EXHIBIT 4.3
Composite Conformed Copy
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AMENDED AND RESTATED DECLARATION OF TRUST
First American Capital Trust I
Dated as of April 22, 1997
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TABLE OF CONTENTS
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ARTICLE 1
INTERPRETATION AND DEFINITIONS.......................... 1
Section 1.1 Interpretation and Definitions................................ 1
Affiliate.......................................................... 2
Authorized Officer................................................. 2
Bankruptcy Event................................................... 2
Business Day....................................................... 3
Business Trust Act................................................. 3
Capital Security................................................... 3
Capital Securities Beneficial Owner................................ 3
Capital Securities Certificate..................................... 3
Certificate........................................................ 3
Certificate of Trust............................................... 3
Closing Date....................................................... 3
Code............................................................... 3
Commission......................................................... 4
Common Securities Holder........................................... 4
Common Security.................................................... 4
Common Security Certificate........................................ 4
Capital Securities................................................. 4
Distribution Date.................................................. 4
Corporate Trust Office............................................. 4
Covered Person..................................................... 4
Debenture Issuer................................................... 4
Debenture Issuer Indemnified Person................................ 4
Debenture Trustee.................................................. 4
Debentures......................................................... 4
Delaware Trustee................................................... 5
Depositary......................................................... 5
Distribution....................................................... 5
DTC................................................................ 5
Exchange Act....................................................... 5
Exchange Offer..................................................... 5
Fiduciary Indemnified Person....................................... 5
Fiscal Year........................................................ 5
Global Security.................................................... 5
Guarantee.......................................................... 5
Holder............................................................. 5
Indemnified Person................................................. 5
Indenture.......................................................... 5
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Indenture Event of Default....................................... 5
Initial Purchasers............................................... 6
Institutional Accredited Investor................................ 6
Investment Company............................................... 6
Investment Company Act........................................... 6
Investment Company Event......................................... 6
Legal Action..................................................... 6
Liquidation Date................................................. 6
List of Holders.................................................. 6
Majority in Liquidation Amount................................... 6
New Capital Securities........................................... 6
Officers' Certificate............................................ 6
Paying Agent..................................................... 7
Payment Amount................................................... 7
Person........................................................... 7
Private Placement Legend......................................... 7
Property Account................................................. 7
Property Trustee................................................. 7
Pro Rata......................................................... 7
Qualified Institutional Buyer.................................... 7
Quorum........................................................... 7
Redemption Price................................................. 7
Registration Rights Agreement.................................... 7
Regular Trustee.................................................. 8
Regulation S..................................................... 8
Related Party.................................................... 8
Responsible Officer.............................................. 8
Capital Securities............................................... 8
Restricted Global Security....................................... 8
Restricted Security.............................................. 8
Rule 144A........................................................ 8
Securities....................................................... 8
Securities Act................................................... 8
Security Register................................................ 8
Security Registrar............................................... 8
Special Event.................................................... 8
Sponsor.......................................................... 8
Successor Delaware Trustee....................................... 8
Successor Entity................................................. 9
Successor Property Trustee....................................... 9
Successor Securities............................................. 9
Super Majority................................................... 9
Tax Event........................................................ 9
10% in Liquidation Amount........................................ 9
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Transfer Restricted Securities................................... 9
Treasury Regulations............................................. 9
Trust Enforcement Event.......................................... 9
Trust Indenture Act.............................................. 9
Trustee" or "Trustees............................................ 10
Trustees' Authorization Certificate.............................. 10
ARTICLE 2
TRUST INDENTURE ACT........................... 10
Section 2.1 Trust Indenture Act; Application......................... 10
Section 2.2 Lists of Holders of Securities........................... 10
Section 2.3 Reports by the Property Trustee.......................... 11
Section 2.4 Periodic Reports to the Property Trustee................. 11
Section 2.5 Evidence of Compliance with Conditions Precedent......... 11
Section 2.6 Trust Enforcement Events; Waiver......................... 11
Section 2.7 Trust Enforcement Event; Notice.......................... 13
ARTICLE 3
ORGANIZATION............................... 14
Section 3.1 Name and Organization.................................... 14
Section 3.2 Office................................................... 14
Section 3.3 Purpose.................................................. 14
Section 3.4 Authority................................................ 14
Section 3.5 Title to Property of the Trust........................... 15
Section 3.6 Powers and Duties of the Regular Trustees................ 15
Section 3.7 Prohibition of Actions by the Trust and the Trustees..... 18
Section 3.8 Powers and Duties of the Property Trustee................ 19
Section 3.9 Certain Duties and Responsibilities of the Property
Trustee.................................................. 21
Section 3.10 Certain Rights of Property Trustee....................... 23
Section 3.11 Delaware Trustee......................................... 25
Section 3.12 Execution of Documents................................... 25
Section 3.13 Not Responsible for Recitals or Issuance of Securities... 26
Section 3.14 Duration of Trust........................................ 26
Section 3.15 Mergers.................................................. 26
Section 3.16 Property Trustee May File Proofs of Claim................ 28
ARTICLE 4
SPONSOR................................. 28
Section 4.1 Responsibilities of the Sponsor.......................... 28
Section 4.2 Indemnification and Expenses of the Trustee.............. 29
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ARTICLE 5
TRUST COMMON SECURITIES HOLDER..................... 29
Section 5.1 Debenture Issuer's Purchase of Common Securities........ 29
Section 5.2 Covenants of the Common Securities Holder............... 30
ARTICLE 6
TRUSTEES................................. 30
Section 6.1 Number of Trustees...................................... 30
Section 6.2 Delaware Trustee........................................ 30
Section 6.3 Property Trustee; Eligibility........................... 31
Section 6.4 Certain Qualifications of Regular Trustees
and Delaware Trustee Generally.......................... 32
Section 6.5 Initial Trustees........................................ 32
Section 6.6 Appointment, Removal and Resignation of Trustees........ 32
Section 6.7 Vacancies among Trustees................................ 33
Section 6.8 Effect of Vacancies..................................... 34
Section 6.9 Meetings................................................ 34
Section 6.10 Delegation of Power..................................... 34
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business................................................ 35
ARTICLE 7
THE SECURITIES.............................. 35
Section 7.1 General Provisions Regarding Securities.................. 35
Section 7.2 Distributions............................................ 37
Section 7.3 Redemption of Securities................................. 38
Section 7.4 Redemption Procedures.................................... 38
Section 7.5 Voting Rights of Capital Securities...................... 40
Section 7.6 Voting Rights of Common Securities....................... 42
Section 7.7 Paying Agent............................................. 43
Section 7.8 Transfer of Securities................................... 44
Section 7.9 Mutilated, Destroyed, Lost or Stolen Certificates........ 45
Section 7.10 Deemed Security Holders.................................. 45
Section 7.11 Form and Dating.......................................... 46
Section 7.12 Transfer Procedures and Restrictions..................... 47
Section 7.13 CUSIP Numbers............................................ 54
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST................... 55
Section 8.1 Terminating Events....................................... 55
Section 8.2 Termination.............................................. 55
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Section 8.3 Liquidation............................................. 55
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS............ 57
Section 9.1 Liability............................................... 57
Section 9.2 Exculpation............................................. 57
Section 9.3 Fiduciary Duty.......................................... 58
Section 9.4 Indemnification......................................... 59
Section 9.5 Outside Businesses...................................... 61
ARTICLE 10
ACCOUNTING.............................. 61
Section 10.1 Fiscal Year............................................ 61
Section 10.2 Certain Accounting Matters............................. 62
Section 10.3 Banking................................................ 62
Section 10.4 Withholding............................................ 62
ARTICLE 11
AMENDMENTS AND MEETINGS........................ 63
Section 11.1 Amendments............................................. 63
Section 11.2 Meetings of the Holders of Securities; Action by
Written Consent........................................ 65
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE.......................... 66
Section 12.1 Representations and Warranties of the Property Trustee. 66
Section 12.2 Representations and Warranties of the Delaware Trustee. 67
ARTICLE 13
MISCELLANEOUS............................. 68
Section 13.1 Notices................................................ 68
Section 13.2 Governing Law.......................................... 69
Section 13.3 Intention of the Parties............................... 69
Section 13.4 Headings............................................... 69
Section 13.5 Successors and Assigns................................. 69
Section 13.6 Partial Enforceability................................. 69
Section 13.7 Counterparts........................................... 70
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EXHIBITS
Exhibit A Capital Security Certificate
Exhibit B Common Security Certificate
Exhibit C Trustee's Authorization Certificate
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AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated as of
April 22, 1997 among The First American Financial Corporation, a California
corporation, as Sponsor, and Thomas A. Klemens and Parker S. Kennedy, the
initial Regular Trustees, Wilmington Trust Company, as the initial Property
Trustee and Wilmington Trust Company, as the initial Delaware Trustee, not in
their individual capacities but solely as Trustees, and the holders, from time
to time, of undivided beneficial ownership interests in the assets of Trust to
be issued pursuant to this Declaration.
WHEREAS, the Delaware Trustee, Thomas A. Klemens and the Sponsor
established First American Capital Trust I (the "Trust"), a business trust under
the Business Trust Act pursuant to a Declaration of Trust dated as of April 11,
1997 (the "Original Declaration") and a Certificate of Trust (the "Certificate
of Trust") filed with the Secretary of State of the State of Delaware on April
11, 1997; and
WHEREAS, the sole purpose of the Trust shall be to issue and sell certain
securities representing undivided beneficial ownership interests in the assets
of the Trust, to invest the gross proceeds from such sales in the Debentures
issued by the Debenture Issuer and to engage in only those activities necessary
or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of the Trust, the Trustees
hereby declare that all assets contributed to the Trust be held in trust for the
benefit of the Holders, from time to time, of the Securities representing
undivided beneficial ownership interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I.
INTERPRETATION AND DEFINITIONS
Section A. Interpretation and Definitions.
Unless the context otherwise requires:
1. capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
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2. a term defined anywhere in this Declaration has the same meaning
throughout;
3. all references to "this Declaration" are to this Declaration as
modified, supplemented or amended from time to time;
4. all references in this Declaration to Articles, Sections and
Exhibits are to Articles, Sections and Exhibits of this Declaration unless
otherwise specified;
5. 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;
6. a reference to the singular includes the plural and vice versa and
a reference to any gender form of a term shall include the other form of a
term, as applicable;
7. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles which are generally accepted at the date or time of
such computation; provided, that when two or more principles are so
generally accepted, it shall mean that set of principles consistent with
those in use by the applicable Person;
8. the words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation"; and
9. the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is expressly
authorized by such Person to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee,
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trustee, sequestrator (or other similar official) of such Person or of any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Business Day" means any day other than a Saturday or a Sunday or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Property Trustee, or the corporate trust office of
the Debenture Trustee, under the Indenture, is closed for business.
"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.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Beneficial Owner" means each Person who is the
beneficial owner of an interest in a Global Security as reflected in the records
of the Depositary or, if a Depositary participant is not the beneficial owner,
then as reflected in the records of a Person maintaining an account with the
Depositary (directly or indirectly, in accordance with the rules of the
Depositary).
