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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): OCTOBER 14, 1998
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NATIONWIDE FINANCIAL SERVICES, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-12785 31-1486870
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (614) 249-7111
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
Nationwide Financial Services, Inc. (the "Company") is filing
herewith the following exhibits in connection with the offering by Nationwide
Financial Services Capital Trust II of 8,000,000 7.10% Trust Preferred
Securities pursuant to the registration statement of the Company, Nationwide
Financial Services Capital Trust II and Nationwide Financial Services Capital
Trust III on Form S-3 (File No. 333-52813, 333-52813-01, 333-52813-02) filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
ITEM 7. EXHIBITS.
EXHIBIT
NUMBER EXHIBIT
1.1 Underwriting Agreement, dated as of October 14, 1998, between the
Company and Salomon Smith Barney Inc., A.G. Edwards & Sons, Inc.,
Morgan Stanley & Co. Incorporated, PaineWebber Incorporated, Prudential
Securities Incorporated, Credit Suisse First Boston Corporation and J.P.
Morgan Securities Inc., as representatives of the several underwriters
named therein.
4.1 Amended and Restated Declaration of Trust of
Nationwide Financial Services Capital Trust II, dated
as of October 19, 1998.
4.2 Subordinated Indenture, dated as of October 19, 1998, between the
Company and Wilmington Trust Company.
4.3 First Supplemental Indenture, dated as of October 19, 1998, between the
Company and Wilmington Trust Company.
4.4 Preferred Securities Guarantee Agreement, dated as of October 19, 1998
between the Company and Wilmington Trust Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONWIDE FINANCIAL SERVICES, INC.
Dated: October 23, 1998 By: /s/ Joseph J. Gasper
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Name: Joseph J. Gasper
Title: President, Chief Operating Officer
and Director
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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1.1 Underwriting Agreement, dated as of October 14, 1998, between
the Company and Salomon Smith Barney Inc., A.G. Edwards &
Sons, Inc., Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Prudential Securities Incorporated, Credit Suisse
First Boston Corporation and J.P. Morgan Securities Inc., as
representatives of the several underwriters named therein.
4.1 Amended and Restated Declaration of
Trust of Nationwide Financial Services
Capital Trust II, dated as of October
19, 1998.
4.2 Subordinated Indenture, dated as of October 19, 1998, between
the Company and Wilmington Trust Company.
4.3 First Supplemental Indenture, dated as
of October 19, 1998, between the Company
and Wilmington Trust Company.
4.4 Preferred Securities Guarantee
Agreement, dated as of October 19, 1998
between the Company and Wilmington Trust
Company.
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NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
(a Delaware Trust)
8,000,000 Securities
7.10% Trust Preferred Securities ("TRUPS"*)
(Liquidation Amount $25 per Preferred Security)
UNDERWRITING AGREEMENT
October 14, 1998
SALOMON SMITH BARNEY INC.
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
As Representatives of the Several Underwriters
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
1. Introductory. Nationwide Financial Services Capital Trust II (the
"Trust"), a statutory business trust organized under the Business Trust Act (the
"Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware
Code, 12 Del. C. Sections 3801 et seq.), and Nationwide Financial Services,
Inc., a Delaware corporation (the "Company" and, together with the Trust, the
"Offerors"), confirm their agreement with respect to the sale to the
Underwriters named in Schedule I hereto (the "Underwriters") for whom you (the
"Representatives") are acting as representatives, of 8,000,000 Preferred
Securities designated the 7.10% Trust Preferred Securities of the Trust (the
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*"TruPS" is a registered service mark of Salomon Smith Barney, Inc.
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"Preferred Securities"). To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires.
The Preferred Securities will be guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption and otherwise (the
"Preferred Securities Guarantee") to the extent set forth in the Preferred
Securities Guarantee Agreement (the "Preferred Securities Guarantee Agreement"),
dated as of October 19, 1998, between the Company and Wilmington Trust Company,
as trustee (the "Guarantee Trustee"), and in certain circumstances described in
the Final Prospectus (as defined herein), the Trust will distribute Subordinated
Debt Securities (as defined herein) of the Company to holders of Preferred
Securities. The 8,000,000 Preferred Securities to be purchased by the
Underwriters, together with the related Preferred Securities Guarantee, are
collectively referred to herein as the "Securities."
The Company, the Trust and Nationwide Financial Services Capital Trust
III (together with the Trust, the "Nationwide Trusts") have filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (File No. 333-52813) covering the registration of securities of the
Company and the Nationwide Trusts, including the Securities, under the
Securities Act of 1933, as amended (the "Act"), including the related
preliminary prospectus or prospectuses. Any reference herein to the Registration
Statement, the Basic Prospectus, a Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before
the Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, such Preliminary Final Prospectus or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 15 hereof.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Declaration (as defined herein), the Subordinated Indenture (as defined
herein), and the Preferred Securities Guarantee Agreement have been qualified
under the Trust Indenture Act. The entire proceeds from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its common securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"), as guaranteed
by the Company, to the extent set forth in the Final Prospectus, with respect to
distributions and payments upon liquidation and redemption (the "Common
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Securities Guarantee Agreement" and, together with the Preferred Securities
Guarantee Agreement, the "Guarantee Agreements") between the Company and the
Guarantee Trustee, as Trustee, and will be used by the Trust to purchase
$206,185,600 of 7.10% Junior Subordinated Deferrable Interest Debentures, due
October 31, 2028 (the "Subordinated Debt Securities") issued by the Company. The
Preferred Securities and the Common Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust (the "Declaration"),
among the Company, as Sponsor, Duane Campbell, David Diamond and Mark Thresher
(the "Regular Trustees"), Wilmington Trust Company, as property trustee (the
"Property Trustee"), and Delaware trustee (the "Delaware Trustee" and, together
with the Property Trustee and the Regular Trustees, the "Trustees"), and the
holders from time to time of undivided beneficial interests in the assets of the
Trust. The Subordinated Debt Securities will be issued pursuant to a
subordinated indenture, dated as of October 19, 1998, between the Company and
Wilmington Trust Company, as trustee (the "Subordinated Indenture Trustee"), (as
may be supplemented from time to time, the "Subordinated Indenture").
2. Representations and Warranties. The Offerors, jointly and severally,
represent and warrant to, and agree with, the several Underwriters that:
(a) The Company and the Nationwide Trusts meet the
requirements for use of Form S-3 under the Act and have prepared and
filed with the Commission the registration statement (File No.
333-52813) on Form S-3, including a related Basic Prospectus, for
registration under the Act of the offering and sale of the Securities.
The Offerors may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been
furnished to you. The Offerors will next file with the Commission one
of the following: (1) after the Effective Date of such registration
statement, a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b), (2) prior to the Effective Date
of such registration statement, an amendment to such registration
statement (including the form of final prospectus supplement) or (3) a
final prospectus in accordance with Rules 415 and 424(b). In the case
of clause (1), the Offerors have included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Final
Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Offerors
have advised you, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
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(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined below),
the Final Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the
Subordinated Indenture did or will comply in all material respects with
the requirements of the Trust Indenture Act and the rules thereunder;
and, on the Effective Date, the Final Prospectus, if not filed pursuant
to Rule 424(b), will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, the Final Prospectus (together
with any supplement thereto) will not, include any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
herein or in writing to the Offerors by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement
thereto).
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Final Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except to
the extent that the failure to so qualify or be in good standing would
not have a material adverse effect (i) on the condition, financial or
otherwise, business, properties or results of operations of the Company
and its subsidiaries taken as a whole, (ii) which affects the issuance
or validity of the Securities, (iii) which affects the consummation of
any of the transactions contemplated by this Agreement or (iv) is
otherwise material in the context of the sale of the Securities (a
"Material Adverse Effect").
(d) Each of Nationwide Life Insurance Company, an Ohio
corporation, Nationwide Life and Annuity Insurance Company, an Ohio
corporation, and any other subsidiary which is a "significant
subsidiary" as defined in Section 1.02(w) of Regulation S-X of the
Commission (collectively referred to herein as the "Significant
Subsidiaries" and individually as a "Significant Subsidiary"), has been
duly incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power
and authority to
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own its properties and conduct its business as described in the Final
Prospectus; and each Significant Subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except to the
extent that the failure to so qualify or be in good standing would not
have a Material Adverse Effect; and all of the issued and outstanding
capital stock of each Significant Subsidiary of the Company has been
duly authorized and validly issued and is fully paid and nonassessable
and is owned (directly or through subsidiaries) by the Company free
from liens, claims, encumbrances and defects.
(e) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Final Prospectus and to
enter into and perform its obligations under this Agreement, the
Preferred Securities, the Common Securities and the Declaration; the
Trust is duly qualified to transact business as a foreign company and
is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the business or
operations of the Trust; the Trust is not a party to or otherwise bound
by any agreement other than those described in the Final Prospectus;
the Trust is and will, under current law, be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. The Trust is not in violation of
the Declaration or its certificate of trust filed with the State of
Delaware on May 8, 1998 (the "Certificate of Trust").
(f) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Final Prospectus, will be validly issued and will represent undivided
beneficial interests in the assets of the Trust and will conform in all
material respects to the description thereof contained in the Final
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Date all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(g) The Declaration has been duly authorized by the Company
and, at the Closing Date, will have been duly executed and delivered by
the Company and the Trustees and, assuming due authorization, execution
and delivery of the Declaration by the Property Trustee and the
Delaware Trustee, the Declaration will, at the Closing Date, be a valid
and binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws of general
applicability relating to or affecting creditors' rights generally or
by general principles of equity
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and will conform in all material respects to the description thereof
contained in the Final Prospectus.
(h) Each of the Guarantee Agreements has been duly authorized
by the Company and, when validly executed and delivered by the Company,
and, in the case of the Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Preferred
Securities Guarantee by the Guarantee Trustee, will constitute a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and general equity
principles, and each of the Guarantees and the Guarantee Agreements
will conform in all material respects to the description thereof
contained in the Final Prospectus.
(i) The Preferred Securities have been duly authorized for
issuance and sale to the Underwriters and, when issued and delivered
against payment therefor as provided herein, will be validly issued and
fully paid and non-assessable undivided beneficial interests in the
assets of the Trust and will conform in all material respects to the
description thereof contained in the Final Prospectus; the issuance of
the Preferred Securities is not subject to preemptive or other similar
rights.
(j) The Subordinated Indenture has been duly authorized by
the Company and has been duly qualified under the Trust Indenture Act
with respect to the Subordinated Debt Securities registered thereby;
the Subordinated Debt Securities have been duly authorized by the
Company, and when the Subordinated Debt Securities are delivered and
paid for as described in the Final Prospectus, the Subordinated
Indenture will have been duly executed and, assuming due authorization,
execution and delivery thereof by the Trustee, delivered and will
constitute a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws of general applicability relating to or affecting
creditor's rights and to general equity principles, and such
Subordinated Debt Securities will have been duly executed, and, when
authenticated in the manner provided for in the Subordinated Indenture
and delivered against payment therefore as described in the Final
Prospectus, will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and will conform in
all material respects to the description thereof contained in the Final
Prospectus.
(k) Except as disclosed in the Final Prospectus, there are no
contracts, agreements or understandings between either of the Offerors
and any person that would give rise to a valid claim against either
such Offeror or any Underwriter for
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a brokerage commission, finder's fee or other like payment in
connection with the offering of the Securities.
(l) Except as set forth in the Intercompany Agreement filed
as Exhibit 3.3 to the Registration Statement (the "Intercompany
Agreement"), there are no contracts, agreements or understandings
between the Offerors and any person granting such person the right to
require the Offerors to file a registration statement under the Act
with respect to any securities of the Offerors owned or to be owned by
such person or to require the Offerors to include such securities in
the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Act.
(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or court is required for
the consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Securities by the
Offerors, except such as have been obtained under the Act, the Exchange
Act, the rules and regulations of the Commission (the "Rules and
Regulations"), the by-laws of the National Association of Securities
Dealers, Inc. ("NASD") and the Trust Indenture Act and such as may be
required under foreign or state securities laws (including insurance
securities laws).
(n) This Agreement has been duly authorized, executed and
delivered by each of the Offerors and constitutes the valid and binding
obligation of each of the Offerors enforceable in accordance with its
terms (except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting creditors' rights
generally and by general principles of equity, except that the remedies
of specific performance and injunctive and other forms of equitable
relief are subject to the discretion of the court before which any
proceeding therefor may be brought and except with respect to the
obligations of the Offerors regarding indemnification and contribution
as provided in Section 7 below).
(o) None of the execution, delivery and performance of this
Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Subordinated Indenture, the Subordinated Debt
Securities, the Guarantee Agreements and the Guarantees and the
consummation of the transactions contemplated herein and therein and
compliance by the Offerors with their respective obligations hereunder
and thereunder did or will result in a breach or violation of any of
the terms or provisions of, or constitute a default under or require
the consent of any party under the Certificate of Trust of the Trust or
the amended and restated certificate of incorporation or bylaws of the
Company or the articles or amended articles of incorporation and code
of regulations or bylaws, as the case may be, of any Significant
Subsidiary, any contract, indenture, mortgage, note, lease, agreement
or other instrument to which either the Trust, the Company or any of
its Significant Subsidiaries is a party or by which any of them may be
bound, or any applicable law, rule or regulation or any judgment,
order or
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decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, the Company or
any of its Significant Subsidiaries or any of their respective
properties or assets, or did or will result in the creation or
imposition of any lien on the properties or assets of the Trust, the
Company or any of its Significant Subsidiaries except for such
breaches, conflicts, violations or defaults which would not have a
Material Adverse Effect. The Offerors have full power and authority to
authorize, issue and sell the Securities and to consummate the
transactions contemplated by the Subordinated Indenture and this
Agreement, respectively.
