EXHIBIT 4.36
EXECUTION COPY
AMENDED AND RESTATED DECLARATION
OF TRUST
COUNTRYWIDE CAPITAL I
Dated as of December 16, 1996
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act 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)
- ---------------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
COUNTRYWIDE CAPITAL I
December 16, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of December 16, 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 14, 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.
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ARTICLE I.
NTERPRETATION AND DEFINITIONS
Section 1.01. Definitions.
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 the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means, with respect to any series of
Securities, any 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.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
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"Capital Securities Guarantee" means the guarantee agreement
to be dated as of December 16, 1996, of the Sponsor in respect of the Capital
Securities.
"Capital Security" or "Capital Securities" has the meaning
specified 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 Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a
Capital Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the 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 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
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission or a
successor federal agency performing comparable functions.
"Common Securities Guarantee" means the guarantee agreement to
be dated as of December 16, 1996 of the Sponsor in respect of the Common
Securities.
"Common Security" or "Common Securities" has the meaning
specified in Section 7.1(a).
"Common Security Certificate" means a definitive certificate
in fully registered form representing one or more Common Securities
substantially in the form of Exhibit A-2.
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"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, Floor 21
West, New York, New York 10286.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Guarantee" means the guarantee by the Sponsor of
the Debentures endorsed thereon.
"Debenture Issuer" means Countrywide Home Loans, Inc., a New
York corporation, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means The Bank of New York, a New York
banking 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 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.
"Definitive Capital Security Certificates" has the meaning set
forth in Section 9.4.
(g) "Depositary" means, with respect to the Capital
Securities, DTC, or another Clearing Agency.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, New York, New York,
the initial Clearing Agency.
"Event of Default" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Plan" means an employee benefit plan subject to ERISA
or an individual retirement account or plan subject to Section 4975 of the Code.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Guarantor" has the meaning set forth in the Indenture.
"Holder" means a Person in whose name a Certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of December 16, 1996,
among 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 the Indenture.
"Institutional Trustee" means the Trustee meeting the
eligibility 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 3.8(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as 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,
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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 Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
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:
(h) a statement that each officer signing the Certificate
has read the condition or covenant and the definitions relating thereto;
(i) a brief statement of the nature and scope of the
examination or investigation undertaken by each such officer in rendering the
Certificate;
(j) 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
(k) 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 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.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pricing Agreement" means the pricing agreement between
the Trust, the 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 only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section
5.1.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
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"Responsible Officer" means, with respect to the Institutional
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.
"Securities" means the Common Securities and the Capital
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee
and the Capital Securities Guarantee.
"Sponsor" means Countrywide Credit Industries, Inc., a
Delaware corporation, or any successor entity in a merger, consolidation or
amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(b).
"Successor Entity" has the meaning set forth in Section
3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.7(b).
"Successor Securities" has the meaning set forth in Section
3.15(b).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the 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 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).
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"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Capital Securities substantially in the form of Exhibit
C.
ARTICLE II.
TRUST INDENTURE ACT
Section 2.01. 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 Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide the Institutional Trustee (i) within 14 days
after each record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, 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
10
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 Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Institutional Trustee.
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 Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
Section 2.04. 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 ss. 314 of the
Trust Indenture Act in the form, in the manner and at the times required by ss.
314 of the Trust Indenture Act.
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of compliance
with all covenants and conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in ss. 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
Section 2.06. Events of Default; Waiver.
(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 Event of Default:
(i) is not waivable under the
Indenture, the Event of Default under this Declaration shall
also not be waivable; or
(i) 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.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a) (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 Event of Default:
(i) is not waivable under the
Indenture, the Event of Default under this Declaration shall
also not be waivable; or
(i) 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
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 Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted 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.
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(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
Section 316(a)(1)(B) of the Trust Indenture Act and Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.07. 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
(i) any default as to which the Institutional
Trustee shall have received written notice or of which a Responsible Officer of
the Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III.
ORGANIZATION
Section 3.01. Name.
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.
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Section 3.02. Office.
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 3.03. Purpose.
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 3.04. Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
Section 3.05. 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 3.06. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
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(a) to issue and sell the Capital Securities and the
Common Securities (in each case at such price (whether such price represents a
discount or premium or otherwise) as shall be determined by the Regular
Trustees) in accordance with this Declaration; provided, however, that the Trust
may 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
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 and to the extent applicable, 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;
(i) 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;
(ii) 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 Stock Market's National Market for listing
upon notice of issuance of any Capital Securities;
(iii) 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
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Section 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;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(i) to give the certificate required by Section
314(a)(4) of the Trust Indenture Act to the Institutional Trustee, which
certificate may be executed by any Regular Trustee;
(j) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(k) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(l) to give prompt written notice to the Holders of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Indenture;
(m) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory 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 Holders of
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(n) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed
to be an Investment Company required to be registered under
the Investment Company Act;
16
(i) causing the Trust to be classified for
United States federal income tax purposes as a grantor trust; and
(ii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
(o) to take all action necessary to cause all applicable
tax returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
(p) 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
(q) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
The Regular Trustees 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 3.07. 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,
17
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;
(i) acquire any assets other than as expressly
provided herein;
(ii) possess Trust property for other than a
Trust purpose;
(iii) 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;
(iv) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other than the
Securities; or
(v) 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 3.08. 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 Guarantee to the
Regular Trustees or to the Delaware Trustee (if the Institutional Trustee does
not also act as Delaware Trustee).