"Capital Security Certificate" means a certificate evidencing
ownership of a Capital Security, substantially in the form attached as Exhibit
A.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Certificate of Trust" has the meaning specified in the recitals
hereto.
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"Closing Date" means the date on which the Capital Securities are
issued and sold.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Holder" means The First American Financial
Corporation in its capacity as purchaser and holder of all of the Common
Securities issued by the Trust.
"Common Security" has the meaning specified in Section 7.1
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security, substantially in the form
attached as Exhibit B.
"Compounded Distribution" has the meaning specified in Section 7.2(a).
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at Rodney Square North, 1100 North
Market Street, Wilmington, DE 19890-0001 Attention: Corporate Trust
Administration.
"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.
"Debenture Issuer" means The First American Financial Corporation in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees or agents of any Regular Trustee or
any Affiliate thereof; or (d) any officer, employee or agent of the Trust or its
Affiliates.
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"Debenture Trustee" means Wilmington Trust Company, in its capacity as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the Securities (as defined in the Indenture) to be
issued by the Debenture Issuer and to be held by the Property Trustee.
"Definitive Capital Securities" has the meaning specified in Section
7.11(c).
"Delaware Trustee" has the meaning set forth in Section 6.2.
"Depositary" means, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such
Securities.
"Distribution" means a distribution payable to Holders in accordance
with Section 7.2.
"Distribution Date" means the date on which Distributions are made to
Holders in accordance with Section 7.2.
"DTC" means The Depository Trust Company, the initial Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Exchange Agent" has the meaning specified in Section 7.7.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement.
"Fiduciary Indemnified Person" has the meaning set forth in Section
9.4(b).
"Fiscal Year" has the meaning set forth in Section 10.1.
"Global Security" means a Security, ownership and transfers of which
shall be made through book entries by the Depositary as described in Section
7.11.
"Guarantee" means the guarantee agreement of the Sponsor in respect of
the Capital Securities and the Common Securities.
"Holder" means a Person in whose name a Certificate is registered,
such Person being a beneficial owner within the meaning of the Business Trust
Act; provided, however, that in determining whether the Holders of the requisite
liquidation amount of Capital
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Securities have voted on any matter provided for in this Declaration, then for
the purpose of such determination only (and not for any other purpose
hereunder), if the Capital Securities remain in the form of one or more Global
Securities, the term "Holders" shall mean the holder of the Global Security
acting at the direction of the Capital Security Beneficial Owners.
"Indemnified Person" means a Debenture Issuer Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Junior Subordinated Indenture dated as of April
22, 1997, among the Debenture Issuer and the Debenture Trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"Indenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Initial Purchasers" means Chase Securities Inc. and UBS Securities
LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Investment Company" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of an
opinion of counsel, rendered by a law firm having a recognized national
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
Investment Company, which Change in 1940 Act Law becomes effective on or after
the date of original issuance of the Capital Securities.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation Date" has the meaning specified in Section 8.3(a).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" 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
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the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"New Capital Securities" has the meaning specified in Section 7.1.
"Officers' Certificate" means, with respect to any Person (other than
Regular Trustees who are natural persons), a certificate signed by any
Authorized Officer of such Person on behalf of such Person. Any Officers'
Certificate delivered by the Trust shall be signed by at least one Regular
Trustee. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer and
on behalf of such Person, such condition or covenant has been complied
with.
The term "Officers' Certificate", when used with reference to Regular
Trustees who are natural persons shall mean a certificate signed by two of the
Regular Trustees which otherwise satisfies the foregoing requirements.
"Paying Agent" has the meaning specified in Section 7.7.
"Payment Amount" has the meaning specified in Section 7.2(a).
"Person" or "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.
"Private Placement Legend" has the meaning specified in Section
7.12(i).
"Property Account" has the meaning specified in Section 3.8(c).
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"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Price" has the meaning specified in Section 7.3.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date hereof between the Sponsor, the Trust and the Initial
Purchasers for the benefit of themselves and the Holders as the same may be
amended from time to time in accordance with the terms thereof.
"Regular Trustee" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"Regulation S" means Regulation S under the Securities Act or any
successor regulation thereto.
"Related Party" means, with respect to the Sponsor, any direct or
wholly owned subsidiary of the Sponsor or any Person that owns, directly or
indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee with direct
responsibility for the administration of this Declaration and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Restricted Definitive Capital Securities" has the meaning specified
in Section 7.11(c).
"Restricted Global Security" means any Global Security or Global
Securities evidencing Securities that are to be traded pursuant to Rule 144A.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) of the Securities Act.
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"Rule 144A" means Rule 144A under the Securities Act or any successor
rule thereunder.
"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 Register" has the meaning specified in Section 7.7.
"Security Registrar and Securities Registrar" each has the meaning
specified in Section 7.7.
"Special Event" means an Investment Company Event or a Tax Event.
"Sponsor" means The First American Financial Corporation, a California
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 specified in Section
6.6(b).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section
6.6(b).
"Successor Securities" has the meaning specified in Section
3.15(b)(i)b.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" means the receipt by the Sponsor of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the Closing Date,
there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to the United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by the Debenture Issuer on the Debentures is not, or within 90
days of the date of such opinion, will not be deductible by the Debenture
Issuer, in whole or in part, for United States federal income tax purposes, or
(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
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"10% in Liquidation Amount" 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 (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Transfer Restricted Securities" has the meaning specified in Section
7.1.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"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.
"Trustees' Authentication Order" means a written certificate, in the
form attached as Exhibit C hereto, signed by the Sponsor for the purpose of
establishing the terms and form of the Capital Securities and the Common
Securities as determined by the Regular Trustees.
ARTICLE II.
TRUST INDENTURE ACT
Section A. Trust Indenture Act; Application.
1. At such time, if any, as this Declaration is qualified under the
Trust Indenture Act, this Declaration will be 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.
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2. The Property Trustee shall be the only Trustee, which, at such
time, if any, as this Declaration is qualified under the Trust Indenture Act, is
the "Trustee" for the purposes of the Trust Indenture Act.
3. At such time, if any, as this Declaration is qualified under the
Trust Indenture Act, if and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
4. The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
Federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial ownership interests in the
assets of the Trust.
Section B. Lists of Holders of Securities.
1. Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee with a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders"), (i) semi-annually, not more than
15 days after January 15 and July 15 in each year and as of January 1 and July 1
and (ii) at any other time, within 30 days of receipt by the Trust of a written
request from the Property Trustee for a List of Holders as of a date no more
than 15 days before such List of Holders is given to the Property Trustee;
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
Property Trustee by the Sponsor and the Regular Trustees on behalf of the Trust.
The Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
2. The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section C. Reports by the Property Trustee.
Within 60 days after May 15 of each year (commencing in the year of
the first anniversary of the issuance of the Capital Securities), the Property
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 Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section D. Periodic Reports to the Property Trustee.
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Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
are required by Section 314 of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section E. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
Section F. Trust Enforcement Events; Waiver.
1. The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote or written consent, on behalf of the Holders of all of
the Capital Securities, waive any past Trust Enforcement Event in respect of the
Capital Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
a. is not waivable under the Indenture, the Trust Enforcement
Event under this Declaration shall also not be waivable; or
b. 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, the Trust Enforcement Event under this
Declaration may only be waived by the vote or written consent of the
Holders of at least the proportion in aggregate liquidation amount of the
Capital Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
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 default shall cease to exist, and any Trust Enforcement Event with respect
to the Capital Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration and the Capital Securities, but no such
waiver shall extend to any subsequent or other Trust Enforcement Event with
respect to the Capital Securities or impair any right consequent thereon. Any
waiver by the Holders of the Capital Securities of a Trust Enforcement Event
with respect to the Capital Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Trust Enforcement
Event 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.
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2. The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote or written consent, on behalf of the Holders of all of
the Common Securities, waive any past Trust Enforcement Event in respect of the
Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
a. is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Trust
Enforcement Event under this Declaration as provided below in this Section
2.6(b), the Trust Enforcement Event under this Declaration shall also not
be waivable; or
b. requires the consent or vote of a Super Majority to be
waived under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Trust Enforcement Event under
this Declaration as provided below in this Section 2.6(b), the Trust
Enforcement Event under this Declaration may only be waived by the vote or
written consent of the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Capital Securities have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Trust
Enforcement Event 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 Trust Enforcement Event with
respect to the Common Securities or impair any right consequent thereon.
3. A waiver of an Indenture Event of Default by the Property Trustee
at the direction of the Holders of the Capital Securities constitutes a waiver
of the corresponding Trust Enforcement Event with respect to the Capital
Securities 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
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
Section G. Trust Enforcement Event; Notice.
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1. The Property Trustee shall, within 90 days after the occurrence of
a Trust Enforcement Event actually known to the Property Trustee, transmit by
mail, first class postage prepaid, to the Holders of the Securities, notices of
all defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section 27
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 that, except for a default in the payment of
principal of or interest on any of the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
2. The Property Trustee shall not be deemed to have knowledge of any
default except:
a. a default under Sections 5.1(1) (other than the payment of
Additional Interest) and 5.1(2) of the Indenture; or
b. any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of this Declaration shall have
actual knowledge.
ARTICLE III.
ORGANIZATION
Section A. Name and Organization.
The trust hereby continued is named "First American Capital Trust I"
as such name may be modified from time to time by the Regular Trustees following
written notice to the Delaware Trustee, the Property Trustee and the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
Section B. Office.
The address of the principal office of the Trust is c/o The First
American Financial Corporation, 114 East Fifth Street, Santa Ana, California
90271. On 10 Business Days' written notice to the Holders of Securities, the
Regular Trustees may designate another principal office for the Trust.
Section C. Purpose.
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The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, mortgage,
pledge any of its assets or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified as a grantor trust for
United States Federal income tax purposes or the Trust to register as an
Investment Company.
By the acceptance of this Trust, none of the Trustees, the Sponsor,
the Holders of the Capital Securities or Common Securities or the Capital
Securities Beneficial Owners will take any position for United States Federal
income tax purposes which is contrary to the classification of the Trust as a
grantor trust.
Section D. Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive 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 Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
1. Except as otherwise expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or at the direction of, any one such Regular
Trustee;
2. 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 and deliver 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, provided, that any registration
statements referred to in Section 3.6(b)(i), including any amendments thereto,
shall be signed by or on behalf of a majority of the Regular Trustees; and
3. a 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
Section E. Title to Property of the Trust.
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Except as provided in Section 3.8 with respect to the Debentures and
the Property 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 ownership interest in the assets of the Trust.