(p) Except as disclosed in the Final Prospectus, the Company
and its Significant Subsidiaries have good and marketable title to all
real properties and all other properties and assets owned by them, in
each case free from liens, encumbrances, claims and defects, except
where the failure to possess such title would not have a Material
Adverse Effect; and except as disclosed in the Final Prospectus, the
Company and its Significant Subsidiaries hold any leased real or
personal property under valid and enforceable leases, except where the
failure to hold such property under such leases would not have a
Material Adverse Effect.
(q) The Company and its Significant Subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, service marks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or presently employed by them, except
where the failure to own or possess such intellectual property rights
or where the inability to acquire such intellectual property rights on
reasonable terms would not have a Material Adverse Effect, and have not
received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights (including,
without limitation, "The Best of America(R)" service mark) that, if
determined adversely to the Company or any of its Significant
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect. Nationwide Life Insurance Company is the owner, free
and clear of any lien, claim or encumbrance of any kind, of the service
mark "The Best of America(R)", which is a registered federal service
mark.
(r) The Company and each of its Significant Subsidiaries hold
all licenses, certificates and permits from governmental authorities
(including, without limitation, insurance licenses from the Insurance
Departments of the various states in which the Significant Subsidiaries
write insurance business (the "Insurance Licenses")) which are
necessary to the conduct of their respective businesses, except where
the failure to hold such licenses, certificates or permits would not
have a Material Adverse Effect; the Company's Significant Subsidiaries
that are insurance companies have fulfilled and performed all
obligations necessary to maintain their respective Insurance Licenses,
except where the failure to perform such obligations would not have a
Material Adverse Effect; and no event or events have occurred which may
be reasonably expected to result in any impairment, modification,
termination or revocation of such
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Insurance Licenses which individually or in the aggregate would have a
Material Adverse Effect.
(s) Except as disclosed in the Final Prospectus, neither the
Company nor any of its Significant Subsidiaries is in violation of any
statute, rule, regulation, decision or order of any governmental agency
or body or court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and to the Company's
knowledge, there is no pending investigation which might lead to such a
claim.
(t) Except as disclosed in the Final Prospectus, there are no
pending actions, suits or proceedings (including, without limitation,
any proceeding to revoke or deny renewal of any Insurance License)
against or affecting the Company, any of its Significant Subsidiaries
or any of their respective properties that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and no such actions, suits or
proceedings (including, without limitation, any proceeding to revoke or
deny renewal of any Insurance License) are, to the Company's knowledge,
threatened or contemplated.
(u) The consolidated financial statements and the notes
thereto included in the Registration Statement and the Final Prospectus
present fairly in all material respects, the financial position of the
Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Final Prospectus and in any
documents incorporated therein by reference as being prepared in
accordance with the Statutory Accounting Practices (as hereinafter
defined) or in the notes thereto, such financial statements have been
prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis; and the
schedules included in the Registration Statement present fairly in all
material respects the information required to be stated therein; and
the assumptions used in preparing any pro forma financial information
included in the Registration Statement, the Final Prospectus and any
documents incorporated therein by reference provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those
adjustments in the corresponding historical financial statement
amounts.
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(v) Except as disclosed in the Final Prospectus, since the
date of the latest audited financial statements included in the Final
Prospectus there has been no change, nor any development or event
involving a prospective change, which has had, or would reasonably be
expected to have, a Material Adverse Effect, and, except as disclosed
in or contemplated by the Final Prospectus, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(w) The Company is not and, after giving effect to the sale of
the Securities and the application of the proceeds thereof as described
in the Final Prospectus, will not be, an "investment company" or an
entity "controlled" by an "investment company" required to be
registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
(x) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes.
(y) The statutory financial statements of each of the
Significant Subsidiaries that is an insurance company, from which
certain ratios and other statistical data contained or incorporated by
reference in the Registration Statement have been derived, have for
each relevant period been prepared in accordance with accounting
practices and procedures of the National Association of Insurance
Commissioners ("NAIC"), as prescribed or permitted by the Department of
Insurance of the State of Ohio (the "Statutory Accounting Practices");
and such accounting practices have been applied on a consistent basis
throughout the periods involved, except as disclosed therein.
(z) The Company has filed an application to list the
Securities on the New York Stock Exchange ("NYSE") and will have
received by the Closing Date notification that such listing has been
approved subject to notice of issuance. The Securities will be
registered under the Securities Exchange Act of 1934, as amended, prior
to or concurrently with the offering of the Securities.
(aa) Each of the Significant Subsidiaries that is an
insurance company has duly and validly filed or caused to be filed all
material reports, statements, documents, registrations, filings or
submissions that were required by applicable Laws (as defined below) to
be filed; all such filings complied with all applicable Laws in all
material respects when filed, and no material deficiencies have been
asserted with respect to any such filings which have not been
satisfied. All outstanding insurance policies, annuity contracts and
assumption certificates issued by any such Significant Subsidiary and
now in force are, to the extent required under applicable Laws, on
forms approved by the insurance regulatory authority of the
jurisdiction where issued and utilize premium rates which if required
to be filed with or approved by insurance regulatory authorities have
been so filed or approved, except where the failure to use approved
forms or to
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<PAGE> 11
file or have approved such premium rates would not have a Material
Adverse Effect, and the premiums charged conform thereto, except where
the failure to conform would not have a Material Adverse Effect.
(bb) Each of the Significant Subsidiaries that is a
broker/dealer, where applicable, is registered with the Commission and
with each other governmental authority with which it is required to
register in order to conduct its business as now conducted, and is in
compliance with all applicable United States federal, state, local or
foreign statutes, laws, ordinances, regulations, rules, codes, orders,
permits, other requirements or rules of law (collectively, the "Laws"),
except where the failure to comply would not have a Material Adverse
Effect. Such Significant Subsidiaries have filed all forms, reports,
statements and other documents required by Law to be filed by them with
the Commission, all other reports (periodic or otherwise) and
registration statements, including, without limitation, in connection
with sales of variable annuity or variable life contracts, and all
amendments and supplements to all such reports and registration
statements, and all such forms, reports, statements and other documents
did not at the time they were filed (at the time they became effective
and so long as they remain effective in the case of registration
statements and amendments thereto) contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(cc) Each of the separate accounts of the Significant
Subsidiaries that is an insurance company that is required to be
registered as an investment company under the 1940 Act is so
registered. All forms, reports, statements and other documents required
by Law to be filed with the Commission by or on behalf of each of the
separate accounts of such Significant Subsidiaries, including, without
limitation, all registration statements and all amendments and
supplements to all such registration statements, in connection with
sales of variable life insurance policies and variable annuity
contracts, have been so filed by or on behalf of such separate
accounts, and all such forms, reports, statements and other documents,
including, without limitation, those to be filed after the date hereof,
did not at the time they were filed (at the time they become effective
and so long as they remain effective in the case of registration
statements and amendments thereto), or will not at the time they are
filed (at the time they become effective and so long as they remain
effective in the case of registration statements and amendments
thereto), contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(dd) Except as set forth in the Final Prospectus, and with
respect to all insurance issued:
(i) No outstanding insurance policy or annuity
contract issued or assumed by any of the Company's Significant
Subsidiaries that is an
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<PAGE> 12
insurance company entitles the holder thereof or any other Person (as
defined below) to receive dividends, distributions or other benefits
based on the revenues or earnings of the Company or such Significant
Subsidiary that is an insurance company or any other individual,
partnership, firm, corporation, association, trust, unincorporated
organization, governmental authority or other entity, as well as any
syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act (each, a "Person").
(ii) To the Company's knowledge and the knowledge of
each of the Significant Subsidiaries that is an insurance
company, no other party to any reinsurance, coinsurance or
other similar agreement with any such Significant Subsidiary
that is an insurance company is in default thereunder, except
for such defaults that would not reasonably be expected to
have a Material Adverse Effect.
(iii) Each annuity contract issued by any of the
Significant Subsidiaries that is an insurance company
qualifies as an annuity contract under Section 72 of the
Internal Revenue Code of 1986, as amended through the date
hereof, except where the failure to so qualify would not have
a Material Adverse Effect.
Any certificate required hereunder to be signed by any officer
of the Company or Regular Trustees of the Trust and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company
or the Trust, as the case may be, as to matters covered thereby, to each
Underwriter.
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Offerors agree to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Trust, at a purchase price of $25.00 per share, the respective number
of Securities set forth opposite the names of the Underwriters in Schedule I
hereto.
Delivery of and payment for the Securities shall be made on
October 19, 1998 at 10:00 AM, New York City time, or at such time on such later
date not more than three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Offerors or as provided in Section
8 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Offerors by wire transfer
payable in same-day funds to an account specified by the Offerors. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
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<PAGE> 13
The Company agrees that, in view of the fact that the proceeds
of the sale of the Securities will be invested in the Subordinated Debt
Securities of the Company, it shall pay to the Underwriters as compensation
("Underwriters' Compensation") for their arranging the investment of the
proceeds therein, on the Closing Date, $0.7875 per Preferred Security.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Certain Agreements of the Offerors. The Offerors agree with the
several Underwriters that:
(a) The Offerors will use their respective best efforts to
cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereof, to become effective. Prior to the
termination of the offering of the Securities, the Offerors will not
file any amendment of the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to
the Basic Prospectus or any Rule 462(b) Registration Statement unless
the Offerors have furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which
you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Final Prospectus is otherwise required under
Rule 424(b), the Offerors will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Offerors will promptly
advise the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Final Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (6) of the receipt by either of the
Offerors of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Offerors will use their respective best efforts to prevent the issuance
of any such stop order or the suspension of any such qualification and,
if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or
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<PAGE> 14
dealer, any event occurs as a result of which the Final Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or Exchange Act, the Offerors will promptly (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, at the Company's expense, an amendment or supplement which
will correct such statement or omission or effect such compliance, and
(3) supply any supplemented Final Prospectus to you in such quantities
as you may reasonably request. Neither your consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives hard
copies of the Registration Statement (four of which will be signed and
include all exhibits), copies of each EDGAR filing of each Registration
Statement (and confirmations for each EDGAR filing of each Registration
Statement), each preliminary prospectus relating to the Securities,
and, so long as delivery of a prospectus relating to the Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Final Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
Salomon Smith Barney requests (at the expense of such Underwriter at
any time nine months or more after the time of issue of the Final
Prospectus). The Final Prospectus shall be so furnished on the business
day following the later of the execution and delivery of this Agreement
or the Effective Time of the Registration Statement. All other
documents shall be so furnished as soon as available. Except as set
forth above, the Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(e) The Offerors will use their respective best efforts, in
cooperation with the Underwriters, to arrange for the qualification of
the Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representatives
may designate and will maintain such qualifications in effect so long
as required for the distribution; provided, however, that neither of
the Offerors shall be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(f) During the period of three years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, (i) as
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<PAGE> 15
soon as practicable after the end of each fiscal year, a copy of its
annual report to stockholders for such year, (ii) as soon as available,
a copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to
stockholders, and (iii) from time to time, such other information as
shall be furnished by the Company to its stockholders generally and as
shall be reasonably requested by the Representatives.
(g) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters (if and to the extent incurred by them) for any filing
fees and other expenses (including reasonable fees and disbursements of
counsel) incurred by them in connection with qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate and the printing of memoranda relating
thereto, for the filing fee incident to the review by the NASD of the
Securities and approval of the transactions contemplated hereby by the
NASD, for any travel expenses of the Company's officers and employees
and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Securities and for
expenses incurred in distributing Preliminary Final Prospectuses and
Final Prospectuses (including any amendments and supplements thereto)
to the Underwriters.
(h) The Offerors will notify Salomon Smith Barney of any
material adverse change affecting any of their representations,
warranties, agreements and indemnities herein at any time prior to
payment to the Trust on the Closing Date.
(i) The Trust will use the proceeds received by it from the
sale of the Securities, and the Company will use the net proceeds
received by it from the sale of the Subordinated Debt Securities, in
the manner specified in the Final Prospectus under the caption "Use of
Proceeds."
(j) The Company and the Trust will use its best efforts to
list the Securities on the NYSE subject to notice of issuance and to
register the Securities under the Exchange Act.
(k) The Company shall comply with Section 517.075, Florida
Statutes, if prior to the completion of the distribution of the
Securities it or any of its affiliates commences doing business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes.
(l) Until November 13, 1998, neither of the Offerors will,
without the prior written consent of Salomon Smith Barney, offer, sell
or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by either of
the Offerors or any affiliate thereof or any person in privity with
either of the Offerors or any affiliate thereof) directly or
indirectly, or announce the offering of, any preferred securities or
preferred stock or any other securities (including
15
<PAGE> 16
any backup undertakings of such preferred stock or other securities) of
either of the Offerors, in each case, that are substantially similar to
the Preferred Securities, or any securities convertible into, or
exchangeable for the Preferred Securities or any such substantially
similar securities.