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(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;
(i) 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
(ii) 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 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
19
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
(i) 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 Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time
and a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional
Trustee shall have none of the duties, liabilities, powers
or the authority of the Regular Trustees set forth in
Section 3.6.
The Institutional Trustee 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 3.09. 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
20
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 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;
(i) 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;
(ii) 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;
(iii) 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;
21
(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;
(iv) 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;
(v) 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
(vi) 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;
(i) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be sufficiently
evidenced by an Officers' Certificate;
(ii) 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;
(iii) 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;
22
(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 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;
(iv) 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;
(v) 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;
(vi) 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;
(vii) any action taken by the Institutional
Trustee or its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its agents alone
shall be sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional Trustee to
so act or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Institutional
Trustee's or its 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
23
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;
(viii) 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
(ix) 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 purpose of fulfilling the
requirements of Section 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 fifty-four (54) years from
December 31, 1996.
24
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
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;
(i) 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;
(ii) 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;
(iii) 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);
(iv) such Successor Entity has a purpose
identical to that of the Trust;
25
(v) 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);
(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
(vi) 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 4.01. 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 4.02. 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;
26
(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 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 necessary or deemed 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) or 12(g) 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 5.01. 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 5.02. Delaware Trustee.
27
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which maintains
its principal place of business in the State of Delaware, and otherwise meets
the requirements of applicable law.
ARTICLE VI. 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
(i) 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 ss. 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 ss. 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of ss. 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
proviso contained in Section 310(b)(1) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
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The Bank of New York.
Section 6.02. 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 6.03. 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 6.04. Initial Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware).
ARTICLE VII. 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:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(i) 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.
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(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
(i) 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.
(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.
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(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 7.02. 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 7.03. 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 7.04. Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Regular Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees. In the event
there is only one Regular Trustee, any and all action of such Regular Trustee
shall be evidenced by a written consent of such Regular Trustee.
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Section 7.05. 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 7.06. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be a party, or any corporation succeeding to
all or substantially all the corporate trust business of the Institutional
Trustee or the Delaware Trustee, as the case may be, shall be the successor of
the Institutional Trustee or the Delaware Trustee, as the case may be,
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
ARTICLE VIII.
DISTRIBUTIONS
Section 8.01. 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.
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ARTICLE IX.
SSUANCE OF SECURITIES
Section 9.01. 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 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 9.02. 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
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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 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 X.
DISSOLUTION AND TERMINATION OF TRUST
Section 10.01. Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) on December 31, 2050, the expiration of the term
of the Trust;
(i) upon the bankruptcy of the Sponsor or the
Debenture Issuer;
(ii) (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;
(iii) 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;
(iv) 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
(v) before the issuance of any Securities, with
the consent of all of the Regular Trustees and the Sponsor.
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(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 XI.
TRANSFER OF INTERESTS
Section 11.01. 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.
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Section 11.02. 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 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 11.03. 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 11.04. 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
36
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the 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 11.05. 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 11.06. 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 11.07. 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:
(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
37
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 11.08. 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.
ARTICLE XII.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 12.01. 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:
38
(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
(i) required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable
for all of the debts and obligations of the Trust (other than with respect to
the Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the 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 12.02. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be paid.
Section 12.03. 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.
39
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(i) 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
(i) 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 12.04. 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
40
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter as
to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (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
41
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Common Security Holder
at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or the Common
Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or
Capital Security Holders.
(v) 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.
(vi) 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).
(vii) 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.
(viii) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a Person who has
ceased to be a Company Indemnified Person and shall inure to the benefit of the
heirs, executors and administrators of such a Person.
42
(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 12.05. 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.
ARTICLE XIII.
ACCOUNTING
Section 13.01. 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 13.02. Certain Accounting Matters.
43
(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 13.03. 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 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 13.04. 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
44
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 XIV.
AMENDMENTS AND MEETINGS
Section 14.01. 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);
(i) if the amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(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);
(i) 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
45
(ii) 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) (c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities.
(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;
(i) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other provision of
this Declaration;
(ii) add to the covenants, restrictions or
obligations of the Sponsor;
(iii) 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 14.02. Meetings of the Holders of Securities; Action by Written
Consent.
46
(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 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;
(i) 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;
47
(ii) 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
(iii) 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 XV.
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
Section 15.01. 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 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.
48
Section 15.02. 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 XVI.