Section F. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority, and are hereby authorized and directed, to cause the Trust to engage
in the following activities:
1. to establish the terms and form of the Capital Securities and the
Common Securities in the manner specified in Section 7.1 and execute,
deliver, issue and sell the Capital Securities and the Common Securities in
accordance with this Declaration; provided, however, that the Trust may
issue no more than two series of Capital Securities (which will consist
exclusively of the Transfer Restricted Securities and the New 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 one-time,
simultaneous issuance of both Transfer Restricted Securities and Common
Securities on the Closing Date and a one-time issuance of New Capital
Securities pursuant to an exchange offer required pursuant to the
Registration Rights Agreement;
2. in connection with the issue and sale of the Capital Securities,
at the direction of the Sponsor, to:
a. execute and file with the Commission one or more
registration statements on the applicable forms prepared by the
Sponsor, including any amendments thereto, pertaining to the Capital
Securities, the Guarantee and the Debentures;
b. if deemed necessary or desirable by the Sponsor,
execute and file an application, prepared by the Sponsor, to the New
York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing of any Capital Securities, the
Guarantee and the Debentures;
c. if deemed necessary or desirable by the Sponsor,
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, the Guarantee
and the Debentures under Section 12(b) or 12(g) of the Exchange Act;
d. execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary, in order to
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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;
e. execute and deliver or enter into a purchase agreement
and other related agreements providing for the sale of the Capital
Securities to the Initial Purchasers; and
f. execute and deliver or enter into the Registration
Rights Agreement.
3. to acquire the Debentures 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 to be held of
record in the name of the Property Trustee for the benefit of the Holders
of the Capital Securities and the Holders of the Common Securities;
4. to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any action in relation to any such Special Event;
5. to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
6. to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration and the
Securities;
7. to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
8. to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to and pay reasonable compensation for
such services;
9. to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act, if any;
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10. to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
11. to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
12. to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
13. to give prompt written notice to the Property Trustee and the
Holders of the Securities of any notice received from the Debenture Issuer
of its election to defer payments of interest on the Debentures by
extending the interest payment period under the Debentures as authorized by
the Indenture;
14. 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
the Capital Securities and the Holders of the Common Securities or to
enable the Trust to effect the purposes for which the Trust was created;
15. to take any action, not inconsistent with applicable law, that
the Regular Trustees determine in their discretion to be necessary or
desirable in carrying out the purposes and functions of the Trust as set
out in Section 3.3 or the activities of the Trust as set out in this
Section 3.6, including, but not limited to:
a. causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
b. causing the Trust to be classified as a grantor trust
for United States Federal income tax purposes; and
c. 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;
16. to take all action necessary to consummate the Exchange Offer or
otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement;
17. to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
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18. 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 shall 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 have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property 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 G. Prohibition of Actions by the Trust and the Trustees.
1. The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees shall
not:
a. invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
b. acquire any assets other than the Debentures (and any
interest or proceeds received thereon);
c. possess Trust property for other than a Trust purpose;
d. make any loans or incur any indebtedness other than loans
represented by the Debentures;
e. possess any power or otherwise act in such a way as to vary
the Trust assets;
f. possess any power or otherwise act in such a way as to vary
the terms of the Securities in any way whatsoever (except to the extent
expressly authorized in this Declaration or by the terms of the
Securities);
g. issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
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h. other than as provided in this Declaration or by the terms
of the Securities, (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or 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, in each case,
the Trust shall have received an opinion of counsel to the effect that such
amendment, modification or termination will not cause more than an
insubstantial risk that the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act, or the Trust
will not be classified as a grantor trust for United States Federal income
tax purposes; or
i. take any action inconsistent with the status of the Trust
as a grantor trust for United States Federal income tax purposes.
Section H. Powers and Duties of the Property Trustee.
1. The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 6.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
2. The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
3. The Property Trustee shall:
a. establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Account and make payments to the Holders of the Capital Securities
and Holders of the Common Securities from the Property Account in
accordance with Section 7.2. Funds in the Property Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Property 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;
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b. 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;
c. upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed and as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of a Special Event; and
d. execute and deliver a Letter of Representation, dated on or
about the Closing Date, to DTC in such form as may be approved by any
Regular Trustee, such approval to be exclusively evidenced by the execution
of such document by a Regular Trustee on behalf of the Trust, together with
such riders and other statements as may be affixed thereto.
4. The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Declaration and the Securities.
5. The Property Trustee shall take any Legal Action which arises out
of or in connection with a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act.
6. The Property Trustee shall continue to serve as a Trustee until
either:
a. the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
b. a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
7. Subject to such limitations as are necessary to ensure compliance
with Section 3.3, the Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if a Trust Enforcement Event actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of this Declaration and the Securities.
8. The Property Trustee shall be authorized to undertake any actions
set forth in Section 317(a) of the Trust Indenture Act.
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9. For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents 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. While the Property
Trustee is so acting as Paying Agent, any such additional Paying Agent may be
removed by the Property Trustee and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee. In the event the Capital Securities do not remain in the form
of one or more Global Securities, the Property Trustee will act as Paying Agent
and may designate an additional or substitute Paying Agent at any time.
10. Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee shall 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 Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
Section I. Certain Duties and Responsibilities of the Property
Trustee.
1. The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing or waiving of all Trust Enforcement
Events 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 Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
2. No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
a. prior to the occurrence of a Trust Enforcement Event and
after the curing of all such Trust Enforcement Events that may have
occurred:
(1) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the Property
Trustee; and
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(2) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not on their face they conform to the
requirements of this Declaration;
b. the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
c. the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it without gross negligence, in
good faith in accordance with the direction of the Holders of not less than
a Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration;
d. no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against such risk or
liability is not reasonably assured to it;
e. the Property Trustee's sole duty with respect to the
custody, safe-keeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture Act;
f. the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
g. the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in
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relation to the Property Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
h. the Property 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 Property Trustee be
liable for any default or misconduct of the Regular Trustees or the
Sponsor.
Section J. Certain Rights of Property Trustee.
1. Subject to the provisions of Section 3.9:
a. the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
b. any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate (or, with respect to the establishment of the terms
and form of the Securities by the Regular Trustees, by a Trustees'
Authentication Order);
c. whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
d. the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
e. the Property Trustee may consult with counsel of its choice
or other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
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f. the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs, expenses
(including attorneys, fees and expenses and the expenses of the Property
Trustee's agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Property Trustee; provided
that, nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of a Trust Enforcement
Event, of its obligation to exercise the rights and powers vested in it by
this Declaration;
g. the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
h. the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
i. any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so act
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
j. whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities (which instructions, if requested 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
Property Trustee under the terms of the Securities in respect of such
remedy, right or action), the Regular Trustees or the Sponsor, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions;
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k. If no Trust Enforcement Event has occurred and is
continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in this
Declaration or is unsure of the application of any provision of this
Declaration, and the matter is not one on which Holders of Capital
Securities are entitled under this Declaration to vote, then the Property
Trustee may, but shall be under no duty to, take such action as is directed
by the Sponsor and, if not so directed, shall take such action as it deems
advisable and in the best interests of the Holders of the Securities and
will have no liability except for its own bad faith, gross negligence or
willful misconduct;
l. except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
m. the Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without negligence, in good
faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration.
2. No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section K. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 6.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 6.2, 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 L. Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute and deliver on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6.
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Section M. 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, the Securities, the Debentures or the Indenture.
Section N. Duration of Trust.
The Trust shall exist until terminated pursuant to the provisions of
Article 8 hereof.
Section O. Mergers.
1. 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).
2. The Trust may at the request of the Sponsor, with the consent of
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided that:
a. if the Trust is not the successor, such successor entity
(the "Successor Entity") either:
(1) expressly assumes all of the obligations of the Trust under
the Capital Securities; or
(2) substitutes for the Capital Securities other securities
having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Capital Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise;
b. the Sponsor expressly appoints a trustee of such Successor
Entity that possesses the same powers and duties as the Property Trustee as
the holder of the Debentures;
c. such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any
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Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
d. such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities
(including any Successor Securities) in any material respect;
e. such Successor Entity has a purpose identical to that of
the Trust;
f. prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Sponsor has received an
opinion of counsel experienced in such matters to the effect that:
(1) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities
(including any Successor Securities) in any material respect;
(2) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(3) 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;
g. the Sponsor or any permitted successor or assignee owns all
of the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Guarantee;
h. such Successor Entity expressly assumes all of the
obligations of the Trust with respect to the Trustees; and
i. there shall have been furnished to the Property Trustee an
Officers' Certificate and an opinion of counsel, each to the effect that
all conditions precedent set forth in this Declaration to such transaction
have been satisfied.
3. Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties or assets substantially as an entity to
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
29
conveyance, transfer or lease replacement would cause the Trust or Successor
Entity to be classified as other than a grantor trust for United States Federal
income tax purposes.
Section P. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or the property of the Trust,
the Property Trustee (irrespective of whether any Distributions on the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Property Trustee shall have made
any demand on the Trust for the payment of any past due Distributions) shall be
entitled and empowered, to the fullest extent permitted by law, by intervention
in such proceeding or otherwise (but shall have no duty):
1. to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Property Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
2. to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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ARTICLE IV.
SPONSOR
Section A. 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:
1. to prepare for filing by the Trust with the Commission one or more
registration statements on the applicable forms, including any amendments
thereto, pertaining to the Capital Securities, the Guarantee and the
Debentures;
2. 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;
3. to prepare any filing by the Trust of an application to the New
York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing, if such filing is determined to be
necessary or desirable by the Sponsor;
4. to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any amendments thereto, if
such filing is determined to be necessary or desirable by the Sponsor;
5. to negotiate the terms of a purchase agreement and other related
agreements providing for the sale of the Capital Securities to the Initial
Purchasers; and
6. to negotiate the terms of the Registration Rights Agreement.
Section B. Indemnification and Expenses of the Trustee.
The Sponsor, as borrower, agrees to indemnify the Property Trustee and
the Delaware Trustee for, and to hold each of them harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Property Trustee or the Delaware Trustee, as the case may be, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending either of them against
any claim or liability in connection with the exercise or performance of any of
their respective powers or duties hereunder; the provisions of this Section 4.2
shall survive the resignation or removal of the Delaware Trustee or the Property
Trustee or the termination of this Declaration.
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ARTICLE V.
TRUST COMMON SECURITIES HOLDER
Section A. Debenture Issuer's Purchase of Common Securities.
On the Closing Date the Debenture Issuer will purchase all of the
Common Securities issued by the Trust, for an amount at least equal to 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
Section B. Covenants of the Common Securities Holder.
For so long as the Capital Securities remain outstanding, the Common
Securities Holder covenants (i) to maintain directly 100% ownership of the
Common Securities, (ii) to cause the Trust to remain a statutory business trust
and not to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by this Declaration, (iii) to use its commercially reasonable efforts
to ensure that the Trust will not be an Investment Company, and (iv) to take no
action which would be reasonably likely to cause the Trust to be classified as
an association or a publicly traded partnership taxable as a corporation for
United States Federal income tax purposes.
ARTICLE VI.
TRUSTEES
Section A. Number of Trustees.
The number of Trustees initially shall be four (4), and:
1. at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
2. 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 or by written consent in lieu of
such meeting; provided that the number of Trustees shall be at least three;
and provided further that (1) the Delaware Trustee, in the case of a
natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law; (2) at least one Regular
Trustee is an employee or officer of, or is affiliated with, the Sponsor;
and (3) one Trustee shall be the Property Trustee for so long as this
32
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.