(m) The Offerors will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company or the Trust to facilitate the sale or resale of the
Securities.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Offerors herein, to the accuracy of the statements
of the Offerors made pursuant to the provisions hereof, to the performance by
the Offerors of their respective obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which shall be on or prior to the date of this Agreement) of
KPMG Peat Marwick LLP confirming that they are independent public accountants
within the meaning of the Act and the applicable published Rules and Regulations
thereunder and stating in effect, except as provided in Schedule I hereto, that:
(i) in their opinion the financial statements and schedules
audited by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
Rules and Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements
included or incorporated by reference in the
Registration Statement do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published
Rules and Regulations with respect to financial
statements included or incorporated by reference in
quarterly reports on Form 10-Q under the Exchange Act
or any material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
16
<PAGE> 17
statements included or incorporated by reference in
the Registration Statement and the Final Prospectus;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the common stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries, or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated invested assets, total assets or
stockholders' equity as compared with amounts shown
on the latest balance sheet included or incorporated
by reference in the Registration Statement and the
Final Prospectus; or
(C) for the period from the closing date of
the latest income statement included or incorporated
by reference in the Registration Statement and the
Final Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period for the previous year and with
the period of corresponding length ended the date of
the latest income statement included or incorporated
by reference in the Registration Statement and the
Final Prospectus, in the total or per share amounts
of total revenues or consolidated net income or in
the ratio of earnings to fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Preliminary Final or
Final Prospectus discloses have occurred or may occur or which
are described in such letter;
(iii) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information contained in the Registration Statement
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter;
(iv) they have examined the statutory financial
statements of each of the Company's insurance subsidiaries,
from which certain ratios and other
17
<PAGE> 18
statistical data contained in the Registration Statement have
been derived, and in their opinion such statements, with
respect to each such insurance subsidiary, have for each
relevant period been prepared in accordance with accounting
practices prescribed or permitted by the appropriate Insurance
Department of the state of domicile of such subsidiary, except
as disclosed therein;
(v) with respect to any pro forma financial
information included or incorporated by reference in the
Registration Statement, they have performed the procedures
specified by the American Institute of Certified Public
Accountants Statement on Standards for Attestation Engagements
No. 1, "Reporting on Pro Forma Financial Statements"; and
(vi) on the basis of the procedures referred to in
clause (v) above, inquiries of officials of the Company who
have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention
that caused them to believe that any pro forma financial
information and statements included or incorporated by
reference in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published Rules and Regulations or any material modifications
should be made to such pro forma financial information and
statements for them to be in accordance with such requirements
and generally accepted accounting principles.
(b) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(c) Subsequent to the execution and delivery of this
Agreement or, if earlier, the dates as of which information is given in
the Registration Statement (exclusive of any amendment thereof) and the
Final Prospectus (exclusive of any supplement thereto), there shall not
have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business,
properties or results of operations of the Company or its subsidiaries
which, in the judgment of a majority in interest of the
Representatives, is material and adverse and makes it impractical or
inadvisable to
18
<PAGE> 19
proceed with the completion of the public offering or sale of and
payment for the Securities; (ii) any downgrading in the rating of any
debt securities or preferred securities (including trust preferred
securities of any trust affiliated with the Company) of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
following the date hereof that any such organization has under
surveillance or review its rating of any debt securities or preferred
securities (including trust preferred securities of any trust
affiliated with the Company) of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication
of a possible downgrading, of such rating) or any downgrading of the
financial and operating performance of the Company's insurance
subsidiaries by A.M. Best Company that results in the Company's
insurance subsidiaries being rated lower than A- (Excellent); (iii) any
suspension or limitation of trading in securities generally on the
NYSE, or any setting of minimum prices for trading on such exchange or
system, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (iv) any banking
moratorium declared by U.S. Federal or New York authorities; (v) any
material change or decrease specified in the letter referred to in
paragraph (j) of this Section 6 from the letter referred to in
paragraph (a) of this Section 6; or (vi) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Representatives, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of LeBoeuf, Lamb, Greene & MacRae, L.L.P., special
counsel for the Company, to the effect that:
(i) the Company is an existing corporation in good
standing under the laws of the state of its incorporation,
with corporate power and authority to own its properties and
conduct its business as described in the Final Prospectus;
(ii) the Subordinated Indenture has been duly
authorized by the Company and has been duly qualified under
the Trust Indenture Act with respect to the Subordinated Debt
Securities registered thereby; the Subordinated Debt
Securities have been duly authorized by the Company, and when
the Subordinated Debt Securities are delivered and paid for as
described in the Final Prospectus, the Subordinated Indenture
will have been duly executed and, assuming due authorization,
execution and delivery thereof by the Trustee, delivered and
will constitute a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general applicability
19
<PAGE> 20
relating to or affecting creditor's rights and to general
equity principles, and such Subordinated Debt Securities will
have been duly executed, and, when authenticated in the manner
provided for in the Subordinated Indenture and delivered
against payment therefore as described in the Final
Prospectus, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles and will conform to
the description thereof contained in the Final Prospectus;
(iii) the execution, delivery and performance of this
Agreement, the Declaration, the Preferred Securities, the
Common Securities, the Subordinated Indenture, the
Subordinated Debt Securities, the Guarantee Agreements and the
Guarantees by the Company will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default under, the amended and restated certificate of
incorporation or bylaws of the Company;
(iv) the Company and each of the Nationwide Trusts
meet the requirements for use of Form S-3 under the
regulations of the Act; the Registration Statement has become
effective under the Act; any required filing of the Basic
Prospectus, any Preliminary Final Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose
have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and schedules and other financial and statistical
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules
thereunder;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the statements in the Basic Prospectus and the
Final Prospectus under the captions "Description of the
Preferred Securities," "Description of the Junior Subordinated
Debentures," "Description of Guarantee," "Relationship Among
the Preferred Securities, the Junior Subordinated Debt
Securities and the Guarantees," "Description of the Debt
Securities," "Description of the Trust Preferred Securities"
and "Description of the Preferred Securities Guarantee",
insofar as they purport to constitute summaries of the terms
of the documents referred to therein, fairly summarize the
terms of such documents or fairly and accurately present
20
<PAGE> 21
the information disclosed therein in all material respects;
the statements in the Final Prospectus under the heading
"Certain Federal Income Tax Considerations" are true and
correct in all material respects;
(vii) neither the Company nor the Trust is, and after
giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the
Final Prospectus will be, an "investment company" or an entity
"controlled" by an "investment company" as defined under the
Investment Company Act of 1940;
(viii) the Declaration has been duly authorized,
executed and delivered by the Company and the Regular
Trustees; and the Declaration has been duly qualified under
the Trust Indenture Act;
(ix) the Subordinated Debt Securities, each of the
Guarantees, the Subordinated Indenture and each of the
Guarantee Agreements conform in all material respects to the
descriptions thereof contained in the Final Prospectus;
(x) each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company; the
Preferred Securities Guarantee Agreement, assuming it is duly
authorized, executed, and delivered by the Guarantee Trustee,
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Preferred Securities
Guarantee Agreement has been duly qualified under the Trust
Indenture Act;
(xi) the Company has filed an application to list the
Securities on the NYSE and has received notification that such
listing has been approved subject to notice of issuance and
the Securities have been registered under the Exchange Act.
Such counsel also shall state that no facts have come to the attention
of such counsel that have caused it to believe that on the Effective Date or at
the Execution Time the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Final Prospectus as of its date and on the Closing Date included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and schedules and other financial and statistical
information contained therein, as to which such counsel need express no
opinion).
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<PAGE> 22
In making the statement referred to in the preceding paragraph, such
counsel shall state that their opinion and the belief are based upon their
participation in the preparation of the Registration Statement, the Preliminary
Final Prospectus and Final Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.
In rendering the foregoing opinions, such counsel may rely as to
matters of fact upon certificates of the officers of the Company and its
subsidiaries, as to matters involving good standing, authorization to do
business and other matters within their knowledge, upon certificates of public
officials, and, as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United States, upon
opinions of local counsel, which opinions shall state that they believe both you
and they are justified in relying upon such certificates and opinions.
(e) The Representatives shall have received an
opinion, dated such Closing Date, from W. Sidney Druen,
general counsel to the Company to the effect that:
(i) each of the Company's Significant Subsidiaries
is an existing corporation in good standing under the laws of
the state of its incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Final Prospectus; and the Company and each of
the Company's Significant Subsidiaries is duly qualified to do
business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such
qualification, except to the extent that the failure to so
qualify or be in good standing would not have a Material
Adverse Effect; and all of the issued and outstanding capital
stock of each Significant Subsidiary of the Company has been
duly authorized and validly issued and is fully paid and
nonassessable and is owned (directly or through subsidiaries)
by the Company free from liens, claims, encumbrances and
defects;
(ii) except for the Intercompany Agreement, there
are no contracts, agreements or understandings between the
Offerors and any person granting such person the right to
require the Offerors to file a registration statement under
the Act with respect to any securities of the Offerors owned
or to be owned by such person or to require the Offerors to
include such securities in the securities registered pursuant
to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed
by the Offerors under the Act;
(iii) no consent, approval, authorization or order
of, or filing with, any U.S. Federal or state governmental
agency or body or court is required for the consummation by
the Company of the transactions contemplated by this Agreement
in connection with the issuance or sale of the Securities by
the Offerors, except such as have been obtained and made under
the
22
<PAGE> 23
General Corporation Law of Delaware, the Act, the Exchange
Act, the Rules and Regulations, the by-laws of the NASD, or
the Trust Indenture Act and such as may be required under any
federal or state laws;
(iv) none of the execution, delivery and performance
of this Agreement, the Declaration, the Preferred Securities,
the Common Securities, the Subordinated Indenture, the
Subordinated Debt Securities, the Guarantee Agreements and the
Guarantees, and the consummation of the transactions
contemplated herein and therein, and compliance by the
Offerors with their respective obligations hereunder and
thereunder, did or will result in a breach or violation of any
of the terms or provisions of, or constitute a default under,
or require the consent of any party under the articles or
amended articles of incorporation and code of regulations or
bylaws, as the case may be, of any Significant Subsidiary, any
contract, indenture, mortgage, note, lease, agreement or other
instrument to which either the Trust, the Company or any of
its Significant Subsidiaries is a party or by which any of
them may be bound, or any applicable law, Rule or Regulation
or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Trust, the Company or any of its
Significant Subsidiaries or any of their respective properties
or assets, or did or will result in the creation or imposition
of any lien on the properties or assets of the Trust, the
Company or any of its Significant Subsidiaries except for such
breaches, conflicts, violations or defaults which would not
have a Material Adverse Effect;
(v) each of the documents incorporated by reference
in the Registration Statement or the Final Prospectus at the
time they were filed or last amended (other than the financial
statements and the notes thereto, the financial schedules, and
any other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no belief) complied as to form in all material
respects with the requirements of the Exchange Act; and such
counsel has no reason to believe that any of such documents,
when such documents were last amended or were so filed, as the
case may be, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein not misleading;
(vi) the Company and each of its Significant
Subsidiaries hold all licenses, certificates and permits from
all governmental authorities (including, without limitation,
Insurance Licenses) which are necessary to the conduct of
their respective businesses, except where the failure to hold
such licenses, certificates or permits would not have a
Material Adverse Effect; the Company's Significant
Subsidiaries that are insurance companies have fulfilled and
performed all obligations necessary to maintain their
respective Insurance Licenses, except where the failure to
perform such obligations would not have a Material Adverse
Effect; and
23
<PAGE> 24
no event or events have occurred which may be reasonably
expected to result in any impairment, modification,
termination or revocation of such Insurance Licenses which
individually or in the aggregate would have a Material Adverse
Effect;
(vii) all of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
In rendering the foregoing opinions, such counsel may rely as to
matters of fact upon certificates of the officers of the Company and its
Significant Subsidiaries, as to matters involving good standing, authorization
to do business and other matters within their knowledge, upon certificates of
public officials, and, as to matters involving the application of laws of any
jurisdiction other than the State of Ohio or the United States, upon the
familiarity of attorneys employed by the Nationwide Mutual Insurance Company,
the ultimate controlling entity of the Company, under such counsel's supervision
with the relevant laws of other jurisdictions.
(f) The Company shall have furnished to the Representatives
the opinion of Richards, Layton & Finger, P.A., special Delaware
counsel to the Offerors, dated the Closing Date and addressed to the
Representatives to the effect that:
(i) the Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Act, and all filings required under the laws of the
state of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made;
(ii) under the Delaware Act and the Declaration, the
Trust has the trust power and authority to own property and
conduct its business, all as described in the Final
Prospectus;
(iii) the Declaration constitutes a valid and
binding obligation of the Company and the Trustees and is
enforceable against the Company and the Trustees in accordance
with its terms, subject, as to enforcement, to (i) bankruptcy,
insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or transfer and other
similar laws relating to or affecting the rights and remedies
of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at
law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution;
(iv) under the Delaware Act and the Declaration, the
Trust has the trust power and authority to (i) execute and
deliver, and to perform its obligations under, this Agreement
and (ii) issue, and perform its obligations under, the Trust
Securities;
24
<PAGE> 25
(v) under the Delaware Act and the Declaration, the
execution and delivery by the Trust of this Agreement, and the
performance by the Trust of its obligations hereunder have
been duly authorized by all necessary trust action on the part
of the Trust;
(vi) under the Delaware Act, the certificate
attached to the Declaration as Exhibit A-l is an appropriate
form of certificate to evidence ownership of the Preferred
Securities; the Trust Securities have been duly authorized by
the Declaration and are duly and validly issued and, subject
to qualifications hereinafter expressed in this paragraph
(vi), fully paid and nonassessable undivided beneficial
interests in the assets of the Trust; the holders of the
Preferred Securities, as beneficial owners of the Trust, will
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; said counsel may note that the holders of the
Preferred Securities may be obligated to make payments as set
forth in the Declaration;
(vii) the Common Securities have been duly authorized
by the Declaration and are duly and validly issued and
represent undivided beneficial interests in the assets of the
Trust;
(viii) under the Delaware Act and the Declaration,
the issuance of the Trust securities is not subject to
preemptive rights;
(ix) the issuance and sale by the Trust of the Trust
Securities, the purchase by the Trust of the Subordinated Debt
Securities, the execution, delivery and performance by the
Trust of this Agreement, the consummation by the Trust of the
transactions contemplated hereby and compliance by the Trust
with its obligations hereunder and thereunder will not violate
(i) any of the provisions of the Certificate of Trust or the
Declaration or (ii) any applicable Delaware law or
administrative regulation; and
(x) with respect to the statements made in the Final
Prospectus under the caption "Description of the Preferred
Securities," insofar as such statements are statements of
Delaware law, such statements are fairly presented.
