held by the Institutional
Trustee shall be made directly to the Institutional Trustee Account and
48
no other funds of the Trust shall be deposited in the Institutional Trustee
Account. The sole signatories for such accounts shall be designated by the
Regular Trustees; provided, however, that the Institutional Trustee shall
-------- -------
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
Distribution in the amount of the withholding to the Holder. In the event of
any claimed 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 Trust may reduce subsequent Distributions by
the amount of such 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 only be amended by a
written instrument approved and executed by
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, the Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
49
(b) Notwithstanding any other provision of this Article XII, no
amendment shall be made, and any such purported amendment shall be void and
ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received;
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
50
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities.
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of this Declaration to
such extent as may be necessary; provided, however, that no such amendment
-------- -------
shall adversely affect the powers, preferences or special rights of Holders
of Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by
------------------------------------------------
Written Consent.
- ---------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for
51
which the meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities represented by
such Certificates shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
52
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
-----------------------------------------------
Trustee.
- -------
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a New York banking corporation with
trust powers 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 Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with
53
or constitute a breach of the charter or by-laws of the Institutional Trustee;
and
(d) no consent, approval or authorization of, or registration with or
notice to, any New York State or federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware
------------------------------------------
Trustee.
-------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration.
(d) 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.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and
54
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities:
Countrywide Capital I
Countrywide Credit Industries, Inc.
155 North Lake Avenue
Pasadena, CA 91101
Attention:
Telecopy
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
Countrywide Credit Industries, Inc.
155 North Lake Avenue
Pasadena, CA 91101
Attention:
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be
55
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Declaration, the rights of the parties hereunder, and the
Securities 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 the principles of conflict of laws of the State of Delaware or
any other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration any
provision of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate, in a manner inconsistent with the terms
hereof (a) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (b) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees or
other sums payable to trustees, officers, agents or employees of a trust, (e)
the allocation of receipts and expenditures to income or principal, (f)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding or investing trust assets or (g) the establishment of
fiduciary or other standards of responsibility or limitations on the acts or
powers of trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees as set forth or referenced in this
Declaration. Section 3540 of Title 12 of the Delaware Code shall not apply to
the Trust.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
56
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to any of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
57
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
---------------------------------
Eric P. Sieracki,
as Regular Trustee
---------------------------------
Sandor E. Samuels,
as Regular Trustee
---------------------------------
Carlos Garcia, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: _____________________________
Name:
Title
THE BANK OF NEW YORK,
as Institutional Trustee
By: _____________________________
Name:
Title:
COUNTRYWIDE CREDIT INDUSTRIES, INC.,
as Sponsor
By: ______________________________
Name:
Title:
58
EXHIBIT A-1
ANNEX I
TERMS OF
____% CAPITAL TRUST PASS-THROUGH SECURITIES
____% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of December __, 1996 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in the
Declaration or, if not defined in the Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
----------------------
(a) Capital Securities. __________ Capital Securities of the Trust,
------------------
with an aggregate stated liquidation amount with respect to the assets of the
Trust of _____________________ dollars ($___________) and a stated liquidation
amount with respect to the assets of the Trust of $1,000 per Capital Security,
are hereby designated for the purposes of identification only as "____% Capital
Trust Pass-through Securities/sm/ (`TRUPS'/sm/)"* (the "Capital Securities").
The Capital Security Certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Capital Securities are listed.
(b) Common Securities. _______ Common Securities of the Trust, with
-----------------
an aggregate stated liquidation amount with respect to the assets of the Trust
of _____________________________________ dollars ($_________) and a stated
liquidation amount with respect to the assets of the Trust of $1,000 per Common
Security, are hereby designated for the purposes of identification only as
"____% Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
- ----------
* Salomon Brothers Inc has filed applications with the United States Patent
and Trademark Office for the registration of the Capital Trust Pass-through
Securities and TruPS service marks.