Section B. Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
1. a natural person who is a resident of the State of Delaware; or
2. if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable Delaware law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable
Delaware law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
Section C. Property Trustee; Eligibility.
1. There shall at all times be one Trustee which shall act as
Property Trustee which shall:
a. not be an Affiliate of the Sponsor; and
b. 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 other 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 6.3(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.
2. If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.6(c).
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3. If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
"obligor" referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
4. The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first provision contained in
Section 310(b) of the Trust Indenture Act.
Section D. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section E. Initial Trustees.
The initial Regular Trustees shall be:
Parker S. Kennedy and Thomas A. Klemens, the business address of all
of whom is c/o The First American Financial Corporation, 114 East Fifth
Street, Santa Ana, California 90271.
The initial Property Trustee and Delaware Trustee shall be:
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington Delaware 19890-0001, Attention: Corporate Trust Administration, fax:
302-427-4749, phone: 302-651-1000.
Section F. Appointment, Removal and Resignation of Trustees.
1. Subject to Section 6.6(b) and 7.5(j), Trustees may be appointed or
removed without cause at any time:
a. until the issuance of any Securities, by written instrument
executed by the Sponsor; and
b. 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.
2. The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 6.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3 (a "Successor
Property Trustee") has been appointed and has
34
accepted such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and the Sponsor. The
Trustee that acts as Delaware Trustee shall not be removed in accordance with
Section 66 until a successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 6.2 and 6.4 (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.
3. A Trustee appointed to office shall hold office until his or its
successor shall have been appointed, until his death or its dissolution or until
his or its 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:
a. No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(1) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(2) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
b. 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.
4. The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
5. If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, shall have been appointed and accepted appointment as provided
in this Section 6.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation or removal, the resigning or removed Property
Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
35
6. No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
7. At the time of resignation or removal of the Property Trustee or
the Delaware Trustee, the Debenture Issuer shall pay to such Trustee any amounts
that may be owed to such Trustee pursuant to Section 9.4.
Section G. Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is
increased pursuant to Section 6.1, 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 6.6.
Section H. 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 6.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section I. 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 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,
36
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
Section J. Delegation of Power.
1. Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his, her or
its power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
2. 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 K. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from an merger, conversion or
consolidation to which the Property 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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided such Person shall be otherwise qualified and eligible under this
Article.
ARTICLE VII.
THE SECURITIES
Section A. General Provisions Regarding Securities.
1. The Regular Trustees shall on behalf of the Trust issue one class
of capital securities representing undivided beneficial ownership interests in
the assets of the Trust, having such terms as are set forth in this Declaration
(the "Transfer Restricted Securities"), one class of capital securities
representing undivided beneficial ownership interests in the assets of the
Trust, having such terms as are set forth in this Declaration, to be only issued
in exchange for the Transfer Restricted Securities (the "New Capital
Securities," and together with the Transfer Restricted Securities the "Capital
Securities"), and one class of common securities representing undivided
beneficial ownership interests in the assets of the Trust,
37
having such terms as are set forth in this Declaration (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.
a. Capital Securities. The Capital Securities of the Trust
have an aggregate liquidation amount with respect to the assets of the
Trust of $100,000,000 and a liquidation amount with respect to the assets
of the Trust of $1,000 per Capital Security. The New Capital Security
Certificates and the Transfer Restricted Security Certificates evidencing
the Capital Securities shall be substantially in the form of Exhibit A to
this 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
may be listed provided that the New Capital Security Certificate shall not
contain any of the provisions following the Trustee's authentication, and
shall not bear the legends required by Section 7.12(i) unless the Holder of
such New Capital Securities is either (A) a broker-dealer who purchased
Transfer Restricted Securities directly from the Trust for resale pursuant
to Rule 144A or any other available exemption under the Securities Act, (B)
a Person participating in the distribution of the Transfer Restricted
Securities or (C) a Person who is an Affiliate of the Trust.
b. Common Securities. The Common Securities of the Trust have
an aggregate liquidation amount with respect to the assets of the Trust of
$3,093,000 and a liquidation amount with respect to the assets of the Trust
of $1,000 per Common Security. The Common Security Certificates evidencing
the Common Securities shall be substantially in the form of Exhibit B to
this Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Payment of Distributions on, and amounts payable on redemption of,
the Capital Securities and the Common Securities, as applicable, shall be made
Pro Rata based on the liquidation amount of such Capital Securities and Common
Securities; provided, however, that if on any date on which Distributions on the
Securities, or amounts in respect of the redemption of the Securities or in
respect of the liquidation of the Trust, are payable an Indenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
on, or redemption amount of, any of the Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of amounts
payable on redemption the full amount of such redemption amounts on all of the
outstanding Capital Securities then called for redemption, shall have been made
or provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, amounts payable
on redemption of the Capital Securities or amounts payable on liquidation of the
Trust then due and payable.
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3. The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case a Regular Trustee of the
Trust who shall have signed any of the Certificates 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 Certificate, shall be the Regular Trustees of
the Trust, although at the date of the execution and delivery of this
Declaration any such person was not such a Regular Trustee.
A Certificate shall not be valid until authenticated by the manual
signature of an Authorized Officer of the Property Trustee. Such signature
shall be conclusive evidence that the Certificate has been authenticated under
this Declaration.
Upon receipt by the Property Trustee of a Trustees' Authentication
Order with respect thereto, the Property Trustee shall authenticate the
Certificates for original issue. The aggregate liquidation amount of Capital
Securities outstanding at any time shall not exceed the liquidation amount set
forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Certificates. An authenticating agent may
authenticate Certificates whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
4. 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.
5. 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.
6. 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 and the terms of the Securities, the Guarantee,
the Indenture and the Debentures.
7. The Holders of the Securities shall have no preemptive rights or
rights to subscribe for additional Securities.
Section B. Distributions.
1. Holders of Securities shall be entitled to receive cumulative cash
Distributions at the rate per annum of 8.50% of the stated liquidation amount of
$1,000 per
39
Security, calculated on the basis of a 360-day year consisting of twelve 30-day
months. For any period shorter than a full 180-day semi-annual period,
distributions will be computed on the basis of the actual number of days elapsed
in such 180-day semi-annual period. Subject to Section 7.1(b), Distributions
shall be made on the Capital Securities and the Common Securities on a Pro Rata
basis. Distributions on the Securities shall, from the date of original issue,
accrue and be cumulative and shall be payable semi-annually only to the extent
that the Trust has funds available for the payment of such Distributions in the
Property Account. Distributions not paid on the scheduled payment date will
accumulate and compound semi-annually at the rate of 8.50% per annum
("Compounded Distributions"). "Distributions" shall mean ordinary cumulative
distributions together with any Compounded Distributions. If and to the extent
that the Debenture Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)) and/or principal on the Debentures held
by the Property Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a Pro Rata Distribution of the Payment
Amount to Holders, subject to the terms of Section 7.1(b).
2. Distributions on the Securities will be cumulative, will accrue
from the date of initial issuance and will be payable semi-annually in arrears
on each April 15 and October 15, commencing October 15, 1997, when, as and if
available for payment, by the Property Trustee, except as otherwise described
below. If Distributions are not paid when scheduled, the accrued Distributions
shall be paid to the Holders of record of Securities as they appear on the books
and records of the Trust on the record date as determined under Section 7.2(c).
3. 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, which relevant record date shall be the first day of the month of
the relevant payment dates. In the event that any date on which Distributions
are payable on the Securities is not a Business Day, payment of the Distribution
payable on such date will be made on the next succeeding day which is a Business
Day (without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case, with the
same force and effect as if made on such date.
Section C. Redemption of Securities.
Upon the repayment or redemption of the Debentures, the proceeds from
such repayment or redemption shall be simultaneously applied Pro Rata (subject
to Section 7.1(b)) to redeem Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so repaid or redeemed
for an amount equal to the redemption price paid by the Debenture Issuer in
respect of such Debentures plus an amount equal to accrued and unpaid
Distributions thereon through the date of the redemption or such lesser amount
as shall be received by the Trust in respect of the Debentures so repaid or
redeemed (the "Redemption Price").
40
Section D. Redemption Procedures.
1. Notice of any redemption of the Securities (a "Redemption Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
not fewer than 30 nor more than 60 days before the date fixed for redemption
thereof which will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption and the date on which
notices are given pursuant to this Section 7.4, a Redemption Notice shall be
deemed to be given on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each Redemption Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the Redemption
Notice or in the mailing thereof with respect to any Holder shall affect the
validity of the redemption proceedings with respect to any other Holder.
2. 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
below. The Trust may not redeem the Securities unless all accrued and unpaid
Distributions have been paid in full on all Securities then outstanding plus
accrued but unpaid Distributions to the date of redemption. For all purposes of
this Declaration, unless the context otherwise requires, all provisions relating
to the redemption of Capital Securities shall relate, in the case of any Capital
Security redeemed or to be redeemed only in part, to the portion of the
aggregate liquidation amount of Capital Securities which has been or is to be
redeemed.
3. If Securities are to be redeemed and the Trust gives a Redemption
Notice, which notice may only be issued if the Debentures are to be redeemed as
set forth in this Section 7.4 (which notice will be irrevocable), then (A) by
12:00 noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid to the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures by 10:00
a.m., Wilmington, Delaware time, on the date of redemption of the Securities,
the Property Trustee will deposit irrevocably with DTC (in the case of Capital
Securities held by the Depositary) or its nominee (or successor Depositary or
its nominee), funds sufficient to pay the applicable Redemption Price with
respect to the Capital Securities and will give DTC irrevocable instructions and
authority to pay the Redemption Price with respect to Capital Securities held as
a Global Security, to the Capital Security Beneficial Owners and (B) with
respect to Capital Securities and Common Securities held in definitive form,
provided that the Debenture Issuer has paid to the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Debentures, the Property Trustee, will irrevocably deposit with the Paying Agent
for such Capital Securities and the Common Securities funds sufficient to pay
the Redemption Price and will give such Paying Agent irrevocable instructions
and authority to pay the Redemption Price to the Holders thereof upon surrender
of their Certificates evidencing the Capital Securities and the Common
Securities. If a Redemption Notice shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of such
deposit, Distributions will cease to accrue on the Securities so called for
redemption and all rights of Holders of such Securities
41
will cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Securities shall cease to be outstanding. 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 Property Trustee or by the Sponsor as guarantor
pursuant to the 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.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Security called for redemption shall be payable to the
Holders who were Holders of such Security on the relevant record dates for the
related Distribution Dates. Accordingly, for these purposes, the applicable
Redemption Price shall not include Distributions which are being paid to Holders
who were Holders on a relevant record date. Upon satisfaction of the foregoing
conditions, then immediately prior to the close of business on the date of such
deposit or payment, 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, and
such Securities shall cease to be outstanding, and from and after the date fixed
for redemption, such Securities will not accrue distributions or bear interest.