(g) The opinion of Richards, Layton & Finger, P.A., counsel to
Wilmington Trust Company as Property Trustee under the Declaration, and
Guarantee Trustee under the Preferred Securities Guarantee Agreement,
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) Wilmington Trust Company is a Delaware banking
corporation with trust powers, duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware;
25
<PAGE> 26
(ii) the execution, delivery and performance by
Wilmington Trust Company of the Declaration, the Preferred
Securities Guarantee Agreement and the Subordinated Indenture
have been duly authorized by all necessary corporate action on
the part of the Wilmington Trust Company. The Declaration, the
Preferred Securities Guarantee Agreement and the Subordinated
Indenture have been duly executed and delivered by the
Wilmington Trust Company;
(iii) the execution, delivery and performance of the
Declaration, the Preferred Securities Guarantee Agreement and
the Subordinated Indenture by the Wilmington Trust Company are
not prohibited by (i) the Charter or Bylaws of Wilmington
Trust Company, or (ii) to the knowledge of such counsel, any
other agreements or instruments to which Wilmington Trust
Company is a party or by which Wilmington Trust Company is
bound or any judgments, orders, or decrees applicable to
Wilmington Trust Company; and
(iv) no consent, approval or a authorization of, or
registration with or notice to, any banking authority in the
State of Delaware or the United States of America governing
the trust powers of Wilmington Trust Company is required for
the execution, delivery or performance by Wilmington Trust
Company of the Declaration, the Preferred Securities Guarantee
Agreement and the Subordinated Indenture.
(h) The Representatives shall have received from Dewey
Ballantine LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Final Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, Dewey Ballantine LLP may rely
as to matters governed by the laws of the states in which such counsel
is not licensed to practice upon the opinions of local counsel.
(i) The Representatives shall have received (i) a certificate
of the President or any Vice-President and a principal financial or
accounting officer of the Company and (ii) a certificate of the Trust
signed by one Regular Trustee, in each case dated the Closing Date, in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company or the Trust, as the case may be, in this Agreement are
true and correct in all material respects (except for representations
and warranties which are qualified by materiality, Material Adverse
Effect or similar qualifiers, which shall be true and correct in all
respects); the Company or the Trust, as the case may be, complied with
all agreements and satisfied all conditions on its part to be performed
or satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness of the Registration Statement has been
issued
26
<PAGE> 27
and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Rule 462(b) Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) of
Rule 462(b) was filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) under the
Act, prior to the time the Final Prospectus was printed and distributed
to any Underwriter; and, subsequent to the date of the most recent
financial statements incorporated by reference in the Registration
Statement and the Final Prospectus, there has been no change, nor any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries which has or could reasonably be
expected to have a Material Adverse Effect, except as set forth in or
contemplated by the Final Prospectus or as described in such
certificate.
(j) The Representatives shall have received a letter, dated
such Closing Date, from KPMG Peat Marwick LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three business days prior to such Closing Date for the purposes of
this subsection.
(k) The Securities to be sold by the Trust at the Closing Date
shall have been duly listed on the NYSE subject to notice of issuance
and shall have been registered under the Exchange Act.
(l) At the Closing Date, the Preferred Securities shall be
rated in one of the four highest rating categories for long term debt
("Investment Grade") by any nationally recognized statistical rating
agency, and the Trust shall have delivered to the Underwriters a
letter, dated the Closing Date, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Preferred Securities have Investment
Grade ratings.
The Company will furnish the Representatives with such conformed copies
of such opinions, certificates, letters and documents as the Representatives may
reasonably request. Salomon Smith Barney may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder.
7. Indemnification and Contribution
(a) The Offerors agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions
27
<PAGE> 28
in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities as
originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Offerors will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Offerors by or on
behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any
liability which the Offerors may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Offerors, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls the Offerors within the meaning
of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Offerors to each Underwriter, but only
with reference to written information relating to such Underwriter
furnished to the Offerors by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise
have. The Offerors acknowledge that the statements set forth in the
last paragraph of the cover page regarding delivery of the Securities,
the legend in block capital letters on page S-2 related to
stabilization, syndicate covering transactions and penalty bids and,
under the heading "Underwriting" or "Plan of Distribution," (i) the
sentences related to concessions and reallowances and (ii) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Final Prospectus and the Final
Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary
Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified
28
<PAGE> 29
party other than the indemnification obligation provided in paragraph
(a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party
in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Offerors and the
Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Offerors and one or more of the
Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand
and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating
to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Offerors and the Underwriters severally shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of
29
<PAGE> 30
the Offerors on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Offerors shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it,
and benefits received by the Underwriters shall be deemed to be equal
to the total Underwriters' Compensation received by the Underwriters,
in each case as set forth on the cover page of the Final Prospectus.
Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information provided by the Offerors on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Offerors and the Underwriters
agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who
controls the Offerors within the meaning of either the Act or the
Exchange Act, each officer of the Offerors who shall have signed the
Registration Statement and each director of the Offerors shall have the
same rights to contribution as the Offerors, subject in each case to
the applicable terms and conditions of this paragraph (d).
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Securities hereunder on the Closing Date and
the aggregate principal amount of Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the aggregate
number of Securities that the Underwriters are obligated to purchase on such
Closing Date, Salomon Smith Barney may make arrangements satisfactory to the
Offerors for the purchase of such Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by such Closing Date the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate principal amount of
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to Salomon Smith
Barney and the Offerors for the purchase of such Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Offerors,
except as provided in Section 9. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
30
<PAGE> 31
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Offerors and their respective officers and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter, the Offerors or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Offerors and the Underwriters pursuant
to Section 7 shall remain in effect, and if any Securities have been purchased
hereunder, the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv) or (vi) of Section 6(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o Salomon Smith Barney Inc, 388 Greenwich Street, New
York, New York 10013, Attention: Legal Department-- Brad Gans, or, if sent to
the Company or the Trust, will be mailed, delivered or telegraphed and confirmed
to it at Nationwide Financial Services, Inc., One Nationwide Plaza, Columbus,
Ohio 43215, Attention: President (with a copy to the General Counsel); provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by Salomon Smith Barney
will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
31
<PAGE> 32
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company and the Trust hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
15. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 2(a) above contained in the Registration Statement at the Effective
Date including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments thereto and
any Rule 462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that was first filed pursuant to Rule 424(b) after
the Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the Securities and
the offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 2(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration Statement,
as the case may be. Such term shall include
32
<PAGE> 33
any Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to
such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the initial registration statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended and the rules and regulations of the Commission promulgated
thereunder.
33
<PAGE> 34
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Company, the Trust and the several Underwriters in accordance with its terms.
Very truly yours,
NATIONWIDE FINANCIAL SERVICES, INC.
By________________________________
Name:
Title:
NATIONWIDE FINANCIAL SERVICES
CAPITAL TRUST II
By Nationwide Financial Services, Inc., as Sponsor
By________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
SALOMON SMITH BARNEY INC.
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
By Salomon Smith Barney Inc.
By______________________________________
Name:
Title:
<PAGE> 35
SCHEDULE I
<TABLE>
<CAPTION>
Underwriters Number of
------------ Securities to be
Purchased
-----------------
<S> <C>
Salomon Smith Barney Inc................................................................ 1,158,000
A.G. Edwards & Sons, Inc. .............................................................. 1,135,000
Morgan Stanley & Co. Incorporated ...................................................... 1,135,000
PaineWebber Incorporated................................................................ 1,135,000
Prudential Securities Incorporated...................................................... 1,135,000
Credit Suisse First Boston Corporation.................................................. 200,000
J.P. Morgan Securities Inc.............................................................. 200,000
Bear, Stearns & Co. Inc................................................................. 93,000
BT Alex. Brown Incorporated............................................................. 93,000
CIBC Oppenheimer Corp................................................................... 93,000
Dain Rauscher Incorporated.............................................................. 93,000
EVEREN Securities, Inc.................................................................. 93,000
Goldman, Sachs & Co..................................................................... 93,000
J.C. Bradford & Co...................................................................... 93,000
Legg Mason Wood Walker, Incorporated.................................................... 93,000
Piper Jaffray Inc....................................................................... 93,000
Raymond James & Associates, Inc......................................................... 93,000
The Robinson-Humphrey Company, LLC...................................................... 93,000
SG Cowen Securities Corp................................................................ 93,000
Wheat First Securities, Inc............................................................. 93,000
Craigie Incorporated.................................................................... 33,000
Fahenstock & Co. Inc.................................................................... 33,000
Fidelity Capital Markets-- A division of National Financial Services Corporation
33,000
Fifth Third/The Ohio Company............................................................ 33,000
First Albany Corporation................................................................ 33,000
First of Michigan Corporation........................................................... 33,000
Gibraltar Securities Co................................................................. 33,000
Gruntal & Co., L.L.C.................................................................... 33,000
Interstate/Johnson Lane Corporation..................................................... 33,000
J.J.B. Hillard, W.L. Lyons, Inc......................................................... 33,000
Janney Montgomery Scott Inc............................................................. 33,000
McDonald & Company Securities, Inc...................................................... 33,000
Mesirow Financial, Inc.................................................................. 33,000
Morgan Keegan & Company, Inc............................................................ 33,000
Olde Discount Coporation................................................................ 33,000
Roney & Co LLC.......................................................................... 33,000
Stephens Inc............................................................................ 33,000
TD Securities (USA) Inc................................................................. 33,000
Tucker Anthony Incorporated............................................................. 33,000
</TABLE>
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Utendahl Capital Partners, L.P.............................................. 33,000
Wedbush Morgan Securities................................................... 33,000
---------
Total: 8,000,000
=========
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EXHIBIT 4.1
AMENDED AND RESTATED DECLARATION OF TRUST
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
AMONG
NATIONWIDE FINANCIAL SERVICES, INC.
(AS SPONSOR)
WILMINGTON TRUST COMPANY
(AS PROPERTY TRUSTEE AND DELAWARE TRUSTEE)
AND
THE REGULAR TRUSTEES NAMED HEREIN
DATED AS OF OCTOBER 19, 1998
================================================================================
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TABLE OF CONTENTS
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ARTICLE I INTERPRETATION AND DEFINITIONS..................................... 1
SECTION 1.1 Definitions....................................................... 1
ARTICLE II TRUST INDENTURE ACT................................................ 8
SECTION 2.1 Trust Indenture Act: Application.................................. 8
SECTION 2.2 Lists of Holders of Securities..................................... 8
SECTION 2.3 Reports by the Property Trustee.................................... 9
SECTION 2.4 Periodic Reports to the Property Trustee........................... 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent................... 9
SECTION 2.6 Events of Default: Waiver.......................................... 9
SECTION 2.7 Event of Default: Notice.......................................... 11
ARTICLE III ORGANIZATION....................................................... 11
SECTION 3.1 Name............................................................... 11
SECTION 3.2 Office............................................................. 12
SECTION 3.3 Declaration........................................................ 12
SECTION 3.4 Authority.......................................................... 12
SECTION 3.5 Title to Property of the Trust..................................... 12
SECTION 3.6 Powers and Duties of the Regular Trustees.......................... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............... 16
SECTION 3.8 Powers and Duties of the Property Trustee.......................... 16
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee........ 18
SECTION 3.10 Certain Rights of Property Trustee................................. 20
SECTION 3.11 Delaware Trustee................................................... 22
SECTION 3.12 Execution of Documents............................................. 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities............. 22
SECTION 3.14 Duration of Trust.................................................. 22
SECTION 3.15 Mergers............................................................ 22
ARTICLE IV SPONSOR............................................................ 24
SECTION 4.1 Sponsor's Purchase of Common Securities............................ 24
SECTION 4.2 Responsibilities of the Sponsor.................................... 24
SECTION 4.3 Guarantee of Payment of Trust Obligations.......................... 25
ARTICLE V TRUSTEES........................................................... 26
SECTION 5.1 Number of Trustees................................................. 26
SECTION 5.2 Delaware Trustee................................................... 26
SECTION 5.3 Property Trustee: Eligibility..................................... 26
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SECTION 5.4 Qualifications of Regular Trustees and Delaware
Trustee Generally........................................... 27
SECTION 5.5 Initial Trustees: Additional Powers of Regular Trustees.............. 28
SECTION 5.6 Appointment, Removal and Resignation of Trustees..................... 28
SECTION 5.7 Vacancies Among Trustees............................................. 30
SECTION 5.8 Effect of Vacancies.................................................. 30
SECTION 5.9 Meetings............................................................. 30
SECTION 5.10 Delegation of Power.................................................. 31
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business............................................................. 31
ARTICLE VI DISTRIBUTIONS........................................................ 31
SECTION 6.1 Distributions........................................................ 31
ARTICLE VII ISSUANCE OF SECURITIES............................................... 32
SECTION 7.1 General Provisions Regarding Securities.............................. 32
SECTION 7.2 Registrar and Paying Agent........................................... 33
SECTION 7.3 Paying Agent to Hold Money in Trust.................................. 33
ARTICLE VIII DISSOLUTION OF TRUST................................................. 34
SECTION 8.1 Dissolution of Trust................................................. 34
ARTICLE IX TRANSFER OF INTERESTS................................................ 35
SECTION 9.1 Transfer of Securities............................................... 35
SECTION 9.2 Transfer of Certificates............................................. 35
SECTION 9.3 Deemed Security Holders.............................................. 35
SECTION 9.4 Book Entry Interests................................................. 36
SECTION 9.5 Notices to Clearing Agency........................................... 36
SECTION 9.6 Appointment of Successor Clearing Agency............................. 37
SECTION 9.7 Definitive Preferred Security Certificates........................... 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.................... 37
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS................................................... 38
SECTION 10.1 Liability............................................................ 38
SECTION 10.2 Exculpation.......................................................... 39
SECTION 10.3 Fiduciary Duty....................................................... 39
SECTION 10.4 Indemnification...................................................... 40
SECTION 10.5 Outside Businesses................................................... 43
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ARTICLE XI ACCOUNTING...................................................... 43
SECTION 11.1 Fiscal Year..................................................... 43
SECTION 11.2 Certain Accounting Matters...................................... 43
SECTION 11.3 Banking......................................................... 44
SECTION 11.4 Withholding..................................................... 44
ARTICLE XII AMENDMENTS AND MEETINGS......................................... 45
SECTION 12.1 Amendments...................................................... 45
SECTION 12.2 Meetings of the Holders of Securities: Action by
Written Consent........................................ 47
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE................................................ 48
SECTION 13.1 Representations and Warranties of the Property Trustee.......... 48
SECTION 13.2 Representations and Warranties of Delaware Trustee.............. 49
ARTICLE XIV MISCELLANEOUS................................................... 49
SECTION 14.1 Notices......................................................... 49
SECTION 14.2 Governing Law................................................... 51
SECTION 14.3 Intention of the Parties........................................ 51
SECTION 14.4 Headings........................................................ 51
SECTION 14.5 Successors and Assigns.......................................... 51
SECTION 14.6 Partial Enforceability.......................................... 51
SECTION 14.7 Counterparts.................................................... 51
</TABLE>
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<PAGE> 5
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 19, 1998, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Nationwide Financial
Services Capital Trust II (the "Trust"), a trust under the Business Trust Act
(as defined herein), pursuant to a Declaration of Trust dated as of May 7, 1998
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware and dated as of May 7, 1998, for the
sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer;
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 to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Annexes
and Exhibits are to Articles and Sections of, and Annexes and Exhibits to, this
Declaration unless otherwise specified;
<PAGE> 6
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act, or any successor provision thereto and as may be
amended from time to time.