I-1
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $1,000
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Except as set forth below in respect of
an Extension Period, Distributions in arrears for more than one semiannual
period will bear interest thereon compounded semiannually at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures and the Debenture Guarantee held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months, and, for any period shorter than a full semiannual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue
from ________ __, 1996, and will be payable semiannually in arrears on June 1
and December 1 of each year, commencing on June 1, 1997, except as otherwise
described below. The Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period at any time
and from time to time on the Debentures for a period not exceeding 10
consecutive semiannual periods (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall be initiated while accrued interest with
- -------- ----
respect to prior, completed Extension Periods is unpaid or while the Company is
in default in the payment of interest that has become due and payable on the
Debentures; and, provided further, that no Extension Period shall extend beyond
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the date of maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 10 consecutive semiannual periods or extend
beyond the maturity of the Debentures. Distributions accrued during any
Extension Period will be paid on the date that the related Extension Period
terminates to Holders as they appear on the books and records of the Trust on
the record date immediately preceding such date.
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Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Capital Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Capital Securities will
be made as described under the heading "Description of the Capital Securities --
Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated ________ __, 1996, to the Prospectus dated _________ __, 1996
(together, the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain other business
trusts. The relevant record dates for the Common Securities shall be the same
record dates as for the Capital Securities. If the Capital Securities shall not
continue to remain in book-entry only form, the relevant record dates for the
Capital Securities shall conform to the rules of any securities exchange on
which the Capital Securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but less than
60 Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. If the Capital
Securities shall not continue to remain in book-entry only form, payments of
Distributions on the Capital Securities shall, subject to the Declaration, be
made by check mailed to the address of the Holder entitled thereto as such
address shall appear on the books and records of the Trust. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer or the Guarantor having failed
to make a payment under the Debentures or the Debenture Guarantee, as the case
may be, when due (taking into account any Extension Period), will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distributions 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), with the same force and effect as if made
on such payment date.
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(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the liquidation, dissolution, winding-up or termination, as the case may
be, will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Securities after paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act (to the extent not paid by the
Debenture Issuer or Guarantor) an amount equal to the aggregate of the stated
liquidation amount of $1,000 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless such liquidation, dissolution, winding-up or termination
occurs in connection with a Tax Event in which, in accordance with Section 4(c),
Debentures in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the Coupon
Rate of, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, such Securities, shall be distributed on a
Pro Rata basis to the Holders of the Securities in exchange for such Securities.
If, upon any such liquidation, dissolution, winding up or termination
the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis, except that if an Event of Default has
occurred and is continuing, the Capital Securities shall have a preference over
the Common Securities with regard to such amounts.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption (either at the option of the Debenture Issuer or
pursuant to a Tax Event as described below), the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed at a redemption price of per Security of $1,000 plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days' notice of such redemption.
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(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be redeemed will be redeemed as described in
Section 4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur and be
continuing the Regular Trustees shall, except in certain limited circumstances
described in this Section 4(c), dissolve the Trust and, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act, cause Debentures held
by the Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment, as the
Securities, to be distributed to the Holders of the Securities together with the
Debenture Guarantee in liquidation of such Holders' interests in the Trust on a
Pro Rata basis, within 90 days following the occurrence of such Tax Event (the
"90 Day Period"); provided, however, that, if at the time there is available to
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the Trust the opportunity to eliminate, within the 90 Day Period, the adverse
effects of the Tax Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, the Debenture Issuer, the Sponsor or
the Holders of the Securities ("Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution.
If, after a Tax Event has occurred, the Debenture Issuer receives an
opinion (a "Redemption Tax Opinion") of a nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debenture Issuer would be precluded
from deducting the interest on the Debentures for United States federal income
tax purposes, even if the Debentures were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c), the Debenture Issuer shall have the right at any time
within 90 days following the occurrence of such Tax Event, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part for
cash so long as such Tax Event is continuing, and, following such redemption,
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
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there is available to the Debenture Issuer or the Trust the opportunity to
eliminate, within the 90 Day Period and before any notice has been given, the
adverse effects of the Tax Event by taking some Ministerial Action, the
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Trust or the Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after the date of
the Prospectus Supplement, as a result of (a) any amendment to, clarification of
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, (b) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action"), or (c) any amendment to,
clarification of, or change in the official position or interpretation of such
Administrative Action or judicial decision that differs from the theretofore
generally accepted position, in each case, by any legislative body, court,
governmental agency or regulatory body, irrespective of the manner in which such
amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such Administrative Action or decision
is announced, in each case, on or after the first date of issuance of the
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debentures, or
subject to more than a de minimis amount of other taxes, duties or other
governmental charges, (ii) any portion of interest payable by the Debenture
Issuer to the Trust on the Debentures is not, or within 90 days of the date
thereof will not be, deductible by the Debenture Issuer for United States
federal income tax purposes, or (iii) the Debenture Issuer could become liable
to pay, on the next date on which any amount would be payable with respect to
the Debentures, any Additional Interest (as defined in the Indenture).