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that have been
called for redemption.
4. Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Debenture Issuer or 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.
Section E. Voting Rights of Capital Securities.
1. Except as provided under this Declaration and as otherwise
required by the Business Trust Act, the Trust Indenture Act and other applicable
law, the Holders of the Capital Securities will have no voting rights.
2. Subject to the requirement of the Property Trustee receiving a tax
opinion in certain circumstances set forth in Section 7.5 (d) below, the Holders
of a Majority in Liquidation Amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or to direct the exercise of any trust or
power conferred upon the Property Trustee under this Declaration, including the
right to direct the Property Trustee, as holder of the Debentures, to
42
(i) exercise the remedies available to it under the Indenture as a holder of the
Debentures or (ii) consent to any amendment or modification of the Indenture or
the Debentures where such consent shall be required; provided, however, that
where a consent or action under the Indenture would require the consent or act
of the holders of more than a majority of the aggregate principal amount of
Debentures affected thereby, only the Holders of the percentage of the aggregate
stated liquidation amount of the Capital Securities which is at least equal to
the percentage required under the Indenture may direct the Property Trustee to
give such consent or to take such action.
3. If the Property Trustee fails to enforce its rights under the
Debentures, any Holder of record of Capital Securities may institute a legal
proceeding directly against the Debenture Issuer to enforce the Property
Trustee's rights under the Indenture without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to make any required payment when due and payable under the Indenture, then a
Holder of Capital Securities may on or after the respective due dates specified
in the Debenture (and after the expiration of any applicable cure period)
institute a proceeding directly against the Debenture Issuer for enforcement of
payment on Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities held by such Holder.
4. The Property Trustee shall notify all Holders of the Capital
Securities of any written notice of any Indenture Event of Default received by
the Property Trustee from the Debenture Issuer with respect to the Debentures.
Such notice shall state that such Indenture Event of Default also constitutes a
Trust Enforcement Event. The Property Trustee shall be under no obligation to
take any of the actions described in clauses 7.5(b)(i) and (ii) above unless the
Property Trustee has received an opinion of counsel rendered by a law firm
having a national tax practice to the effect that as a result of such action,
the Trust will not fail to be classified as a grantor trust for United States
Federal income tax purposes and each Holder will be treated as owning an
undivided beneficial ownership interest in the Debentures.
5. In the event the consent of the Property Trustee, as the holder of
the Debentures, is required under the Indenture with respect to any amendment or
modification of the Indenture, the Property Trustee shall request the direction
of the Holders of the Securities with respect to such amendment or modification
and shall vote with respect to such amendment or modification as directed by a
Majority in Liquidation Amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the Holders of more than a majority of the aggregate principal
amount of the Debentures, the Property Trustee may only give such consent at the
direction of the Holders of at least the same proportion in aggregate stated
liquidation amount of the Securities, voting together as a single class. The
Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Property Trustee and the
other Trustees have received an opinion of counsel rendered by a law firm having
a national tax practice to the effect that, as a result of such action, the
Trust will not be classified
43
as other than a grantor trust for United States Federal income tax purposes and
each Holder will be treated as owning an undivided beneficial ownership interest
in the Debentures.
6. A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
7. Any required 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 the Holders of Securities 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
the Property Trustee and each Holder of record of Capital Securities. Each such
notice will include a statement setting forth the following information: (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.
8. No vote or consent of the Holders of Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or distribute
Debentures in accordance with this Declaration and the terms of the Securities.
9. 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 Debenture Issuer or any
entity directly or indirectly controlled by, or under direct or indirect common
control with, the Debenture Issuer, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Securities
were not outstanding; provided, however that persons otherwise eligible to vote
to whom the Debenture Issuer or any of its subsidiaries have pledged Capital
Securities may vote or consent with respect to such pledged Capital Securities
under any of the circumstances described herein; provided, further however, the
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Regular Trustees shall certify in writing to the Property Trustee the results of
any such vote or consent.
10. Except as provided in the following sentence, Holders of the
Capital Securities will have no rights to appoint or remove the Trustees, who
may be appointed, removed or replaced solely by the Debenture Issuer, as the
Holder of all of the Common Securities. If an Indenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by a Majority in Liquidation Amount of the Capital
Securities.
Section F. Voting Rights of Common Securities.
1. Except as provided under Section 6.1(b) or this Section 7.6 or as
otherwise required by the Business Trust Act, the Trust Indenture Act or other
applicable law or provided by this Declaration, the Holders of the Common
Securities will have no voting rights.
44
2. The Holders of the Common Securities are entitled, in accordance
with Article VI of this Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
3. Subject to Section 2.6 of this Declaration and only after all
Trust Enforcement Events with respect to the Capital Securities have been cured,
waived, or otherwise eliminated and subject to the requirement of the Property
Trustee receiving a tax opinion in certain circumstances set forth in this
paragraph (c), the Holders of a Majority in Liquidation Amount of the Common
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or to direct the
exercise of any trust or power conferred upon the Property Trustee under this
Declaration, including the right to direct the Property Trustee, as holder of
the Debentures, to (i) exercise the remedies available to it under the Indenture
as a holder of the Debentures, or (ii) consent to any amendment or modification
of the Indenture or the Debentures where such consent shall be required;
provided, however, that where a consent or action under the Indenture would
require the consent or act of the holders of more than a majority of the
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to give such consent or take such
action. The Property Trustee shall be under no obligation to take any of the
actions described in clause 7.6(c)(i) and (ii) above unless the Property Trustee
has received an opinion of counsel rendered by a law firm having a national tax
practice to the effect that, as a result of such action, for United States
Federal income tax purposes the Trust will not fail to be classified as a
grantor trust and each Holder will be treated as owning an undivided beneficial
ownership interest in the Debentures.
4. If the Property Trustee fails to enforce its rights under the
Debentures, the Holder of record of Common Securities may institute a legal
proceeding directly against the Debenture Issuer to enforce the Property
Trustee's rights under the Indenture without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
5. A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
6. Any required 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 the Holders of Securities 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 on which
action by written consent of such Holders is to be taken, to be mailed to the
Property Trustee and each Holder of record of Common Securities. Each such
notice will include a statement setting forth the following information: (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.
45
7. 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
Debentures in accordance with this Declaration and the terms of the Securities.
Section G. Paying Agent, Securities Registrar or Exchange Agent.
In the event that any Capital Securities are not in book-entry only
form, the Trust shall maintain in Wilmington, Delaware (i) an office or agency
where Securities may be presented for registration of transfer ("Security
Registrar" or "Securities Registrar"), (ii) an office or agency where Securities
may be presented for payment ("Paying Agent") and (iii) an office or agency
where Securities may be presented for exchange ("Exchange Agent"). The Security
Registrar shall keep a register of the Capital Securities and of their transfer
(the "Securities Register"). The Trust may appoint the Security Registrar, the
Paying Agent and the Exchange Agent and may appoint one or more co-registrars,
one or more additional paying agents and one or more additional exchange agents
in such other locations as it shall determine. The term "Security Registrar"
includes any additional registrar, "Paying Agent" includes any additional paying
agent and the term "Exchange Agent" includes any additional exchange agent. The
Trust may change any Paying Agent, Securities Registrar or Exchange Agent
without prior notice to the Holders; provided that the Trust will provide the
--------
Holders of the Securities written notice of any such change within 30 days after
the date of such change. Any Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Regular Trustees. The Trust
shall notify the Property Trustee of the name and address of any Paying Agent,
Securities Registrar or Exchange Agent not a party to this Declaration. If the
Trust fails to appoint or maintain another entity as Paying Agent, Securities
Registrar or Exchange Agent, the Property Trustee shall act as such. The Trust
or any of its Affiliates may act as Paying Agent, Securities Registrar or
Exchange Agent. The Trust shall act as Paying Agent, Registrar and Exchange
Agent for the Common Securities. The Trust initially appoints the Property
Trustee to act as Paying Agent, Securities Registrar and Exchange Agent for the
Capital Securities. In the event the Property Trustee shall no longer be Paying
Agent, Securities Registrar or Exchange Agent, the Regular Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Regular Trustees and the Debenture Issuer) to act as Paying Agent, Securities
Registrar or Exchange Agent.
Section H. Transfer of Securities.
1. Upon surrender for registration of transfer of any Security at an
office or agency of the Trust designated for such purpose, the Trust shall
execute, and the Property Trustee shall authenticate and make available for
delivery by the Trust, in the name of the designated transferee or transferees,
one or more new Securities of any authorized denominations and of a like
aggregate liquidation amount; provided that no Capital Security shall be issued
in an amount representing less than $100,000 in aggregate liquidation amount of
Capital Securities.
46
2. At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate liquidation
amount, upon surrender of the Securities to be exchanged at an office or agency
of the Trust designated for such purpose. Whenever any Securities are so
surrendered for exchange, the Trust shall execute, and the Property Trustee
shall authenticate and make available for delivery by the Trust, the Securities
which the Holder making the exchange is entitled to receive; provided that no
Capital Security shall be issued in an amount representing less than $100,000 in
aggregate liquidation amount of Capital Securities.
3. Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Trust or the Security
Registrar) be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Trust and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. A
transferee of a Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security from the Trust. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
4. No service charge shall be made for any registration of transfer
or exchange of Securities, but the Trust may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities.
5. If the Securities are to be redeemed in part, the Trust shall not
be required (A) to issue, register or cause to be registered the transfer of or
exchange of any Securities during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of any such
Securities selected for redemption under Section 7.4 and ending at the close of
business on the day of such mailing, or (B) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
6. The Trust or the Sponsor at any time may deliver Capital
Securities to the Property Trustee for cancellation. The Security Registrar,
Paying Agent and Exchange Agent shall forward to the Property Trustee any
Capital Securities surrendered to them for registration of transfer, redemption,
exchange or payment. The Property Trustee shall promptly cancel all Capital
Securities, surrendered for registration of transfer, redemption, exchange,
payment, replacement or cancellation and shall dispose of cancelled Capital
Securities in accordance with its customary procedures unless the Trust
otherwise directs. Except as provided herein, the Trust may not issue new
Capital Securities to replace Capital Securities that it has paid or that have
been delivered to the Property Trustee for cancellation or that any Holder has
exchanged.
Section I. Mutilated, Destroyed, Lost or Stolen Certificates.
47
If:
1. any mutilated Certificates should be surrendered to the Securities
Registrar, or if the Securities Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate; and
2. there shall be delivered to the Securities Registrar such security
or indemnity as may be required by it to keep it, the Sponsor, the Regular
Trustees, the Property Trustee, the Delaware Trustee and the Trust
harmless, then, in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Securities Registrar 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 7.9, the Securities Registrar 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.
Section J. 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 K. Form and Dating.