"Beneficiaries" has the meaning set forth in Section 4.3(a).
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the City of New York, New York or Wilmington,
Delaware are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Sections 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
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<PAGE> 7
"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 of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the 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 1100 North Market Street,
Wilmington, Delaware 19890-001, Attn: 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 of Securities.
"Debenture Issuer" means the Sponsor, in its capacity as issuer of the
Debentures under the Indenture.
"Debentures" means the 7.10% Junior Subordinated Deferrable Interest
Debentures due October 31, 2028, to be issued by the Debenture Issuer pursuant
to the Indenture to be held by the Property Trustee.
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
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<PAGE> 8
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of October 19, 1998, between
the Debenture Issuer and the Indenture Trustee, as amended or supplemented from
time to time, pursuant to which the Debentures are to be issued.
"Indenture Trustee" means Wilmington Trust Company as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except to the
extent otherwise provided in the terms of the Preferred 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 Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of an aggregate liquidation amount representing
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.
"Nationwide Financial Services, Inc." means Nationwide Financial
Services, Inc., a Delaware corporation.
"Obligations" has the meaning set forth in Section 4.3(a).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
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<PAGE> 9
(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 in rendering the Officers' Certificate;
(C) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(D) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"100% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred 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 Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 100% 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.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement dated as
of October 19, 1998, between the Sponsor and the trustee named therein relating
to the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
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<PAGE> 10
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.2.
"Regular Trustee" has the meaning specified in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any assistant secretary, the
treasurer, any assistant treasurer or other officer of the Corporate Trust
Office of the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Nationwide Financial Services, Inc., or any successor
entity in a merger, consolidation or amalgamation, in its capacity as sponsor of
the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Property Trustee" has the meaning set forth in Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
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<PAGE> 11
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred 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 Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 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.
"25% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred 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 Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 25% 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.
"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).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities substantially in the form of
Exhibit B.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT: APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders") as of such record date, and (ii) at any other time, within
30 days of receipt by the Trust of a written request therefor, a List of Holders
as of a date no more than 14 days before such List of Holders is given to the
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. Unless supplemented,
amended or restated pursuant to this Section 2.2(a), the Property Trustee shall
be entitled to rely exclusively on the last List of Holders provided to it by
the Sponsor or any Regular Trustee.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
-8-
<PAGE> 13
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after April 15 of each year, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by such section. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO THE PROPERTY TRUSTEE.
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
required by Section 314 (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 2.5 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) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT: WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than
a majority in principal amount of the Debentures (a "Super Majority") affected
thereby, only the Holders of at least the proportion in aggregate liquidation
amount of the Preferred Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding may waive such
Event of Default in respect of the Preferred Securities under the Declaration.
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)(l)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Preferred Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration, but no such waiver shall
extend to any
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<PAGE> 14
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided in this Section 2.6(b), the Event of Default
under the Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority,
except where the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided in this Section 2.6(b), only
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 may waive such Event of Default
in respect of the Common Securities under the Declaration; provided further,
each Holder of Common Securities will be deemed to have waived any such Event of
Default and all Events of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated, and until such
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only the Holders
of the Preferred Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of the
Trust Indenture Act and such sections 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 the waiver of an Event
of Default by the Holders of a Majority in liquidation amount of the Common
Securities, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provision 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
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Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT: NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, (i) 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 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein) and (ii) any notice of default received from the Indenture Trustee with
respect to the Debentures, which notice from the Property Trustee to the Holders
shall state that an Event of Default under the Indenture also constitutes an
Event of Default with respect to the Securities; provided, that, except for a
default in the payment of principal of (or premium, if any) or interest on any
of the Debentures or in the payment of any sinking fund installment established
for the Debentures, the 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.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Nationwide Financial Services Capital Trust II," as
such name may be modified from time to time by the Regular Trustees following
written notice to 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.
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SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Nationwide
Financial Services, Inc., One Nationwide Plaza, Columbus, Ohio 43215, Attention:
Chief Financial Officer. On ten Business Days written notice to the Holders of
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 DECLARATION.
(a) The exclusive purposes and functions of the Trust are (i) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, (ii) to maintain the status of the Trust as a grantor trust for
United States federal income tax purposes, and (iii) 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, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
(b) The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the Holders of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such Holders will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By
the acceptance of this Trust, neither the Trustees, the Sponsor nor the owners
of the Preferred Securities or Common Securities 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 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise expressly provided in this
Declaration, legal title to all assets of the Trust
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shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
beneficial interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) assist in the preparation of a prospectus in preliminary
and final form prepared by the Sponsor in relation to the offering and sale of
Preferred Securities and to assist in the preparation of and filing with the
Commission on behalf of the Trust a registration statement on Form S-3 or on
another appropriate form (including, if appropriate, a registration statement
under Rule 462(b) of the Securities Act), including any pre-effective or
post-effective amendments thereto, relating to the registration under the
Securities Act of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts determined by the Sponsor to be necessary, in order to qualify
or register all or part of the Preferred Securities in any State in which the
Sponsor has determined to qualify or register such Preferred Securities for
sale;
(iii) assist in the filing of an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc., any other national stock exchange
or the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(iv) assist in the filing with the Commission on behalf of the
Trust a registration statement on Form 8-A, prepared by the Sponsor, including
any pre-effective or post-effective amendments thereto, relating to the
registration of the Preferred Securities under Section 12(b) of the Exchange
Act;
(v) assist in the preparation of the Underwriting Agreement
providing for the sale of the Preferred Securities; and
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(vi) execute and deliver letters, documents, or instruments
with the Clearing Agency relating to the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
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 Preferred
Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to 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;
(j) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(l) to give prompt written notice to the Holders of 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
Indenture;
(m) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such
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existence is necessary to protect the limited liability of the Holders of the
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(n) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for United
States federal income tax purposes, provided that such action does not adversely
affect the interests of Holders;
(o) to the extent provided in this Declaration, terminating, dissolving
and liquidating the Trust and preparing, executing and filing the certificate of
cancellation with the Secretary of State of the State of Delaware;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not 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.
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SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and no Trustee
(including the Property Trustee) shall cause the Trust to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of exercising any trust or power conferred
upon the Indenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, or (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable.
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders 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 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) 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).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders 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
Trustee Account and make payments to the Holders of the Preferred Securities and
the Holders of the Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The Property
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness assigned by a
"nationally recognized statistical rating organization," as that term is defined
for purposes of Rule 436(g)(2) under the Securities Act, is at least equal to
the rating assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be
specified in written instructions from the Regular Trustees or the Sponsor to
effect the redemption of the Preferred Securities and the Common Securities to
the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be specified in written instructions from the
Regular Trustees or the Sponsor to effect the distribution of the Debentures to
the Holders of the Securities upon the occurrence of certain Special Events or
other specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) Subject to Section 2.6, the Property Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of the Securities pursuant to the
terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the
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Property Trustee shall, for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of such Securities, this Declaration, the Business
Trust Act and the Trust Indenture Act.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) 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 must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) of which a Responsible Officer 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 the exercise of such rights and powers, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions of this Declaration
and 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 no
implied covenants or obligations shall be read into this Declaration against the
Property Trustee; and
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(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and substantially
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 they substantially conform
to the requirements of this Declaration;
(ii) 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;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property Trustee
under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law; and
(viii) 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
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shall the Property Trustee be liable for any act, omission, default or
misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
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;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel 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;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have provided to
the Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Property Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Property Trustee, provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the occurrence
of an
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Event of Default, of its obligation to exercise the rights and powers vested in
it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders 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;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
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SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee 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 5.2, 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. In performing such limited role, the Delaware Trustee
shall have all of the rights and protections afforded to the Property Trustee
under Section 3.9(b)(i) (except that (i) the Delaware Trustee's standard of care
shall be gross negligence, and (ii) such rights and protections shall pertain to
the Delaware Trustee without regard to the occurrence of any Event of Default)
and Section 3.10 of this Declaration.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any one (1)
Regular Trustee is hereby authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall expire on May 8, 2053.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c) or in Annex I.
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that:
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(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in the
Successor Entity as a result of such merger, consolidation, amalgamation or
replacement);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the Holders'
interest in the Successor Entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
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(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor Entity) will continue
to be classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without the
consent of the Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Preferred Securities, the
Sponsor is hereby appointed an agent of the Trust pursuant to Section 3806(b)(7)
of the Business Trust Act and in such capacity shall have the exclusive right
and responsibility to engage in the following activities:
(a) to prepare a prospectus relating to the offering of Preferred
Securities by the Trust and to prepare for filing by the Trust with the
Commission, and execute on behalf of the Trust, a registration statement on Form
S-3 or on another appropriate form (including, if appropriate, a registration
statement under Rule 462(b) of the Securities Act) and any pre-effective or
post-effective amendments thereto, relating to the registration under the
Securities Act of the Preferred Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
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(c) to prepare for filing by the Trust, and execute on behalf of the
Trust, an application to the New York Stock Exchange, any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance of
any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission, and execute
on behalf of the Trust, a registration statement on Form 8-A, including any
pre-effective or post-effective amendments thereto, relating to the registration
of the Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of, and execute on behalf of the Trust, the
Underwriting Agreement providing for the sale of the Preferred Securities.
(f) to execute and deliver letters, documents or instruments on behalf
of the Trust with any Clearing Agency.
The Sponsor must exercise the powers set forth in this Section 4.2 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Sponsor 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 4.2, the Sponsor shall have none of the powers
or the authority of the Property Trustee set forth in Section 3.8.
SECTION 4.3 GUARANTEE OF PAYMENT OF TRUST OBLIGATIONS.
(a) Subject to the terms and conditions of this Section 4.3, the
Holders of the Common Securities hereby irrevocably and unconditionally
guarantees to each Person to whom the Trust is now or hereafter becomes indebted
or liable (the "Beneficiaries") the full payment, when and as due, of any and
all costs, expenses or liabilities of the Trust (other than obligations of the
Trust to make payments to holders of Trust Securities pursuant to the terms
thereof) ("Obligations") to such Beneficiaries.
(b) The agreement of the Sponsor in Section 4.3(a) is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
(c) The agreement of the Sponsor set forth in Section 4.3(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all of the Holders
of all the Preferred Securities (whether upon redemption, liquidation, exchange
or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of the Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any
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Obligation, under the Preferred Securities Guarantee or under this Declaration
for any reason whatsoever. Such agreement is continuing, irrevocable,
unconditional and absolute.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities, provided, however, that, the number of Trustees shall in
no event be less than two (2); provided further that (1) if required by the
Business Trust Act, there shall be at least one Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (3) for so long as this Declaration
is required to qualify as an indenture under the Trust Indenture Act, there
shall be one Property Trustee, who may also serve as Delaware Trustee if it
meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 5.3 PROPERTY TRUSTEE: ELIGIBILITY.
(a) There shall at all times be one Trustee that shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission to
act as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section 5.3(a)(ii),
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule 3a-7
requires a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if such Holders
were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities 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.
(e) The initial Property Trustee shall be as set forth in Section 5.5
hereof.
SECTION 5.4 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 have the power and
authority to act as a trustee hereunder and shall be represented in such
capacity by one or more Authorized Officers.
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SECTION 5.5 INITIAL TRUSTEES: ADDITIONAL POWERS OF REGULAR TRUSTEES.
(a) The initial Regular Trustees shall be:
David A. Diamond
Mark R. Thresher
Duane M.Campbell
c/o Nationwide Financial Services, Inc.
One Nationwide Plaza
Columbus, Ohio 43215
The initial Delaware Trustee shall be:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-001
Attn: Corporate Trust Administration
The initial Property Trustee shall be:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-001
Attn: Corporate Trust Administration
(b) Except as 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 with the consent of, any one such Regular Trustee.
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as
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Property Trustee under Section 5.3 (a "Successor Property Trustee") has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity. Any Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) 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
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee whereupon the resigning Trustee shall be released and
discharged of the trusts and other duties imposed on such Trustee in connection
herewith.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee
as the case may be if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning 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. Such court may
thereupon, after
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prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee 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.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 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, dissolve or terminate the Trust or terminate this
Declaration. Whenever a vacancy in the number of Regular Trustees shall occur,
until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 5.6, 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 5.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular
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Trustees. In the event there is only one Regular Trustee, any and all action of
such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including making any governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11 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 corporation resulting from any 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, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Property Trustee (the amount of any such payment being a "Payment Amount"),
the Property Trustee shall and is directed to make a distribution (a
"Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Trust shall issue one class of preferred securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Preferred Securities") and one
class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Preferred Securities and the Common
Securities.