On and from the date fixed by the Regular Trustees for any
distribution of Debentures, together with the Debenture Guarantee, upon
dissolution of the Trust: (i) the Securities will be deemed to be no longer
outstanding, (ii) The Depository Trust Company or its nominee (or any successor
Clearing Agency or its nominee), as the Holder of the Capital Securities, will
receive a registered global certificate or certificates representing the
Debentures and the Debenture Guarantee to be delivered upon such distribution
and (iii) any Certificates representing Securities, except for Certificates
representing Capital Securities held by the Depositary or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to represent
individual beneficial interests in such of the Debentures having an aggregate
principal amount equal to the aggregate stated
I-6
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, such Securities until such Certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all semiannual Distribution periods terminating on or before the date of
redemption.
(e) If the Trust is dissolved and at the time of dissolution the
Capital Securities are rated by at least one "nationally recognized statistical
rating organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act, the Debenture Issuer shall use its best efforts to
obtain from at least one such or other rating organization a rating for the
Debentures.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
such Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of such Securities at the address of each such Holder appearing
on the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing thereof with respect to
any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be redeemed Pro
Rata from each Holder of Capital Securities; provided, however, that, in
respect of Capital Securities registered in the name of and held of record
by the Depositary or its nominee (or any successor Clearing Agency or its
nominee), the Capital Securities shall be redeemed in accordance with the
procedures of the Depositary (which may include redemption by lot), and the
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distribution of the proceeds of such redemption will be made to each
Clearing Agency Participant (or Person on whose behalf such nominee holds
such Securities) in accordance with the procedures applied by such Clearing
Agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) with respect to the Capital Securities, while the
Capital Securities are in book-entry only form, provided that the Debenture
Issuer or the Guarantor has paid the Institutional Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depositary or its nominee (or successor Clearing Agency or its nominee), by
12:00 noon, New York City time, on the redemption date, funds sufficient to
pay the applicable Redemption Price with respect to the Capital Securities
and will give the Depositary irrevocable instructions and authority to pay
the applicable Redemption Price to the Holders of the Capital Securities,
and (B) with respect to Capital Securities issued in definitive form and
Common Securities, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of each such Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the date of
such deposit, or on the redemption date, as applicable, Distributions will
cease to accrue on the Securities so called for redemption and all rights
of Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be
registered the transfer or exchange of any Securities that have been so
called for redemption. If any date fixed for redemption of Securities is
not a Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect
I-8
of any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue at the then applicable rate from the original redemption
date to the actual date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Capital
Securities, the Depositary or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if
Definitive Capital Security Certificates have been issued, to the Holders
thereof, and (B) in respect of the Common Securities, to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided the
acquiror is not the Holder of the Common Securities or the obligor under
the Indenture, the Sponsor or any of its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under Sections 5(b) and 7 of this Annex to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Capital Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in aggregate liquidation amount of the Capital Securities,
voting separately as a class, will have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures and the Debenture Guarantee,
to (i) exercise the remedies available to it under the Indenture as a holder of
the Debentures and the Debenture Guarantee for conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable or (iv) consent on behalf of all the
Holders of the Capital Securities to any amendment, modification or termination
of the Indenture, the
I-9
Debentures or the Debenture Guarantee where such consent shall be required,
provided, however, that, where a consent or action under the Indenture would
- -------- -------
require the consent or act of the holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in aggregate
liquidation amount of the Capital Securities outstanding which the relevant
Super-Majority represents of the aggregate principal amount of the Debentures
outstanding. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote or consent of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
as set forth above, the Institutional Trustee shall not take any action
described in (i), (ii), or (iii) above, unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Debentures after the Holders of a majority of
liquidation amount of the Capital Securities have so directed the Institutional
Trustee, a Holder of Capital Securities may institute a legal proceeding
directly against the Debenture Issuer to enforce the Institutional Trustee's
rights under the Debentures, without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the respective dates such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Capital Securities may directly institute a proceeding against the
Debenture Issuer ("Direct Action") for enforcement of payment, on or after the
respective due dates specified in the Debentures, to such Holder directly of the
principal of or interest on the Debentures having an aggregate principal amount
equal to the aggregate liquidation amount of the Capital Securities of such
Holder. In connection with such Direct Action, the Debenture Issuer shall
remain obligated to pay the principal of or interest on the Debentures held by
the Trust or the Institutional Trustee, and the Debenture Issuer will be
subrogated to the rights of such Holder of Capital Securities under the
Declaration to the extent of any payment made by the Debenture Issuer to such
Holder of Capital Securities in such Direct Action, provided that no Holder of
the Common Securities may exercise any such right of subrogation so long as an
Event of Default with respect to the Capital Securities has occurred and is
continuing. Except as provided in the preceding sentences, the Holders of
Capital Securities will not be able to exercise directly any other remedy
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available to the holders of the Debentures and the Debenture Guarantee.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital 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 Capital 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.