The Capital Securities shall be evidenced by one or more certificates
substantially in the form of Exhibit A and the Common Securities shall be
evidenced by one or more certificates substantially in the form of Exhibit B,
each of which is hereby incorporated in and expressly made a part of this
Declaration. The Property Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibits A and B. Certificates
representing the Securities may be printed, typewritten, 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. The Securities
may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
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to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A to the Property Trustee in writing. Each
Capital Security
48
shall be dated the date of its authentication. The forms of Securities set forth
in Exhibits A and B are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
1. Global Securities. Securities offered and sold to QIBs in
-----------------
reliance on Rule 144A shall be issued in the form of one or more Global
Securities in definitive, fully registered form without distribution coupons
with the appropriate global legends in the form set forth in Exhibit A hereto,
and the Private Placement Legend, which shall be deposited with the Property
Trustee, at its Wilmington, Delaware office, as custodian for the Depositary,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Trust and authenticated by the Property Trustee as herein
provided. The aggregate liquidation amount of Capital Securities represented by
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Property Trustee at the direction of the Sponsor, and
the Depositary or its nominee as hereinafter provided.
2. Book-Entry Provisions. This Section 7.11(b) shall apply only to
---------------------
Global Securities to be deposited with or on behalf of the Depositary. A
Regular Trustee shall execute and the Property Trustee shall, in accordance with
this Section 7.11(b), authenticate and make available for delivery initially one
or more Global Securities that (i) shall be registered in the name of Cede & Co.
or other nominee of the Depositary and (ii) shall be delivered by the Property
Trustee to the Depositary pursuant to the Depositary's written instructions or,
if no such instructions are received by the Property Trustee, held by the
Property Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary shall have no rights
under this Declaration with respect to any Global Security held on their behalf
by the Depositary or by the Property Trustee as the custodian of the Depositary
or under such Global Security, and the Depositary may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
3. Definitive Capital Securities. Except as provided in this
-----------------------------
Declaration, owners of beneficial interests in a Global Security will not be
entitled to receive physical delivery of certificated Capital Securities
("Definitive Capital Securities"). Purchasers of Securities (other than QIBs)
who are "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) will receive Capital Securities in the form of
individual certificates in definitive, fully registered form without
distribution coupons and with the Private Placement Legend ("Restricted
Definitive Capital Securities"); provided, however, that upon transfer of such
-------- -------
Restricted Definitive Capital Securities to a QIB, such Restricted
49
Definitive Capital Securities will, unless the Global Security has previously
been exchanged, be exchanged for an interest in a Global Security pursuant to
the provisions of Section 7.12(d). Restricted Definitive Capital Securities will
bear the Private Placement Legend unless removed in accordance with Section
7.12.
4. Authorized Denominations. The Capital Securities are issuable
------------------------
only in denominations of $100,000 and integral multiples of $1,000 in excess
thereof.
Section L. Transfer Procedures and Restrictions.
1. General. Except as otherwise provided in Section 7.12(b), if
-------
Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Private Placement Legend, or if a request is made
to remove such Private Placement Legend on Capital Securities, the Capital
Securities so issued shall bear the Private Placement Legend, or the Private
Placement Legend shall not be removed, as the case may be, unless either (i) the
date of such issuance or request is two years after the later of the date of
original issue and the last date on which the Sponsor or any Affiliate of the
Sponsor was the owner of such Capital Securities (or any predecessor thereto) or
(ii) there is delivered to the Trust and the Property Trustee such satisfactory
evidence, which shall include an opinion of counsel rendered by a law firm
having a national securities practice, as may be reasonably required by the
Sponsor and the Property Trustee, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof are
made pursuant to an exception from the registration requirements of the
Securities Act or, with respect to Transfer Restricted Securities, that such
Securities are not "restricted" within the meaning of Rule 144. Upon provision
of such satisfactory evidence, the Property Trustee, at the written direction of
the Trust, shall authenticate and deliver Capital Securities that do not bear
the legend.
2. Transfers After Effectiveness of a Registration Statement. After
---------------------------------------------------------
the effectiveness of any registration statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply (other than (i) the legend requiring that transfers of
Capital Securities be made in blocks having an aggregate liquidation amount of
not less than $100,000 and (ii) the Private Placement Legend with respect to any
Holder of such Capital Securities who is (A) a broker-dealer who purchased
Transfer Restricted Securities directly from the Trust for resale pursuant to
Rule 144A or any other available exemption under the Securities Act, (B) a
Person participating in the distribution of the Transfer Restricted Securities
or (C) a Person who is an Affiliate of the Trust), and beneficial interests in a
Global Security will be available to transferees of such Capital Securities,
upon exchange of the transferring Holder's Restricted Definitive Capital
Security or directions to transfer such Holder's beneficial interest in the
Global Security as the case may be. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Global Security shall be
effective unless the transferor delivers to the Trust a certificate in a form
substantially similar to that attached hereto as the form of "Assignment" in
Exhibit A. Except as otherwise provided in Section 7.12(l), after the
effectiveness of any such registration statement, the Trust shall issue and the
Property Trustee, upon a written order of
50
the Trust signed by one Regular Trustee, shall authenticate a Global Security
without the Private Placement Legend for deposit with the Depositary to evidence
transfers of (i) beneficial interests from the Global Security with the Private
Placement Legend and (ii) Restricted Definitive Capital Securities to the Global
Security without the Private Placement Legend.
3. Transfer and Exchange of Definitive Capital Securities. When
------------------------------------------------------
Definitive Capital Securities are presented to the Security Registrar:
(x) to register the transfer of such Definitive Capital Securities;
or
(y) to exchange such Definitive Capital Securities for an equal
aggregate liquidation amount of Definitive Capital Securities,
the Securities Registrar shall register the transfer or make the exchange as
requested if the requirements of Section 7.8 or 7.9 are satisfied and in the
case of Definitive Capital Securities that are Restricted Definitive Capital
Securities:
(A) if such Restricted Definitive Capital Securities are being
delivered to the Security Registrar by a Holder for registration in
the name of such Holder, without transfer, receipt by the Securities
Registrar of a certification from such Holder to that effect; or
(B) if such Restricted Definitive Capital Securities are being
transferred: (i) receipt by the Security Registrar of a certification
from the transferor in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A, and (ii) if the Trust
or Security Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
Private Placement Legend.
4. Restrictions on Transfer of a Definitive Capital Security for a
---------------------------------------------------------------
Beneficial Interest in a Global Capital Security. A Definitive Capital Security
- ------------------------------------------------
may not be exchanged for a beneficial interest in the applicable Global Security
except upon satisfaction of the requirements set forth below. Upon receipt by
the Securities Registrar of a Definitive Capital Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Securities Registrar, together with:
a. if such Definitive Capital Security is a Restricted Definitive
Capital Security, certification in a form substantially similar to that
attached hereto as the form of "Assignment" in Exhibit A; and
b. whether or not such Definitive Capital Security is a Restricted
Definitive Capital Security, written instructions directing the Securities
Registrar to make, or to direct the Depositary to make, an adjustment on
its books and records with respect to
51
the appropriate Global Security to reflect an increase in the number of the
Capital Securities represented by such Global Security,
then the Securities Registrar shall cancel such Definitive Capital Security and
cause, or direct the Depositary to cause, the aggregate liquidation amount of
Capital Securities represented by the appropriate Global Security shall be
increased accordingly. If no Global Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Regular Trustee, an appropriate number of Capital Securities in global form.
5. Transfer and Exchange of Global Securities. Subject to Section
------------------------------------------
7.12(f), the transfer and exchange of Global Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
6. Transfer of a Beneficial Interest in a Global Security for a
------------------------------------------------------------
Definitive Capital Security.
- ---------------------------
a. Any Person having a beneficial interest in a Global Security may
upon request, but only upon 20 days prior written notice to the Securities
Registrar and only if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Capital Security
representing the same aggregate liquidation amount of Capital Securities.
Upon receipt by the Securities Registrar from the Depositary or its nominee
on behalf of any Person having a beneficial interest in a Global Security
of written transfer instructions and a certification from the transferor in
a form substantially similar to that attached hereto as the form of
"Assignment" in Exhibit A, which may be submitted by facsimile, then the
Securities Registrar will cause the aggregate number of Capital Securities
referenced in such transfer instructions represented by the applicable
Global Security to be reduced on its books and records and, following such
reduction, the Trust will execute and the Property Trustee will
authenticate and make available for delivery to the transferee a Definitive
Capital Security.
b. Definitive Capital Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 7.12(f) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its participants or otherwise,
shall instruct the Securities Registrar in writing. The Property Trustee
shall deliver such Definitive Capital Securities to the Persons in whose
names such Definitive Capital Securities are so registered in accordance
with such instructions of the Depositary.
7. Restrictions on Transfer and Exchange of Global Securities.
----------------------------------------------------------
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in Section 7.12(h)), a Global Security may not be
transferred as a whole except by the Depositary
52
to a nominee of the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
8. Authentication of Definitive Capital Securities. If at any time:
-----------------------------------------------
a. there occurs a Trust Enforcement Event which is continuing, or
b. the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Capital
Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Regular Trustee requesting the authentication
and delivery of Definitive Capital Securities to the Persons designated by the
Trust, will authenticate and make available for delivery Definitive Capital
Securities, equal in number to the aggregate liquidation amount of Capital
Securities represented by the Global Securities, in exchange for such Global
Securities.
9. Legend.
------
a. Except as permitted by the following paragraph (ii), each
Certificate evidencing the Global Securities and the Definitive
Capital Securities (and all Certificates issued in exchange therefor
or substitution thereof) shall bear a legend (the "Private Placement
Legend") in substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE `SECURITIES
ACT'), OR ANY STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR
THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A
`RESTRICTED' SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
53
TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS
TWO YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF SUCH RESTRICTED SECURITIES (OR ANY PREDECESSOR) EXCEPT
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
`QUALIFIED INSTITUTIONAL BUYER' (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS
SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSE (II)(D) IS SUBJECT TO THE RIGHT
OF THE ISSUER OF THIS SECURITY AND THE PROPERTY TRUSTEE FOR SUCH
SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM
AND SUBSTANCE.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY
IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000
(100 CAPITAL SECURITIES). ANY SUCH TRANSFER OF CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN
$100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT
NOT LIMITED TO THE RECEIPT OF
54
DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES."
(ii) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by a Global
Security) pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 under the Securities Act after such
registration statement ceases to be effective:
(A) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Security Registrar shall permit the
Holder thereof to exchange such Restricted Capital Security for a
Definitive Capital Security that does not bear the Private Placement
Legend (other than the legend requiring that transfers of Capital
Securities be made in blocks having an aggregate liquidation amount of
not less than $100,000) and rescind any restriction on the transfer of
such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented by a Global Security, the Security Registrar shall permit
the Holder of such Global Security to exchange such Global Security
for another Global Security that does not bear the Private Placement
Legend (other than the legend requiring that transfers of Capital
Securities be made in blocks having an aggregate liquidation amount of
not less than $100,000).
(j) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
Definitive Capital Securities to the extent permitted by this Declaration or
redeemed, repurchased or canceled in accordance with the terms of this
Declaration, such Global Security shall be returned to the Depositary for
cancellation or retained and canceled by the Property Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for Definitive Capital Securities, Capital Securities represented by
such Global Security shall be reduced and an adjustment shall be made on the
books and records of the Depositary and the Security Registrar, to reflect such
reduction.