(b) The 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 any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of this Declaration any such person
was not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The Preferred Security Certificates shall not be valid until
authenticated by the manual signature of an authorized officer of the Property
Trustee, the signature of whom shall be conclusive evidence that the Preferred
Security Certificates have been authenticated under this Declaration. Upon a
written order of the Trust signed by one Regular Trustee, the Property Trustee
shall authenticate the Preferred Security Certificates for original issue. The
Property Trustee may appoint an authenticating agent acceptable to the Trust to
authenticate the Preferred Security Certificates. An authenticating agent may
authenticate the Preferred Security Certificates whenever the Property Trustee
may do so. Each reference 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 thereof.
(d) 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.
(e) 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, subject to Section 10.1 with respect to the Common Securities.
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(f) Every Person, by virtue of having become a Holder of a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 REGISTRAR AND PAYING AGENT.
The Trust shall maintain in Wilmington, Delaware (i) an office or
agency where Preferred Securities may be presented for registration of transfer
or for exchange ("Registrar"), and (ii) an office or agency where Preferred
Securities may be presented for payment. The Registrar shall keep a register of
the Preferred Securities and of their transfer and exchange. The Trust may
appoint the Registrar and the Paying Agent and may appoint one or more
co-registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent, Registrar or co-registrar without
prior notice to any Holder. The Trust shall notify the Property Trustee of the
name and address of any agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates may act
as Paying Agent or Registrar. The Trust shall act as Paying Agent, Registrar and
co-registrar for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar and
Paying Agent for the Preferred Securities.
SECTION 7.3 PAYING AGENT TO HOLD MONEY IN TRUST.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of principal or Distributions on the Securities, and will notify
the Property Trustee if there are insufficient funds. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.
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ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 DISSOLUTION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of any Holder of the Common Securities
or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the Sponsor;
or the revocation of the Holder of the Common Securities' or the Sponsor's
charter and the expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
any Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been paid
to the Holders in accordance with the terms of the Securities;
(v) at the election of the Sponsor (which is wholly within its
sole discretion); provided that the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures endorsed
thereon shall have been distributed to the Holders of Securities in exchange for
all of the Securities; or
(vi) before the issuance of any Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) or upon the expiration of the term of the Trust set forth
in Section 3.14 and the winding up of the affairs of the Trust, the Trustees
shall file a certificate of cancellation with the Secretary of State of the
State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of a nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not continue to be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes
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whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Security Certificates, on original issuance, will be issued in the
form of one or more fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will
make book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Preferred Security Beneficial Owners
in accordance with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on, and shall be protected in relying on,
said instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Preferred Securities may be listed, or
to conform to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
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(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been
acquired by a Protected Purchaser (as such term is used in section 8-405(a)(1)
of the UCC as in effect in the State of Delaware (1994 Rev)), any Regular
Trustee on behalf of the Trust shall execute, and cause the Property Trustee to
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holders of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Preferred 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.
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SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Person and any Indemnified Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Securities, the Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this
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Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of
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all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Debenture Issuer or
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Preferred Security Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall
not affect any rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance
on behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify (i) the Property Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware
Trustee, and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees 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 loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration or the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration and the
termination of the Trust.
(c) The Sponsor agrees to pay the Property Trustee and the Delaware
Trustee, from time to time, such compensation for all services rendered by the
Property Trustee and the Delaware Trustee hereunder as may be mutually agreed
upon in writing by the Sponsor and the Property Trustee or the Delaware Trustee,
as the case may be, and except as otherwise expressly
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provided herein, to reimburse the Property Trustee and the Delaware Trustee upon
its or their request for all reasonable expenses (including counsel fees and
expenses), disbursements and advances incurred or made by the Property Trustee
or the Delaware Trustee, as the case may be, in accordance with the provisions
of this Declaration, except any such expense, disbursement or advance as may be
attributable to its or their negligence or bad faith.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the 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. Any 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.
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The 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.
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(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed 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 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the signatories for the Property Trustee Account.
SECTION 11.4 WITHHOLDING.
The Regular Trustees shall, and shall cause the Trust to, comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over 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.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
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);
(ii) 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:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and conforms to, the terms
of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be
classified for purposes of United States federal income taxation as a grantor
trust;
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(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended without
the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the Holders;
and
(v) to modify, eliminate and add to any provision of the
Declaration to such extent as may be reasonably necessary to effectuate any of
the foregoing or to otherwise comply with applicable law.
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SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES: ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred 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 Securities
representing at least 25% in liquidation amount of such class of Securities.
Such direction shall be given by delivering to the Regular Trustees one or more
calls in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of the Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in liquidation
amount that would be necessary to authorize or take such action at a meeting at
which all Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. No proxy shall be valid after the expiration of 11 months from the
date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the discretion of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
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(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 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:
(a) the Property Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Amended
Charter or by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority governing the banking or trust
powers of the Property Trustee is required for the execution, delivery or
performance by the Property Trustee, of the Declaration.
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SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.
(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The 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).
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority governing the banking or trust
powers of the Property Trustee is required for the execution, delivery or
performance by the Delaware Trustee of the Declaration.
(d) The Delaware Trustee has its principal place of business in the
State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
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Nationwide Financial Services Capital Trust II
c/o Nationwide Financial Services, Inc.
One Nationwide Plaza
Columbus, Ohio 43215
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-001
Attn: Corporate Trust Administration
(c) 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 Holders of
the Securities):
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-001
Attn: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
Nationwide Financial Services, Inc.
One Nationwide Plaza
Columbus, Ohio 43215
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
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SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 SUCCESSORS AND ASSIGNS.
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 so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the parties hereto 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.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ David A. Diamond
--------------------------------------------
David A. Diamond, as Regular Trustee
/s/ Mark R. Thresher
--------------------------------------------
Mark R. Thresher, as Regular Trustee
/s/ Duane H. Campbell
--------------------------------------------
Duane H. Campbell, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Debra Eberly
------------------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ Debra Eberly
------------------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
NATIONWIDE FINANCIAL SERVICES, INC.,
as Sponsor and Debenture Issuer
By: /s/ Joseph J. Gasper
------------------------------------------
Name: Joseph J. Gasper
Title: President, Chief Operating Officer
and Director
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ANNEX I
TERMS OF
7.10% TRUST PREFERRED SECURITIES
7.10% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of October 19, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
a. Preferred Securities. Eight million (8,000,000) Preferred
Securities of the Trust with an aggregate liquidation amount
with respect to the assets of the Trust of two hundred million
dollars ($200,000,000) and a liquidation amount with respect
to the assets of the Trust of $25 per preferred security, are
hereby designated for the purposes of identification only as
"7.10% Trust Preferred Securities" (the "Preferred
Securities"). The Preferred Security Certificates evidencing
the Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Preferred Securities are
listed.
b. Common Securities. Two hundred forty-seven thousand four
hundred twenty-four (247,424) Common Securities of the Trust
with an aggregate liquidation amount with respect to the
assets of the Trust of six million one hundred eighty-five
thousand six hundred dollars ($6,185,600) and a liquidation
amount with respect to the assets of the Trust of $25 per
common security, are hereby designated for the purposes of
identification only as "7.10% Trust Common Securities" (the
"Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
a. Distributions payable on each Security will be fixed at a rate
per annum of "7.10% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the
rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or would be payable if
not for any Extension Period (as defined below) or default by
the Debenture Issuer on the Debentures) will bear interest
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thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest
payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any
full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
b. Distributions on the Securities will be cumulative, will
accrue from and including October 19, 1998, and will be
payable quarterly in arrears, on January 31, April 30, July 31
and October 31 of each year, commencing on January 31, 1999.
When, as and if available for payment, Distributions will be
made by the Property Trustee, except as otherwise described
below. The Debenture Issuer has the right under the Indenture
to defer payments of interest on the Debentures by extending
the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters
(each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures, provided
that no Extension Period may extend beyond the date of
maturity of the Debentures. As a consequence of the Debenture
Issuer's extension of the interest payment period,
Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension
Period. In the event that the Debenture Issuer exercises its
right to extend the interest payment period, then (a) the
Debenture Issuer shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of
its capital stock or make any guarantee payment with respect
thereto (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of Nationwide
Financial Services, Inc. in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of
any class or series of Nationwide Financial Services, Inc.'s
capital stock for any other class or series of Nationwide
Financial Services, Inc.'s capital stock, (iii) the purchase
of fractional interests in shares of Nationwide Financial
Services, Inc.'s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security
being converted or exchanged, or (iv) distribution of rights
under any shareholders' rights plan adopted by Nationwide
Financial Services, Inc.) and (b) the Debenture Issuer shall
not make any payment of interest on or principal of (or
premium, if any, on), or repay, repurchase or redeem, any debt
securities issued by the Debenture Issuer or its subsidiaries
that rank pari passu with or junior to the Debentures. The
foregoing, however, will not apply to any stock
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dividends paid by Nationwide Financial Services, Inc. where
the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period,
together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters; provided,
further, that no Extension Period may extend beyond the
maturity of the Debentures. Payments of accrued Distributions
will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to
each Holder of any Extension Period upon their receipt of
notice thereof from the Debenture Issuer.
c. Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust
at the close of business on the relevant record dates. While
the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the
relevant payment dates which payment dates shall correspond to
the interest payment dates on the Debentures. Subject to any
applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated October 14, 1998, (the "Prospectus
Supplement") to the Prospectus dated May 29, 1998 (together,
the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust and certain
other business trusts. The relevant record dates for the
Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant
record dates for the Preferred Securities shall conform to the
rules of any securities exchange on which the securities are
listed and, if none, shall be selected by the Regular
Trustees, which dates shall be no more than 14 days but less
than 60 days before the relevant payment dates, which payment
dates shall correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are
not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer having failed to make a payment
under the Debentures (other than while an Extension Period
shall be continuing) , will cease to be payable to the Person
in whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Securities are
registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on
which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such
date will be made on the next succeeding day that is a
Business Day (and
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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 Distribution payment date.
d. In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein)
among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution or winding-up
of the Trust, the Holders of the Securities on the date of the dissolution or
winding-up, as the case may be, will be entitled to receive out of the assets of
the Trust available for distribution to Holders of Securities after satisfaction
of liabilities of creditors, distributions in an amount equal to the aggregate
of the stated liquidation amount of $25 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, or winding-up,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate equal to the Coupon Rate, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities outstanding at such time, have been
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
a. Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option
of the Debenture Issuer or pursuant to a Special Event as
described below), the proceeds from such repayment or payment
shall be simultaneously applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so repaid or redeemed at a redemption
price equal to the proceeds from such repayment or redemption
of the Debentures (the "Redemption Price"). Holders shall be
given not less than 30 nor more than 60 days notice of such
redemption.
b. If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the
Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
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c. The Debenture Issuer shall have the right, at any time, to
dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Property Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate,
and with accrued and unpaid interest equal to accrued and
unpaid Distributions on, the Securities outstanding at such
time, to be distributed to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro
Rata basis.
d. The Debenture Issuer shall have the right, upon not less than
30 nor more than 60 days notice, to redeem the Debentures, in
whole but not in part, for cash within 90 days following the
occurrence of a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event"), and, following
such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) any interpretation or
application of, or pronouncement with respect to, such laws or regulation, by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), which amendment or change is effective or
which interpretation, application or pronouncement is announced on or after
October 14, 1998, there is more than an insubstantial risk that (i) the Trust
would be subject to United States federal income tax with respect to interest
accrued or received on the Debentures, (ii) interest payable to the Trust on the
Debentures would not be deductible, in whole or in part, by the Debenture Issuer
for United States federal income tax purposes, or (iii) the Trust would be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") to the effect that, as a result of the occurrence of a change in law
or regulation or a written 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"), there is a more than an insubstantial
risk that the Trust is or will be considered an investment company which is
required to be registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after October 14, 1998.
On and from the date fixed by the Regular Trustees for any distribution
of Debentures and dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) DTC or its nominee (or any successor Clearing
Agency or its nominee), as the record Holder of the
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Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing Preferred Securities held by DTC or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
e. The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have
been paid on all Securities for all quarterly Distribution
periods terminating on or before the date of redemption.
f. If the Debentures are distributed to Holders of the
Securities, pursuant to the terms of the Indenture, the
Debenture Issuer will use its best efforts to have the
Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
g. Redemption or Distribution procedures will be as follows:
i. Notice of any redemption of, or notice of
distribution of Debentures in exchange for the
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on
which notices are given pursuant to this Section
4(g)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution
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/Distribution Notice or in
the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other
Holder.
ii. In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be
redeemed shall be redeemed Pro Rata from each Holder
of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the
name of and held of record by DTC or its nominee (or
any successor Clearing Agency or its nominee) or any
nominee, the distribution of the proceeds of such
redemption will be made
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to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency
or nominee.
iii. If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may
only be issued if the Debentures are redeemed as set
out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities
are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided, that the
Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the
Property Trustee will deposit irrevocably with DTC or
its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred
Securities and will give DTC (or any successor
Clearing Agency) irrevocable instructions and
authority to pay the Redemption Price to the
Preferred Security Beneficial Owners, and (B) with
respect to Preferred Securities issued in definitive
form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the
Property Trustee will pay the relevant Redemption
Price to the Holders of such Securities by check
mailed to the address of the relevant Holder
appearing on the books and records of the Trust on
the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to
the close of business on the date of such deposit, or
on the redemption date, as applicable, Distributions
will cease to accrue on the Securities so called for
redemption and all rights of Holders of such
Securities so called for redemption will cease,
except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees
nor the Trust shall be required to register or cause
to be registered the transfer of any Securities that
have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day,
then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is
a Business Day (and without any interest or other
payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year,
such payment will be made on the immediately
preceding Business Day, in each case with the same
force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or
refused and not paid either by the Property Trustee
or by the Sponsor as guarantor pursuant to the
Preferred Securities Guarantee, Distributions on such
Securities will continue to accrue from the original
redemption date to
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the actual date of payment, in which case the actual
payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption
Price.
iv. Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in
respect of the Preferred Securities, DTC or its
nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued
or, if Definitive Preferred Security Certificates
have been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holders
thereof.
v. Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Debenture Issuer or its
affiliates may at any time and from time to time
purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
a. Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
b. Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the
Preferred Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property
Trustee under the Declaration, including the right to direct
the Property Trustee, as holder of the Debentures, to (i)
direct the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercise
any trust or power conferred on the Indenture Trustee with
respect to the Debentures, (ii) waive any past Event of
Default that is waivable under Section 5.13 of the Indenture,
(iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment, modification or
termination 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 more than a majority in principal amount of
the Debentures (a "Super Majority") affected thereby, only the
Holders of at least such Super Majority in aggregate
liquidation amount of the Preferred Securities may direct the
Property Trustee to give such consent or take such action. The
Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the
Preferred Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy
available to the Property Trustee, the Property Trustee, as
holder of the Debentures, shall not take
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any of the actions described in clauses (i), (ii), (iii) or
(iv) above unless the Property Trustee has obtained an opinion
of a nationally recognized independent tax counsel experienced
in such matters 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. If the Property
Trustee fails to enforce its rights under the Declaration,
(other than by reason of the failure to obtain the opinion set
forth in the previous sentence) any Holder of Preferred
Securities may, to the fullest extent permitted by law,
directly institute a legal proceeding against the Debenture
Issuer to enforce the Property Trustee's rights under the
Debentures without first instituting a legal proceeding
against the Property Trustee or any other Person or entity. If
a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder
of Preferred Securities may also directly institute a
proceeding for enforcement of payment to such Holder (a
"Direct Action") of the principal of or interest on the
Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder
on or after the respective due date specified in the
Debentures without first (i) directing the Property Trustee to
enforce the terms of the Debentures or (ii) instituting a
legal proceeding directly against the Debenture Issuer to
enforce the Property Trustee's rights under the Debentures.
Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any
other remedy available to the Holders of the Debentures. In
connection with such Direct Action, Nationwide Financial
Services, Inc. will be subrogated to the rights of such Holder
of Preferred Securities under the Declaration to the extent of
any payment made by Nationwide Financial Services, Inc. to
such Holder of Preferred Securities in such Direct Action.
Any required approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
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<PAGE> 66
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
a. Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
b. The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or
decrease the number of Trustees.
c. Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph,
the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or direct the exercise of
any trust or power conferred upon the Property Trustee under
the Declaration, including (i) directing the time, method,
place of conducting any proceeding for any remedy available to
the Indenture Trustee, or exercising any trust or power
conferred on the Indenture Trustee with respect to the
Debentures, (ii) waiving any past default and its consequences
that is waivable under Section 5.13 of the Indenture, or (iii)
exercising any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable,
provided that, where a consent or action under the Indenture
would require the consent or act of the holders of a Super
Majority, the Property Trustee may only give such consent or
take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property
Trustee or the Indenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with
the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such
action. If the Property Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may
institute a legal proceeding
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directly against any Person to enforce the Property Trustee's
rights under the Debentures without first instituting a legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
a. In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Securities, whether by
way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other
than as described in Section 8.1 of the Declaration, then the
Holders of outstanding Securities as a class, will be entitled
to vote on such amendment or proposal (but not on any other
amendment or proposal) and such amendment or proposal shall
not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities,
voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or only the
Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the
approval of a Majority in liquidation amount of such class of
Securities.
b. In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect
to any amendment, modification or termination on the Indenture
or the Debentures, the Property Trustee shall request the
written direction of the Holders of the Securities with
respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or
termination as directed by a Majority in
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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 a
Super Majority, the Property Trustee may only give such
consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding; provided, further, that
the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such
action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Property Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed on the New York Stock Exchange, Inc.
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11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of any one or more of the Declaration,
the Preferred Securities Guarantee and the Indenture to a Holder without charge
on written request to the Sponsor at its principal place of business.
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<PAGE> 70
EXHIBIT A-1: FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -- THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS PREFERRED
SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number P-1
Number of Preferred Securities 8,000,000
CUSIP NO. 63861E204
Certificate Evidencing Preferred Securities of
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
7.10% Trust Preferred Securities (Liquidation amount $25 per Preferred
Security)
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II, 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 Eight
Million (8,000,000) preferred securities of the Trust representing undivided
preferred beneficial interests in the assets of the Trust designated the 7.10%
Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney,
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<PAGE> 71
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of October 19, 1998, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Preferred Securities as set forth in Annex I thereto.
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 Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Sponsor at its principal
place of business.
The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Preferred Securities Guarantee, including that the Preferred
Securities Guarantee is (A) subordinate and junior in right of payment to all
other liabilities of Nationwide Financial Services, Inc., excluding those made
pari passu or subordinate by their terms, (B) pari passu with the most senior
preferred or preference stock now or hereafter issued by Nationwide Financial
Services, Inc. and with any guarantee now or hereafter issued by Nationwide
Financial Services, Inc. with respect to preferred or preference stock of
Nationwide Financial Services, Inc.'s affiliates and (C) senior to Nationwide
Financial Services, Inc.'s common stock.
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 Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 19th
day of October, 1998.
NATIONWIDE FINANCIAL SERVICES
CAPITAL TRUST II
----------------------------------------
By: , as Regular Trustee
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<PAGE> 72
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
By: _______________________________________
Authorized Signatory
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<PAGE> 73
[FORM OF REVERSE SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 7.10% (the "Coupon Rate") of the stated liquidation amount of
$25 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears will
bear interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period of less than
a full calendar month the number of days elapsed in such month.
Distributions on the Preferred Securities will be cumulative, will
accrue from the date of original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the interest payment
dates on the Debentures: January 31, April 30, July 31 and October 31 of each
year, commencing on January 31, 1999, except as otherwise described below. So
long as no Event of Default (or an event which would be an Event of Default with
the giving of required notice or the passage of time) has occurred and is
continuing, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period so long as no Event of Default (or an event which
would be an Event of Default with the giving of required notice or the passage
of time) has occurred and is continuing; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters or extend beyond the maturity (whether at the stated
maturity or by declaration of acceleration, call for redemption or otherwise) of
the Debentures under the Indenture. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------- agent to
transfer this Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date:
-------------------------
Signature:
--------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Preferred Security Certificate)
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EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET
FORTH IN THE DECLARATION REFERRED TO BELOW
Certificate Number C-1
Number of Common Securities 247,424
Certificate Evidencing Common Securities of
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
7.10% Trust Common Securities (Liquidation amount $25 per Common
Security)
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Nationwide Financial Services, Inc., a Delaware corporation, (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 7.10%
Trust Common Securities (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 and satisfaction of the other conditions set forth in
the Declaration (as defined below), including, without limitation, Section 9.1
thereof. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of October 19, 1998, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I
thereto. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Sponsor will provide a copy of the
Declaration 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.
The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
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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 indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 19th
day of October, 1998.
NATIONWIDE FINANCIAL SERVICES CAPITAL
TRUST II
---------------------------------------------
By: , as Regular Trustee
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
---------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------- agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date:
----------------------
Signature:
---------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
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<PAGE> 1
EXHIBIT 4.2
================================================================================
SUBORDINATED INDENTURE
between
NATIONWIDE FINANCIAL SERVICES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
Dated as of October 19, 1998
================================================================================
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions ............................................................................. 1
SECTION 1.02. Compliance Certificate and Opinions...................................................... 8
SECTION 1.03. Forms of Documents Delivered to Trustee.................................................. 9
SECTION 1.04. Acts of Holders.......................................................................... 9
SECTION 1.05. Notices, etc., to Trustee and Company.................................................... 10
SECTION 1.06. Notice to Holders; Waiver................................................................ 11
SECTION 1.07. Conflict with Trust Indenture Act........................................................ 11
SECTION 1.08. Effect of Headings and Table of Contents................................................. 11
SECTION 1.09. Successors and Assigns................................................................... 11
SECTION 1.10. Separability Clause...................................................................... 11
SECTION 1.11. Benefits of Indenture.................................................................... 11
SECTION 1.12. Governing Law............................................................................ 12
SECTION 1.13. Nonbusiness Days......................................................................... 12
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally.......................................................................... 12
SECTION 2.02. Form of Trustee's Certificate of Authentication.......................................... 12
ARTICLE III
The Securities
SECTION 3.01. Amount Unlimited; Issuable in Series..................................................... 13
SECTION 3.02. Denominations............................................................................ 15
SECTION 3.03. Execution, Authentication, Delivery and Dating........................................... 15
SECTION 3.04. Temporary Securities..................................................................... 17
SECTION 3.05. Registration, Transfer and Exchange...................................................... 17
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities......................................... 18
SECTION 3.07. Payment of Interest; Interest Rights Preserved........................................... 19
SECTION 3.08. Persons Deemed Owners.................................................................... 21
SECTION 3.09. Cancellation............................................................................. 21
SECTION 3.10. Computation of Interest.................................................................. 21
SECTION 3.11. CUSIP Numbers............................................................................ 21
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ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture.................................................. 21
SECTION 4.02. Application of Trust Money............................................................... 22
SECTION 4.03. Applicability of Defeasance Provisions; Company's
Option to Effect Defeasance or Covenant Defeasance.............................. 22
SECTION 4.04. Defeasance and Discharge................................................................. 23
SECTION 4.05. Covenant Defeasance...................................................................... 23
SECTION 4.06. Conditions to Defeasance or Covenant Defeasance.......................................... 24
SECTION 4.08. Repayment to Company..................................................................... 26
SECTION 4.09. Indemnity For Government Obligations..................................................... 26
SECTION 4.10. Reimbursement............................................................................ 26
ARTICLE V
Remedies
SECTION 5.01. Events of Default........................................................................ 26
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment....................................... 28
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee.......................... 30
SECTION 5.04. Trustee May File Proofs of Claim......................................................... 30
SECTION 5.05. Trustee May Enforce Claim Without Possession of Securities............................... 31
SECTION 5.06. Application of Money Collected........................................................... 31
SECTION 5.07. Limitation on Suits...................................................................... 32
SECTION 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest............................................................ 33
SECTION 5.09. Restoration of Rights and Remedies....................................................... 33
SECTION 5.10. Rights and Remedies Cumulative........................................................... 33
SECTION 5.11. Delay or Omission Not Waiver............................................................. 33
SECTION 5.12. Control by Holders....................................................................... 33
SECTION 5.13. Waiver of Past Defaults.................................................................. 34
SECTION 5.14. Undertaking for Costs.................................................................... 35
SECTION 5.15. Waiver of Stay or Extension Laws......................................................... 35
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities...................................................... 35
SECTION 6.02. Notice of Defaults....................................................................... 36
SECTION 6.03. Certain Rights of Trustee................................................................ 37
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities................................... 38
SECTION 6.05. May Hold Securities...................................................................... 38
SECTION 6.06. Money Held In Trust...................................................................... 38
SECTION 6.07. Compensation and Reimbursement........................................................... 38
SECTION 6.08. Disqualification; Conflicting Interest................................................... 39
SECTION 6.09. Corporate Trustee Required; Eligibility.................................................. 39
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<TABLE>
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SECTION 6.10. Resignation and Removal; Appointment of Successor........................................ 39
SECTION 6.11. Acceptance of Appointment by Successor................................................... 41
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.............................. 42
SECTION 6.13. Preferential Collection of Claims Against Company........................................ 42
SECTION 6.14. Appointment of Authenticating Agent...................................................... 42
SECTION 6.15. Trustee's Application for Instructions from the Company.................................. 44
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and Addresses of Holders................................ 44
SECTION 7.02. Preservation of Information, Communications to Holders................................... 45
SECTION 7.03. Reports by Trustee....................................................................... 46
SECTION 7.04. Reports by Company....................................................................... 46
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms..................................... 47
SECTION 8.02. Successor Corporation Substituted........................................................ 47
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders....................................... 48
SECTION 9.02. Supplemental Indentures with Consent of Holders.......................................... 49
SECTION 9.03. Execution of Supplemental Indentures..................................................... 50
SECTION 9.04. Effect of Supplemental Indentures........................................................ 50
SECTION 9.05. Conformity with Trust Indenture Act...................................................... 50
SECTION 9.06. Reference in Securities to Supplemental Indentures....................................... 51
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest.............................................. 51
SECTION 10.02. Maintenance of Office or Agency......................................................... 51
SECTION 10.03. Money for Security Payments To Be Held in Trust......................................... 51
SECTION 10.04. Payment of Taxes and Other Claims....................................................... 53
SECTION 10.05. Statement as to Compliance.............................................................. 53
SECTION 10.06. Waiver of Certain Covenants............................................................. 53
SECTION 10.07. Calculation of Original Issue Discount.................................................. 53
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of This Article........................................................... 54
SECTION 11.02. Election To Redeem; Notice to Trustee................................................... 54
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SECTION 11.03. Selection of Securities To Be Redeemed.................................................. 54
SECTION 11.04. Notice of Redemption.................................................................... 54
SECTION 11.05. Deposit of Redemption Price............................................................. 55
SECTION 11.06. Payment of Securities Called for Redemption............................................. 55
ARTICLE XII
Sinking Funds
SECTION 12.01. Applicability of Article................................................................ 56
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities................................... 56
SECTION 12.03. Redemption of Securities for Sinking Fund............................................... 56
ARTICLE XIII
Subordination
SECTION 13.01. Agreement of Securityholders that Securities Subordinated
to Extent Provided............................................................. 58
SECTION 13.02. Rights of Holders of Senior Indebtedness................................................ 58
SECTION 13.03. Securities Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization
of Company..................................................................... 59
SECTION 13.04. Obligation of the Company Unconditional................................................. 60
SECTION 13.05. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.............................................................. 60
SECTION 13.06. Application by Trustee of Monies Deposited With It...................................... 60
SECTION 13.07. Subordination Rights not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness................................... 61
SECTION 13.08. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.................................................... 61
SECTION 13.09. Right of Trustee to Hold Senior Indebtedness............................................ 61
SECTION 13.10. Article XIII Not to Prevent Events of Default........................................... 61
SECTION 13.11. Subrogation............................................................................. 61
ARTICLE XIV
Miscellaneous
SECTION 14.01. Miscellaneous........................................................................... 62
</TABLE>
-iv-
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Indenture Act of 1939, as amended Section of Indenture
<S> <C>
Section 310 (a)(1)............................................ 6.09
(a)(2)............................................ 6.09
(a)(3)............................................ Not Applicable
(a)(4)............................................ Not Applicable
(a)(5)............................................ 6.09
(b)............................................... 6.08, 6.10
Section 311 (a)............................................... 6.13
(b)............................................... 6.13
Section 312 (a)............................................... 7.01, 7.02(a)
(b)............................................... 7.02(b)
(c)............................................... 7.02(c)
Section 313 (a)............................................... 7.03(a)
(b)............................................... Not Applicable
(c)............................................... 7.03(a)
(d)............................................... 7.03(b)
Section 314 (a)............................................... 7.04
(b)............................................... Not Applicable
(c)(1)............................................ 1.02
(c)(2)............................................ 1.02
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 1.02
Section 315 (a)............................................... 6.01(a)
(b)............................................... 6.02
(c)............................................... 6.01(b)
(d)............................................... 6.01(c)
(d)(1)............................................ 6.01(a), 6.01(c)
(d)(2)............................................ 6.01(c)
(d)(3)............................................ 6.01(c)
(e)............................................... 5.14
Section 316 (a)(last sentence)................................ 1.01
(a)(1)(A)......................................... 5.12
(a)(1)(B)......................................... 5.02, 5.13
(a)(2)............................................ Not Applicable
(b)............................................... 5.08
Section 317 (a)(1)............................................ 5.03
(a)(2)............................................ 5.04
(b)............................................... 10.03
Section 318 (a)............................................... 1.07
</TABLE>
- --------
* This cross-reference table does not constitute part of the Indenture and
shall not affect the interpretation of any of its terms or provisions.