The Regular Trustees will be required to call a meeting of the Holders
of the Capital Securities if directed to do so by Holders of at least 10% in
aggregate liquidation amount thereof.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned at such time by the Sponsor or any Affiliate
of the Sponsor shall not entitle the Holders thereof to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Capital
Securities were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after each
Event of Default (if any) with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
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of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures to (i) exercise the remedies
available under the Indenture, (ii) waive any past default and its consequences
that is waivable under the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable, provided, however, that, where a consent or action under the Indenture
-------- ------- ----
would require a Super Majority, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Notwithstanding this Section 6(c), the Institutional Trustee shall
not revoke any action previously authorized or approved by a vote or consent of
the Holders of the Capital Securities. Other than with respect to directing the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action described in (i), (ii) or (iii)
above, unless the Institutional Trustee has obtained an opinion of tax counsel
to the effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account of such
action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder 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
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Common Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities,
voting together as a single class, will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a Majority in liquidation amount of the
Securities affected thereby; provided, however, that if any amendment or
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proposal referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures and the Debenture Guarantee is required under the
Indenture with respect to any amendment, modification or termination of the
Indenture, the Debentures or the Debenture Guarantee, the Institutional Trustee
shall request the written direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification, or termination as directed by a
Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
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the consent of a Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities outstanding which the relevant Super-
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
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any such action in accordance with the directions of the Holders of the
Securities under this Section 7(b) unless the Institutional Trustee has obtained
an opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action.
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8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
has occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Capital Securities pro rata
according to the aggregate liquidation amount of Capital Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Capital
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Capital Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Capital Securities rank pari passu and payment thereon shall be
---- -----
made Pro Rata with the Common Securities except that, where an Event of Default
has occurred and is continuing, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance of such Securities, agrees to the provisions of the Capital
Securities Guarantee and the Common Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture.
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-14
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Capital Security is exchangeable for Capital Securities registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Capital Security issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Capital Securities
CUSIP NO ___________
Certificate Evidencing Capital Securities
of
COUNTRYWIDE CAPITAL I
____% Capital Trust Pass-through Securities/SM/ ("TRUPS"/SM/)
(liquidation amount $1,000 per Capital Security)
COUNTRYWIDE CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of preferred securities of
the Trust representing undivided beneficial interests in the assets of the
Trust, designated the ____% Capital Trust Pass-through Securities/SM/
(liquidation amount $1,000 per Capital Security) (the "Capital Securities").
The Capital 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,
A1-1
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities represented hereby are issued pursuant to, and shall in
all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of December 1, 1996, including the
designation of the terms of the Capital Securities as set forth in Annex I to
the Declaration, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits
of the Capital Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture to the 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.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Capital Securities as evidence of beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _________, 1996.