(k) No Obligation.
-------------
(i) Neither the Sponsor, the Trust nor the any Trustee shall have any
responsibility or obligation to any beneficial owner of a Global Security,
any participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant thereof, with respect to any ownership interest in the Capital
Securities or with respect to the delivery to any participant in the
Depositary, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with
55
respect to such Capital Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the
Capital Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depositary or its nominee in the
case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Property Trustee and
Securities Registrar may conclusively rely and shall be fully protected in
relying upon information furnished by the Depositary or any agent thereof
with respect to its participants and any beneficial owners.
(ii) The Property Trustee and the Security Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Declaration or under
applicable law with respect to any transfer of any interest in any Capital
Security (including any transfers between or among Depositary participants
or beneficial owners in any Global Security) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of
this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
(l) Exchange of Transfer Restricted Securities for New Capital
----------------------------------------------------------
Securities. The Transfer Restricted Securities may be exchanged for New Capital
- ----------
Securities pursuant to the terms of the Exchange Offer. The Property Trustee
shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the New Capital Securities, the
transactions contemplated by the Exchange Offer have been
consummated; and
(B) the number of Transfer Restricted Securities properly
tendered in the Exchange Offer that are represented by a
Global Security and the number of Transfer Restricted
Securities properly tendered in the Exchange Offer that are
represented by Definitive Capital Securities, the name of
each Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly tendered
in the Exchange Offer by each such Holder and the name and
address to which Definitive Capital Securities for New
Capital Securities shall be registered and sent for each
such Holder.
The Property Trustee, upon receipt of (i) such Officers' Certificate
and (ii) an opinion of counsel (x) to the effect that the New Capital Securities
have been registered under
56
Section 5 of the Securities Act and the Indenture has been qualified under the
Trust Indenture Act and (y) with respect to the matters set forth in Section 1
of the Registration Rights Agreement, shall authenticate (A) a Global Security,
executed and delivered by the Trust to the Property Trustee, representing New
Capital Securities in aggregate liquidation amount equal to the aggregate
liquidation amount of Transfer Restricted Securities represented by a Global
Security indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Capital Securities, executed and delivered by the
Trust to the Property Trustee, representing New Capital Securities registered in
the names of and in the liquidation amounts indicated in such Officers'
Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Transfer Restricted Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Security representing Transfer Restricted Securities indicating the reduction in
the number and aggregate liquidation amount represented thereby as a result of
the Exchange Offer.
The Trust shall deliver such authenticated Definitive Capital
Securities representing New Capital Securities to the Holders thereof as
indicated in such Officer's Certificate.
(m) Minimum Transfers. Transfer Restricted Securities and, when
-----------------
issued, New Capital Securities may only be transferred in minimum blocks of
$100,000 aggregate liquidation amount. Any transfer of Capital Securities in a
block having an aggregate liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be a Holder of such Capital Securities for any purpose,
including, but not limited to, the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Capital Securities.
Section M. CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP" numbers
(if then generally in use), and, if so used, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
-------- ----
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
57
ARTICLE VIII.
DISSOLUTION AND TERMINATION OF TRUST
Section A. Terminating Events. The Trust shall dissolve upon the
first to occur of any of the following events:
1. the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;
2. the written direction to the Property Trustee from the Sponsor at
any time to terminate the Trust and, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to distribute
Debentures to Holders in exchange for the Securities (which direction is
optional and wholly within the discretion of the Sponsor);
3. the redemption of all of the Capital Securities in connection with
the redemption or maturity of all of the Debentures; and
4. the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section B. Termination. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the distribution
by the Property Trustee to Holders upon the liquidation of the Trust pursuant to
Section 8.3, or upon the redemption of all of the Securities pursuant to Section
7.3, of all amounts required to be distributed hereunder upon the final payment
of the Securities; (b) the payment of any expenses owed by the Trust; and (c)
the discharge of all duties of the Regular Trustees, including the performance
of any tax reporting obligations with respect to the Trust or the Holders.
Section C. Liquidation. 1. At such time as an event specified in
clause (a), (b) or (d) of Section 8.1 occurs, the Trust shall be liquidated by
the Regular Trustees as expeditiously as the Regular Trustees determine to be
possible by distributing, after satisfaction or the making of reasonable
provisions for the payment of liabilities to creditors of the Trust as provided
by applicable law, to each Holder an interest in the Debentures Pro Rata,
subject to Sections 7.1(b) and 8.3(d). The date of liquidation (the
"Liquidation Date") shall be as specified in writing by the Regular Trustees to
the Property Trustee, and thereafter notice of liquidation shall be given by the
Property Trustee by first-class mail, postage prepaid mailed not less than 30
nor more than 60 days prior to the Liquidation Date to each Holder of Securities
at such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
a. state the CUSIP number of the Securities;
58
b. state the Liquidation Date;
c. state that from and after the Liquidation Date, the
Securities will no longer be deemed to be outstanding and any Certificates
not surrendered for exchange will be deemed to represent a Pro Rata portion
of Debentures; and
d. provide such information with respect to the mechanics by
which Holders may exchange Certificates for Debentures, or if Section
8.3(d) applies receive a Liquidation Distribution, as the Regular Trustees
shall determine is appropriate.
2. Except where Section 8.1(c) or 8.3(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to Holders, the
Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as Exchange Agent or through the appointment of a separate Exchange
Agent, shall establish such procedures as directed by the Trust to effect the
distribution of Debentures in exchange for the outstanding Certificates.
3. Except where Section 8.1(c) or 8.3(d) applies, after the
Liquidation Date, (i) the Securities will no longer be deemed to be outstanding,
(ii) certificates representing a Pro Rata portion of Debentures will be issued
to Holders of Securities, upon surrender of such Certificates to the Security
Registrar or its agent for exchange, (iii) any Certificates not so surrendered
for exchange will be deemed to represent a Pro Rata portion of Debentures,
accruing interest at the rate provided for in the Debentures from the last
Distribution date on which a Distribution was made on such Securities until such
Certificates are so surrendered (and until such Certificates are so surrendered,
no payments of interest or principal will be made to Holders of Securities with
respect to such Debentures) and (iv) all rights of Holders holding Securities
will cease, except the right of such Holders to receive Debentures upon
surrender of Certificates.
4. In the event that, notwithstanding the other provisions of this
Section 8.3, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Regular Trustees not to be
practical, the assets of the Trust shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Regular Trustees. In such event, on
the date of the dissolution, winding-up or other termination of the Trust,
Holders will be entitled to receive out of the assets of the Trust available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the liquidation amount
per Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
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 by the Trust
on the Securities shall be applied Pro Rata (subject to Section 7.1(b)) based
upon liquidation amounts.
59
ARTICLE IX.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section A. Liability.
1. Except as expressly set forth in this Declaration, the Guarantee
and the terms of the Securities, the Sponsor:
a. shall not be 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
b. shall not be required to pay to the Trust or to any Holder
of Securities any deficit upon a liquidation of the Trust or otherwise.
2. 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.
3. 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 B. Exculpation.
1. 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 or any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
2. 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
60
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
Section C. Fiduciary Duty.
1. 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 an other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
2. Unless otherwise expressly provided herein:
a. whenever a conflict of interest exists or arises between
any Covered Persons; or
b. whenever this Declaration or any other agreement
contemplated herein 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.
3. Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
a. 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
b. 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.
61
Section D. Indemnification.
1.a. The Sponsor shall indemnify, to the full extent permitted by
law, any Debenture Issuer 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 Debenture Issuer Indemnified Person against expenses
(including attorney fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith, without gross negligence 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 Debenture Issuer Indemnified Person did not act in good faith, without gross
negligence and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
b. The Sponsor shall indemnify, to the full extent permitted by law,
any Debenture Issuer 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 Debenture Issuer Indemnified Person against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith, without gross negligence 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 Debenture Issuer 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.
c. Any indemnification under paragraphs (i) and (ii) of this Section
94 (unless ordered by a court) shall be made by the Sponsor only as authorized
in the specific case upon a determination that indemnification of the Debenture
Issuer 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 Holder of the
Common Securities.
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d. Expenses (including attorneys' fees) incurred by a Debenture
Issuer Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 94 shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Debenture Issuer Indemnified Person to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Sponsor as authorized in this Section 94. Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a Quorum of
disinterested Regular Trustees, (ii) if such a Quorum is not obtainable, or,
even if obtainable, if a Quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Holder of the Common
Securities, that, based upon the facts known to the Regular Trustees, counsel or
the Holder of the Common Securities at the time such determination is made, such
Debenture Issuer Indemnified Person acted in bad faith, was grossly negligent 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
Debenture Issuer 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 Holder of the
Common Securities reasonably determine that such person deliberately breached
his duty to the Trust or the Holders.
e. The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4(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, or by any vote of
stockholders or disinterested directors of the Sponsor or by any vote of Holders
of Capital Securities 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 9.4(a) shall be deemed to be provided by a
contract between the Sponsor and each Debenture Issuer Indemnified Person who
serves in such capacity at any time while this Section 9.4(a) is in effect. Any
repeal or modification of this Section 9.4(a) shall not affect any rights or
obligations then existing.
f. The Sponsor or the Trust may purchase and maintain insurance on
behalf of any person who is or was a Debenture Issuer 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 Sponsor would have the
power to indemnify him against such liability under the provisions of this
Section 9.4(a).
g. For purposes of this Section 9.4(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
9.4(a) with
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respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
h. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 94 shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Debenture
Issuer Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. The obligation to indemnify as set forth
in this Section 94 shall survive the satisfaction and discharge of this
Declaration.
2. The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the
Delaware Trustee, (iii) each Affiliate of the Property Trustee or the Delaware
Trustee, and (iv) any officers, directors, shareholders, members, partners,
employees or agents of the Property 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 gross negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of 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 9.4(b)
shall survive the satisfaction and discharge of this Declaration and the
resignation or removal of the Property Trustee or the Delaware Trustee.
Section E. Outside Businesses.
Each Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the activities 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 activities of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or
the Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and each Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Each
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
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ARTICLE X.
ACCOUNTING
Section A. 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 B. Certain Accounting Matters.
1. 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. The
Trust shall use the accrual method of accounting for United States Federal
income tax purposes. 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.
2. The Regular Trustees shall cause to be duly 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.
3. The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, an 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.
4. The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States Federal income
tax return, on a Form 1041 or such other form required by United States Federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
Section C. Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no
65
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the signatories for
the Property Account.
Section D. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claim for excess withholding, Holders shall be limited to an action against
the applicable jurisdiction. If the amount required to be withheld was not
withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XI.
AMENDMENTS AND MEETINGS
Section A. Amendments.
1. 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)
and (ii) by the Property Trustee if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee; and (iii) by the
Delaware Trustee if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee.