MISCELLANEOUS
Section 16.01. Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by 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
49
Attention: Sandor E. Samuels
Telecopy: (818) 584-2397
(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: Corporate Secretary
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 16.02. 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
50
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 16.03. 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 16.04. 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 16.05. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
Section 16.06. 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 16.07. 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
51
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
52
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
/s/ Eric P. Sieracki
----------------------
Eric P. Sieracki,
as Regular Trustee
/s/ Sandor E. Samuels
----------------------
Sandor E. Samuels,
as Regular Trustee
/s/ Carlos Garcia
-----------------------------------
Carlos Garcia, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Joseph G. Ernst
-----------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Institutional Trustee
By: /s/ Vivian Georges
-----------------------------------
Name: Vivian Georges
Title: Assistant Vice President
COUNTRYWIDE CREDIT INDUSTRIES, INC.,
as Sponsor
By: /s/ Stanford L. Kurland
-----------------------------------
Name: Stanford L. Kurland
Title: Senior Managing Director
53
ANNEX-I
54
ANNEX I
TERMS OF
8% CAPITAL TRUST PASS-THROUGH SECURITIES
8% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of December 16, 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. 300,000 Capital Securities of the
Trust, with an aggregate stated liquidation amount with respect to the assets of
the Trust of three hundred million dollars ($300,000,000) 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 "8%
Capital Trust Pass-through Securities4 (`TRUPS'4)"* (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. 9,279 Common Securities of the
Trust, with an aggregate stated liquidation amount with respect to the assets of
the Trust of nine million two hundred and seventy nine thousand dollars
($9,279,000) 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 "8% Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions.
(c) Distributions payable on each Security will be fixed
at a rate per annum of 8% (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
- ----------------------
* 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.
55
the extent permitted by applicable law). The term "Distributions" as used herein
includes any such compounded distributions 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.
(d) Distributions on the Securities will be cumulative,
will accrue from December 16, 1996, and will be payable semiannually in arrears
on June 15 and December 15 of each year, commencing on June 15, 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
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. 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.
(e) 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 December 11, 1996, to the Prospectus dated
December 10, 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,
56
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 more than
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.
(f) 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
57
occurred and is continuing, the Capital Securities shall have a preference over
the Common Securities with regard to such amounts.
4. Redemption and Distribution.
(g) 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.
(h) 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.
(i) 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 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
58
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
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 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 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.
59
(j) 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.
(k) 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.
(l) 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.
(i) 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
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.
(ii) 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
60
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 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.
(iii) 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.
(m) 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.
61
(n) 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 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. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to (a) 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) or (b) the failure of the Guarantor to
pay any obligation in respect thereof under the Debenture Guarantee, 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
62
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 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.
(o) 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.
(p) 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.
(q) 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 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
63
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 Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(r) 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
64
the Securities affected thereby; provided, however, that if any amendment or
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.
(s) 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
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
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.
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.
65
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.
66
EXHIBIT A-1
67
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 222371AA4
Certificate Evidencing Capital Securities
of
COUNTRYWIDE CAPITAL I
8% Capital Trust Pass-through Securities
(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 Cede &
Co. (the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated the 8% Capital Trust Pass-through Securities (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, 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 16, 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
68
"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 16th day of December, 1996.
COUNTRYWIDE CAPITAL I
By:_____________________________________
Name:
Title: Regular Trustee
69
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 8% (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 15 and December 15
of each year, commencing on June 15, 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 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
70
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 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 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.
71
_________________________
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.
72
EXHIBIT A-2
73
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
COUNTRYWIDE CAPITAL I
8% 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 8% 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 December 16, 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.
74
IN WITNESS WHEREOF, the Trust has executed this certificate
this 16th day of December, 1996.
COUNTRYWIDE CAPITAL I
By:________________________________
Name:
Title: Regular Trustee
75
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 8% (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 15 and December 15
of each year, commencing on June 15, 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 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.
76
______________________
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.
77
EXHIBIT B
78
EXHIBIT B
SPECIMEN OF DEBENTURE
79
(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.
8% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE DECEMBER 15, 2026
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 December 15, 2026, and to pay interest on said
principal sum from December 16, 1996, 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 15 and December 15 of each year commencing June 15,
1997, at the rate of 8% 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 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
80
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 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.
81
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
COUNTRYWIDE HOME LOANS, INC.
By: ______________________________
Name:
Title:
Attest:
By: ___________________
Name:
Title:
82
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 fully and 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 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.
83
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).
This Guarantee shall be governed by the laws of the State of New York.
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} _______________________
84
{Title} {Title}
85
(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
December 16, 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 December 16, 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.
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 and from time to time on or after December 15, 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 to be
redeemed 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; 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.
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
86
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 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, compounded semiannually at the rate
specified for the Debentures to the extent that payment of such interest is
enforceable under applicable law; provided that no Extended 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 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
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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 and 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.
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.
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EXHIBIT C
89