COUNTRYWIDE CAPITAL I
By:___________________________
Name:
Title: Regular Trustee
A1-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of ____% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Except as set forth below
in respect of an Extension Period, Distributions in arrears for more than one
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures and the Debenture Guarantee
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full semiannual Distribution period on the basis
of a 360-day year of twelve 30-day months, and, for any period shorter than a
full semiannual Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears on June 1 and December 1 of each
year, commencing on December 1, 1997. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Debentures for a period not
exceeding 10 consecutive semiannual periods (each an "Extension Period"), during
which Extension Period no interest will be due and payable on the Debentures,
provided that no Extension Period shall be initiated while accrued interest with
- -------- ----
respect to prior, completed Extension Periods is unpaid or while the Company is
in default in the payment of interest that has become due and payable on the
Debentures, and provided further, that no Extension Period may extend beyond the
-------- -------
date of the maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semiannual
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semiannually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 10 consecutive semiannual periods or extend
beyond the maturity of the Debentures. Distributions accrued during any
Extension Period will be paid on the date that the related Extension Period
terminates to Holders as they appear on the books and records of the Trust on
the record date immediately
A1-3
preceding such date. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Capital Securities may not be acquired by any Person who is, or who in
acquiring such Capital Securities is using the asset of, an ERISA Plan unless
one of the following class exemptions is applicable: (i) Prohibited Transaction
Class Exemption 90-1 ("PTE 90-1"), regarding investments by insurance company
pooled separate accounts, (ii) Prohibited Transaction Class Exemption 91-38
("PTE 91-38"), regarding investments by bank collective investment funds, (iii)
Prohibited Transaction Class Exemption 84-14 ("PTE 84-14"), regarding
transactions effected by qualified professional asset managers, (iv) Prohibited
Transaction Class Exemption 96-23 ("PTE 96-23"), regarding transactions effected
by in-house asset managers, or (v) Prohibited Transaction Class Exemption 95-60
("PTE 95-60"), regarding investments by insurance company general accounts. The
acceptance of this Certificate by any Person who is, or who in acquiring this
Certificate is using the assets of, an ERISA Plan shall be deemed to constitute
a representation by such Person to the Trust that (i) such Person is eligible
for exemption relief available pursuant to one of PTE 90-1, PTE 91-38, PTE 84-
14, PTE 96-23 or PTE 95-60 with respect to the acquisition and holding of the
Capital Securities represented by this Certificate, and (ii) neither Countrywide
Home Loans, Inc. nor Countrywide Credit Industries, Inc. is a "fiduciary",
within the meaning of Section 3(21) of ERISA and the regulations thereunder,
with respect to such Person's interest in the Capital Securities or the
Debentures.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-4
_________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ___________________________
Signature: _____________________
(Sign exactly as your name appears on the other side of this Capital 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 Security 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 Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A1-5
EXHIBIT A-2
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
COUNTRYWIDE CAPITAL I
_____% Common Securities
(liquidation amount $1,000 per Common Security)
COUNTRYWIDE CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Countrywide
Credit Industries, Inc. (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust, designated the _____% Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the trust, in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of ________ __, 1996, including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the "Declaration"). Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
A2-1
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ______, 1996.
COUNTRYWIDE CAPITAL I
By:___________________________
Name:
Title: Regular Trustee
A2-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of _____% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Except as set forth below
in respect of an Extension Period, Distributions in arrears for more than one
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures and the Debenture Guarantee
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full semiannual Distribution period on the basis
of a 360-day year of twelve 30-day months, and, for any period shorter than a
full semiannual Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears on June 1 and December 1 of each
year, commencing on June 1, 1997, to Holders of record fifteen (15) days prior
to such payment dates, which payment dates shall correspond to the interest
payment dates on the Debentures. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semiannual periods (each an "Extension Period"), provided that no
-------- ----
Extension Period shall be initiated while accrued interest with respect to prior
completed Extension Period is unpaid or while the Company is in default in the
payment of interest that has become due and payable on the Debentures, and
provided further that no Extension Period may extend beyond the date of the
- -------- -------
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, semiannual Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded semiannually during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such Extension
-------- ----
Period together with all such previous and further extensions thereof may not
exceed 10 consecutive semiannual periods or extend beyond the maturity date of
the Debentures. Distributions accruing during any Extension Period will be paid
on the date that the related Extension period terminates to Holders as they
appear on the books and records of
A2-3
the Trust on the record date immediately preceding such date. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-4
______________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
________________________________________________________________________________
________________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: __________________________
Signature: __________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
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 Security 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 Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A2-5
EXHIBIT B
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
(FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of a Depositary or a nominee of a Depositary.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. _________________ CUSIP No. _______________
COUNTRYWIDE HOME LOANS, INC.
______% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE ______
COUNTRYWIDE HOME LOANS, INC., a New York corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ____________ or
registered assigns, the principal sum of ________________ Dollars ($_________ )
on ________ __, 20___, and to pay interest on said principal sum from ________
__, ____, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
semiannually (subject to deferral as set forth herein) in arrears on June 1 and
December 1 of each year commencing June 1, 1997, at the rate of ______% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded
semiannually. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which
B-2
interest is payable on this Debenture is not a Business Day, then payment of
interest 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), with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debenture (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the regular record
date for such interest installment, which shall be the close of business on the
Business Day next preceding such Interest Payment Date. [IF PURSUANT TO THE
PROVISIONS OF THE INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL
Debenture --which shall be the close of business on the ____ Business Day next
preceding such Interest Payment Date.] Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered holders of this series of Debentures not less than 10 days prior to
such special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Company)
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
-------- -------
option of the Company by check mailed to the registered holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so
long as the holder of this Debenture is the Institutional Trustee, the payment
of the principal of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated by the Institutional
Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so
B-3
provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
COUNTRYWIDE HOME LOANS, INC.
By:
________________________
Name:
Title:
Attest:
By: _________________
Name:
Title:
B-4
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated ________________
The Bank of New York,
as Trustee
By____________________
Authorized Signatory
[FORM OF GUARANTEE]
FOR VALUE RECEIVED, COUNTRYWIDE CREDIT INDUSTRIES, INC., a Delaware
corporation (the "Guarantor"), hereby unconditionally guarantees to the holder
of the Security upon which this Guarantee is endorsed the due and punctual
payment of the principal of, sinking fund payment, if any, premium, if any, or
interest on said Security, when and as the same shall become due and payable,
whether at maturity, upon redemption or otherwise, according to the terms
thereof and of the Indenture referred to therein.
The Guarantor agrees to determine, at least one Business Day prior to the
date upon which a payment of principal of, sinking fund payment, if any,
premium, if any, or interest on said Security is due and payable, whether the
Company has available the funds to make such payment as the same shall become
due and payable. In case of the failure of the Company punctually to pay any
such principal, sinking fund payment, if any, premium, if any, or interest, the
Guarantor hereby agrees to cause any such payment to be made punctually when and
as the same shall become due and payable, whether at maturity, upon redemption,
or otherwise, and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Security or said Indenture, the absence of
any action to enforce the same, any waiver or consent by the holder of said
Security with respect to any provisions thereof, the recovery of any judgment
against the Company or any action to enforce the same, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to said Security or
B-5
indebtedness evidenced thereby, and all demands whatsoever and covenants that
this Guarantee will not be discharged except by complete performance of the
obligations contained in said Security and in this Guarantee.
The Guarantor shall be subrogated to all rights of the holder of said
Security against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee; provided, however, that the
Guarantor shall not, without the consent of the holders of all of the Securities
then outstanding, be entitled to enforce or to receive any payments arising out
of or based upon such right of subrogation until the principal of and premium,
if any, and interest on all Securities shall have been paid in full or payment
thereof shall have been provided for in accordance with said Indenture.
Notwithstanding anything to the contrary contained herein, if following any
payment of principal or interest by the Company on the Securities to the holders
of the Securities it is determined by a final decision of a court of competent
jurisdiction that such payment shall be avoided by a trustee in bankruptcy
(including any debtor-in-possession) as a preference under 11 U.S.C. Section 547
and such payment is paid by such holder to such trustee in bankruptcy, then and
to the extent of such repayment, the obligations of the Guarantor hereunder
shall remain in full force and effect.
The obligations of the Guarantor under this Guarantee are, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Guarantee is issued
subject to the provisions of the Indenture with respect thereto.
Each holder of the Security upon which this Guarantee is endorsed, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder of the Security upon which this Guarantee is
endorsed, by his or her acceptance thereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each holder upon said provisions.