2. No amendment shall be made, and any such purported amendment shall
be void and ineffective:
a. unless, in the case of any proposed amendment, the Property
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);
66
b. unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
(1) 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
(2) 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
that all conditions precedent, if any, in this Declaration to the
execution and delivery of such amendment have been satisfied,
provided, however, the Property Trustee shall not be required to sign any
-------- -------
such amendment; and
c. unless the Trust shall have first received an opinion of
counsel rendered by a law firm having a national tax and securities
practice to the effect that such amendment would not:
(1) cause the Trust to be classified as an association or
publicly traded partnership taxable as a corporation for United States
Federal income tax purposes;
(2) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(3) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
3. At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would (i) adversely affect the rights,
privileges or preferences of the Holders, (ii) result in the dissolution,
winding-up or termination of the Trust other than pursuant to the terms of this
Declaration, (iii) change the amount or timing of any Distribution of the
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Securities as of a specified date or (iv) restrict
the right of a Holder of Securities to institute suit for the enforcement of any
such payment on or after such date, then the Holders of the Securities voting
together as a single class will be entitled to vote on such amendment and such
amendment shall not be effective except with the approval of at least a Majority
in Liquidation Amount of the Securities affected thereby; provided that, if any
amendment referred to in clause (i) above would adversely affect only the
Capital Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment
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and such amendment shall not be effective except with the approval of a Majority
in Liquidation Amount of such class of Securities.
4. Section 9.1(c) and this Section 11.1 shall not be amended without
the consent of all of the Holders of the Securities.
5. Article 5 shall not be amended without the consent of the Holders
of a Majority in Liquidation Amount of the Common Securities.
6. The rights of the Holders of the Common Securities under Article 6
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.
7. Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
a. cure any ambiguity;
b. correct or supplement any provision in this Declaration
that may be inconsistent with any other provision of this Declaration; and
c. to modify, eliminate or add to any provision of this
Declaration, provided such modification, elimination or,addition would not
adversely affect the rights, privileges or preferences of any Holder of the
Securities.
8. The issuance of a Trustees' Authentication Order by the Regular
Trustees for purposes of establishing the terms and form of the Securities as
contemplated by Section 7.1 shall not be deemed an amendment of this Declaration
subject to the provisions of this Section 11.1.
Section B. Meetings of the Holders of Securities; Action by Written
Consent.
1. 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 notices in
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
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Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
2. Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
a. 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 Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
b. 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 such proxy. 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;
c. 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
d. 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 for 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
69
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 XII.
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section A. Representations and Warranties of the Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
1. the Property Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, this Declaration;
2. the Property Trustee satisfies the requirements set forth in
Section 6.3(a);
3. the execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action
on the part of the Property Trustee. This Declaration under Delaware law
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency and other similar laws
affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
4. the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee; and
5. no consent, approval or authorization of, or registration with or
notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this
Declaration.
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Section B. Representations and Warranties of the 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:
1. the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration
and, if it is not a natural person, is duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;
2. the execution, delivery and performance by the Delaware Trustee of
this Declaration has been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration under Delaware law
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency and other similar laws
affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
3. the execution, delivery and performance of this Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Delaware Trustee; and
4. no consent, approval or authorization of, or registration with or
notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration.
ARTICLE XIII.
MISCELLANEOUS
Section A. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
1. 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 Property Trustee, the Delaware Trustee and the
Holders of the Securities):
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The First American Financial Corporation
114 East Fifth Street
Santa Ana, California 90271
2. if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to
the Regular Trustees, the Property Trustee and the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington Delaware 19890-0001
Attention: Corporate Trust Administration
fax: 302-427-4749
phone: 302-651-1000
3. if given to the Property Trustee, at its Corporate Trust Office
(or such other address as the Property Trustee may give notice of to the
Regular Trustees, the Delaware Trustee and the Holders of the Securities).
4. 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 Property Trustee, the
Delaware Trustee and the Trust).
5. 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 B. Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
(without regard to principles of conflicts of laws).
Section C. Intention of the Parties.
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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 in a manner consistent with
such classification.
Section D. 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 E. 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 F. 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 G. Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
THE FIRST AMERICAN FINANCIAL CORPORATION,
as Sponsor and Holder of Common Securities
BY: /s/ THOMAS A. KLEMENS
--------------------------------------
Name: Thomas A. Klemens
Title: Executive Vice President and Chief
Financial Officer
WILMINGTON TRUST COMPANY, as Property
Trustee
BY: /s/ EMMETT R. HARMON
-------------------------------------
Name: Emmett R. Harmon
Title: Vice President
WILMINGTON TRUST COMPANY, as Delaware
Trustee
BY: /s/ EMMETT R. HARMON
-------------------------------------
Name: Emmett R. Harmon
Title: Vice President
Thomas A. Klemens, as Regular Trustee
BY: /s/ THOMAS A. KLEMENS
-------------------------------------
Name: Thomas A. Klemens
Title: Executive Vice President and Chief
Financial Officer
Parker S. Kennedy, as Regular Trustee
BY: /s/ PARKER S. KENNEDY
-------------------------------------
Name: Parker S. Kennedy
Title: Regular Trustee
EXHIBIT A
THIS CAPITAL SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY"), OR A
NOMINEE OF THE DEPOSITORY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY 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 DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO FIRST AMERICAN CAPITAL TRUST I 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 REGISTERED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS,
ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED
A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE
LATER OF THE DATE WHICH IS TWO YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF SUCH RESTRICTED SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
2
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSE (II)(D) IS SUBJECT TO THE RIGHT OF THE ISSUER
OF THIS SECURITY AND THE PROPERTY TRUSTEE FOR SUCH SECURITIES TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION
ACCEPTABLE TO THEM IN FORM AND SUBSTANCE.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES). ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
Certificate No. Number of Capital Securities:
CUSIP No. 31847J AA8
Certificate Evidencing Capital Securities
of
First American Capital Trust I
8.50% Capital Securities
(liquidation amount $1,000 per Capital Security)
FIRST AMERICAN CAPITAL TRUST I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Cede & Co. (the "Holder") is the registered owner of the aggregate liquidation
amount of Capital Securities of the Trust specified in Schedule A hereto
representing undivided beneficial ownership interests in the assets of the Trust
designated the 8.50% Capital 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 as provided in the Declaration (as defined below). The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are set forth in and
shall in all respects be subject to the provisions of, the Amended and Restated
Declaration of Trust of the Trust, dated as of April 22, 1997 (as the same may
be amended from time to time (the "Declaration")), among The First American
Financial Corporation, as Sponsor, Parker S.
3
Kennedy and Thomas A. Klemens, as Regular Trustees, Wilmington Trust Company, as
Property Trustee, and Wilmington Trust Company, as Delaware Trustee. 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 Guarantee to the
extent described therein. The Sponsor will provide a copy of the Declaration,
the Guarantee and the Indenture to a Holder without charge upon written request
to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of undivided indirect beneficial ownership interests in the
Debentures.
4
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _____, 19__.
FIRST AMERICAN CAPITAL TRUST I
BY:_______________________________________
Name:
Title:
This is one of the Securities referred to in the within mentioned
Declaration.
Dated: _____ ___, 19__ Wilmington Trust Company
as Trustee
By:____________________________________________
Authorized Signatory
5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security 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 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:/*/:________________________________________________________
In connection with any transfer of any of the Capital Securities
evidenced by this certificate, the undersigned confirms that such Capital
Securities are being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without transfer; or
- --------------
/*/ Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
6
(2) [_] transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [_] transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act of 1933, as amended that is acquiring the Capital
Securities for its own account, or for the account of such an
institutional "accredited investor," for investment purposes and not
with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act of 1933, as amended;
or
(4) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) [_] transferred pursuant to an effective registration statement under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Security Registrar will refuse
to register any of the Capital Securities evidenced by this certificate in the
name of any Person other than the registered Holder thereof; provided, however,
-------- -------
that if box (3) or (4) is checked, the Registrar may require, prior to
registering any such transfer of the Capital Securities, such legal opinions,
certifications and other information as the Trust or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act; provided, further, that (i) if box (2) is checked, the transferee must also
-------- -------
certify that it is a qualified institutional buyer as defined in Rule 144A or
(ii) if box (3) is checked, the transferee must also provide to the Registrar a
Transferee Letter of Representation in the form attached to the Offering
Memorandum of the Trust dated April 17, 1997; provided, further, that after the
date that a registration statement has been filed and so long as such
registration statement continues to be effective, the Security Registrar may
only permit transfers for which box (5) has been checked.
--------------------------------------------
Signature
7
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate No. Number of Common Securities:
Certificate Evidencing Common Securities
of
First American Capital Trust I
8.50% Common Securities
(liquidation amount $1,000 per Common Security)
FIRST AMERICAN CAPITAL TRUST I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Cede & Co. (the "Holder") is the registered owner of the aggregate liquidation
amount of Common Securities of the Trust specified in schedule A hereto
representing undivided beneficial ownership interests in the assets of the Trust
designated the 8.50% 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
as provided in the Declaration (as defined below). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are set forth in and shall in all respects
be subject to the provisions of, the Amended and Restated Declaration of Trust
of the Trust, dated as of April 22, 1997 (as the same may be amended from time
to time (the "Declaration")), among The First American Financial Corporation, as
Sponsor, Parker S. Kennedy and Thomas A. Klemens, as Regular Trustees,
Wilmington Trust Company, as Property Trustee, and Wilmington Trust Company, as
Delaware Trustee. 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 Guarantee to the extent described therein. The Sponsor will provide a
copy of the Declaration, the Guarantee and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of undivided indirect beneficial ownership interests in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ________, 19__.
FIRST AMERICAN CAPITAL TRUST I
By:____________________________
Name:
Title:
This is one of the Securities referred to in the within mentioned
Declaration.
Dated: ________ ___, 19__
Wilmington Trust Company
as Trustee
By:
-------------------------------
Authorized Signatory
9
EXHIBIT C
FORM OF TRUSTEES' AUTHENTICATION ORDER
__________, _____
Wilmington Trust Company
as Property Trustee
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Ladies and Gentlemen:
Reference is made to the Amended and Restated Declaration of Trust of First
American Capital Trust I, dated as of April 22, 1997 (the "Trust Agreement"),
among The First American Financial Corporation (the "Sponsor"), Wilmington Trust
Company, as Property Trustee (the "Property Trustee") and Delaware Trustee and
the Regular Trustees named therein, the resolution of the Finance Committee of
the Corporation's Chief Financial Officer to whom the Finance Committee
delegated certain authority, providing for the issuance of the Certificates
evidencing _______ Capital Securities (liquidation amount $1,000 per Capital
Security) and _____ Common Securities (liquidation amount $1,000 per Common
Security), there have been delivered to you _______ Capital Securities and
______ Common Securities in the liquidation amount of $___________. Please
authenticate such Capital Securities and hold the same as Property Trustee on
behalf of The Depository Trustee Company. Please authenticate such Common
Securities and hold the same as Property Trustee on behalf of the Sponsor.
Very truly yours,
THE FIRST AMERICAN CAPITAL TRUST
By:________________________
[Name]
Regular Trustee
By:________________________
Mark R Arnesen
Secretary