This Guarantee shall not be valid or become obligatory for any purpose with
respect to a Security until the certificate of authentication on such Security
shall have been signed by the Trustee (or the Authentication Agent).
B-6
This Guarantee shall be governed by the laws of the State of New York.
B-7
IN WITNESS WHEREOF, COUNTRYWIDE CREDIT INDUSTRIES, INC. has caused this
Guarantee to be signed in its corporate name by the facsimile signature of two
of its officers thereunto duly authorized and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted or otherwise reproduced
hereon.
COUNTRYWIDE CREDIT INDUSTRIES, INC.
______________________________{Seal} _______________________
{Title} {Title}
B-8
(REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debt Securities
of the Company, specified in the Indenture, all issued or to be issued in one or
more series under and pursuant to an Indenture dated as of _________ __, 1996,
duly executed and delivered between the Company and The Bank of New York as
Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of ________ __, 1996, between the Company and the Trustee (the
Indenture as so supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the series of Debt Securities
(referred to herein as the "Debentures") of which this Debenture is a part. By
the terms of the Indenture, the Debt Securities are issuable in series that may
vary as to amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Debentures is limited in aggregate
principal amount as specified in said First Supplemental Indenture.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Debenture may become due and payable at the principal amount
together with any interest accrued thereon (the "Redemption Price"). The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines. The
Company shall have the right to redeem this Debenture at the option of the
Company, without premium or penalty, in whole or in part at any time on or after
December 1, 2006 (an "Optional Redemption"), or at any time in certain
circumstances upon the occurrence of a Tax Event, at a redemption price equal to
100% of the principal amount plus any accrued but unpaid interest, to the date
of such redemption (the "Optional Redemption Price"). Any redemption pursuant
to this paragraph will be made upon not less than 30 days nor more than 60 days
notice, at the Optional Redemption Price. If the Debentures are only partially
redeemed by the Company pursuant to an Optional Redemption, the Debentures will
be redeemed pro rata or by lot or by any other method utilized by the Trustee;
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provided that if, at the time of redemption, the Debentures are registered as a
Global Debenture, the Depositary shall determine the principal amount of such
Debentures held by each Debentureholder to be redeemed in accordance with its
procedures.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
B-9
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected at the
time outstanding, as specified in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental indenture shall (i),
among other things, extend the fixed maturity of any Debt Securities of any
series, or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Debt Security so
affected, or (ii) reduce the aforesaid percentage of Debt Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debt Securities then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debt Securities of any series
at the time outstanding affected thereby, on behalf of all of the holders of the
Debt Securities of such series, to waive any past default in the performance of
any of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debt Securities of such series. Any such consent or waiver by the registered
holder of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and of any Debenture issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Debentures and from time to time to defer payments of
B-10
interest on the Debentures by extending the interest payment period of the
Debentures for up to 10 consecutive semiannual periods (each, an "Extended
Interest Payment Period"), and on the date on which such Extended Interest
Payment Period ends the Company shall pay all interest then accrued and unpaid
(including any Additional Interest), (together with interest thereon at the rate
specified for the Debentures compounded semiannually to the extent that payment
of such interest is enforceable under applicable law); provided that no Extended
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Interest Payment Period may be initiated while accrued interest with respect to
prior, completed Extended Interest Payment Periods is unpaid or while the
Company is in default in the payment of interest that has become due and payable
on the Debentures, and provided further that no Extended Interest Payment Period
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may last beyond the Maturity Date. Before the termination of any such Extended
Interest Payment Period, the Company may further extend such Extended Interest
Payment Period, provided that each such Extended Interest Payment Period
together with all such previous and further extensions thereof shall not exceed
10 consecutive semiannual periods or extend beyond the Maturity Date. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period, subject to the above
requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Trustee in the City
and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
registrar shall be affected by any notice to the contrary.
B-11
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[The Debentures of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.]
[This Global Debenture is exchangeable for Debentures in definitive form only
under certain limited circumstances set forth in the Indenture. Debentures of
this series so issued are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations [herein and] therein set forth,
Debentures of this series [so issued] are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same. All terms used
in this Debenture that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
B-12
EXHIBIT C