<PAGE> 7
SUBORDINATED INDENTURE (this "Indenture"), dated as of October
19, 1998, between NATIONWIDE FINANCIAL SERVICES, INC., a Delaware corporation
(hereinafter called the "Company"), having its principal office at One
Nationwide Plaza, Columbus, Ohio 43215, and WILMINGTON TRUST COMPANY, a banking
corporation duly incorporated and existing under the laws of the State of
Delaware, as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured subordinated debentures, notes or other evidences of indebtedness
(hereinafter called the "Securities") to be issued in one or more series,
authenticated and delivered in accordance with this Indenture.
WHEREAS the Company has duly authorized the execution and
delivery of this Indenture to provide, among other things, for the
authentication, delivery and administration of the Securities.
WHEREAS all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE:
For and in consideration of the premises and the purchases of
the Securities by the Holders (as defined below) thereof, the Company and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term
<PAGE> 8
"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 Company; and
(d) the words "therein", "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.
Certain terms, used principally in Article VI, are defined in
that Article.
"Act" when used with respect to any Holder has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors, or such committee of the Board of Directors or
officers of the Company to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means every day except a Saturday, Sunday or a
day on which banking institutions in the City of New York, New York or the City
of Wilmington, Delaware, are permitted or required by any applicable law or
executive order to close.
"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 on such date.
-2-
<PAGE> 9
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the
written request or order signed in the name of the Company by the President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee.
"Consolidated Total Assets" means, in respect of the Company,
as of any date of determination, the amount of total assets shown on the
consolidated balance sheet of the Company and its consolidated Subsidiaries
contained in the most recent annual or quarterly report filed with the
Commission.
"Corporate Trust Office" means the principal office of the
Trustee in the City of Wilmington, Delaware, at which at any particular time its
corporate trust business shall be administered, which office at the date of
initial execution of this Indenture is Rodney Square North, 1100 North Market
Street, Wilmington, Delaware, 19890, Attention: Corporate Trust Administration.
"Corporation" includes corporations, associations, companies
and business trusts.
"Defaulted Interest" has the meaning specified in Section
3.07.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 with respect to such series (or any successor thereto).
"Dollar" means the currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"Event of Default" unless otherwise specified in the
supplemental indenture creating a series of Securities, has the meaning
specified in Article V.
"Foreign Currency" means any currency issued by the government
of one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"Global Security" means a Security in the form prescribed
herein evidencing all or part of a series of Securities, issued to the
Depositary or its nominee for such series, and registered in the name of such
Depositary or its nominee.
-3-
<PAGE> 10
"Government Obligations" means, with respect to the Securities
of any series, securities which are (i) direct obligations of the United States
of America or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed by the United States of America
and which, in either case, are full faith and credit obligations of the United
States of America and are not callable or redeemable at the option of the issuer
thereof and shall also include a depository receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Obligation or the specific payment
of interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder", "Securityholder" or other similar terms mean a
Person in whose name a Security is registered in the Securities Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.01.
"Interest Payment Date" means as to each series of Securities
the Stated Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or
determined as specified in each Security as being the rate of interest payable
on such Security.
"Maturity" when used with respect to any Security means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Nationwide Trust" means a Delaware statutory business trust
created by the Company for the purpose of issuing trust securities and to use
the proceeds of the sale thereof to purchase one or more series of securities.
"Notice of Default" has the meaning specified in Section
5.01(d).
"Officers' Certificate" means a certificate signed by the
President or a Vice President, and by the Treasurer, an Associate Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
-4-
<PAGE> 11
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company.
"Original Issue Date" means the date of issuance specified as
such in each Security.
"Original Issue Discount Security" means any security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02.
"Outstanding" means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture, except:
(i) securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent in
trust for the Holders of such Securities; and
(iii) securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 3.06, unless proof satisfactory to the Trustee is presented
that any such Securities are held by Holders in whose hands such Securities are
valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor. Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Securities, if
any, known by the Company to be owned or held by or for the account of the
Company, or any other obligor on the Securities or any Affiliate of the Company
or such obligor, and, subject to the provisions of Section 6.01, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence of
the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
-5-
<PAGE> 12
"Paying Agent" means the Trustee or any Person authorized by
the Company to pay the principal of or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means, with respect to the Securities of
any series, the place or places where the principal of (and premium, if any) and
interest on the Securities of such series are payable pursuant to Section 3.01
or 10.02.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
security authenticated and delivered under Section 3.06 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Preferred Securities" means preferred undivided beneficial
interests in the assets of a Nationwide Trust.
"Regular Record Date" for the interest payable on any Interest
Payment Date with respect to the Securities of a series means, unless otherwise
provided pursuant to Section 3.01 with respect to Securities of a series, the
date which is 15 days next preceding such Interest Payment Date (whether or not
a Business Day).
"Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trust Office of the Trustee, including
any vice president, any assistant vice president, any assistant secretary, the
treasurer, any assistant treasurer or other officer of the Corporate Trust
Office of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Restricted Subsidiary" means (a) so long as they are
Subsidiaries of the Company, Nationwide Life Insurance Company and Nationwide
Life and Annuity Insurance Company, (b) any other present or future Subsidiary
which is incorporated in any state of the United States or in the District of
Columbia and which is a regulated insurance company principally engaged in one
or more of the property, casualty and life insurance businesses; provided that
no such Subsidiary shall be a Restricted Subsidiary if (i) the Consolidated
Total Assets of such Subsidiary are less than 20% of the Consolidated Total
Assets of the Company and its consolidated Subsidiaries (including such
Subsidiary), in each case as set forth on the most recent fiscal year-end
balance sheets of such Subsidiary and the Company and its consolidated
Subsidiaries, respectively, and computed in accordance with generally accepted
accounting principles, or (ii) in the judgment of the Board of Directors, as
evidenced by a Board Resolution, such Subsidiary is not material to the
financial condition of the Company
-6-
<PAGE> 13
and its consolidated Subsidiaries taken as a whole, and (c) any Subsidiary which
is a successor, by merger or otherwise, to substantially all of the business or
properties of any Subsidiary referred to or described in clause (a) or (b).
"Securities" or "Security" means any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 3.05.
"Senior Indebtedness" means, with respect to the Company, the
principal of and premium, if any, and interest on (a) all indebtedness of the
Company, whether outstanding on the date of this Indenture or thereafter
created, (i) for money borrowed by the Company, (ii) for money borrowed by, or
obligations of, others and either assumed or guaranteed, directly or indirectly,
by the Company, (iii) in respect of letters of credit and acceptances issued or
made by banks, or (iv) constituting purchase money indebtedness, or indebtedness
secured by property included in the property, plant and equipment accounts of
the Company at the time of the acquisition of such property by the Company, for
the payment of which the Company is directly liable, and (b) all deferrals,
renewals, extensions and refunding of, and amendments, modifications and
supplements to, any such indebtedness. As used in the preceding sentence, the
term "purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest) issued or assumed as all or part of the consideration for the
acquisition of property, whether by purchase, merger, consolidation or
otherwise, unless by its terms such indebtedness is subordinate to other
indebtedness of the Company. Notwithstanding anything to the contrary in this
Indenture or the Securities, Senior Indebtedness shall not include, (i) any
indebtedness of the Company which, by its terms or the terms of the instrument
creating or evidencing it, is subordinate in right of payment to or pari passu
with the Securities (including the Company's outstanding 7.899% Junior
Subordinated Deferrable Interest Debentures due March 1, 2037 issued by the
Company to Nationwide Financial Services Capital Trust) or (ii) any indebtedness
of the Company to a Subsidiary of the Company.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of interest is due and payable.
"Subsidiary" means any corporation, partnership or entity of
which, at the time of determination, the Company owns or controls directly or
indirectly more than 50% of the outstanding shares of Voting Stock.
-7-
<PAGE> 14
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbb), as amended and as in effect on the date as of
this Indenture, except as provided in Section 9.05.
"Vice President" when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
"Voting Stock" means stock of any class or classes having
general voting power under ordinary circumstances to elect a majority of the
board of directors, managers or trustees of the entity in question, provided
that, for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered Voting Stock
whether or not such event shall have happened.
SECTION 1.02. Compliance Certificate and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent (including
covenants, compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.05) shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
-8-
<PAGE> 15
(c) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary to
enable him or her 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
individual, such condition or covenant has been complied with.
SECTION 1.03. Forms of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his or her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given to or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee, and, where it
is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Company and any agent
of the Trustee or the Company, if made in the manner provided in this Section.
-9-
<PAGE> 16
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the
Securities Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. Except as otherwise provided
herein, such record date shall be the later of 30 days prior to the first
solicitation of such consent or vote or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 7.01 prior to such
solicitation. If a record date is fixed, those persons who were Holders at such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date; provided, however, that unless such vote or consent is obtained
from the Holders (or their duly designated proxies) of the requisite principal
amount of Outstanding Securities prior to the date which is the 120th day after
such record date, any such vote or consent previously given shall automatically
and without further action by any Holder be canceled and of no further effect.
SECTION 1.05. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust office; or
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<PAGE> 17
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section 5.01
hereof) hereunder if in writing and mailed, first class, postage prepaid, to the
Company addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Securities Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee upon its receipt thereof, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Conflict with Trust Indenture Act. If any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act
through operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto, any
-11-
<PAGE> 18
Paying Agent and their successors and assigns and the Holders of the Securities,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 1.12. Governing Law. This Indenture and the Securities
shall be governed by and construed in accordance with the laws of the State of
New York, except as may otherwise be required by mandatory provisions of law.
SECTION 1.13. Nonbusiness Days. In any case where any Interest
Payment Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or the Securities)
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or at the Stated Maturity, 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, and no interest shall accrue for the period from
and after such Interest Payment Date or Stated Maturity, as the case may be,
until the next succeeding Business Day.
ARTICLE II
SECURITY FORMS
SECTION 2.01. Forms Generally. The definitive Securities of
each series shall be in substantially such form or forms as shall be established
pursuant to Section 3.01, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as the Company may deem
appropriate and as are not contrary to the provisions of this Indenture, or as
may be required to comply with the rules of any securities exchange or of any
automated quotation or book-entry system, or to conform to usage, all as may be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities.
The Securities of each series shall be issuable in registered
form without coupons. The definitive Securities shall be produced in such manner
as shall be determined by the officers executing such Securities, as evidenced
by their execution thereof.
SECTION 2.02. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the form
set forth below:
This is one of the Securities referred to in the within-
mentioned Indenture.
Dated: ______________________ Wilmington Trust Company, as Trustee,
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By:______________________________________
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 3.01. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of a series:
(a) the title or designation of the securities of such series,
which shall distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.06); provided,
however, that the authorized aggregate principal amount of such series may be
increased above such amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of determination
thereof;
(d) the rate or rates, if any, at which the Securities of such
series shall bear interest, the Interest Payment Dates on which such interest
shall be payable, the right, if any, of the Company to defer or extend an
Interest Payment Date and the minimum length of any such deferral period, and
the Regular Record Date for the interest payable on any Interest Payment Date or
the method by which any of the foregoing shall be determined;
(e) the place or places where the principal of (and premium,
if any) and interest on the Securities of such series shall be payable, the
place or places where the Securities of such series may be presented for
registration of transfer or exchange, and the place or places where notices and
demands to or upon the Company in respect of the Securities of such series may
be made;
(f) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and conditions upon
which the Securities of such series may be redeemed, in whole or in part, at the
option of the Company, pursuant to any sinking fund or otherwise;
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(g) the obligation or the right, if any, of the Company to
redeem, repay or purchase the Securities of such series pursuant to any sinking
fund, amortization or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and the other
terms and conditions upon which Securities of the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(h) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1,000 and any integral
multiple thereof;
(i) if other than Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Securities of the series shall be payable, or
in which the Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the
Events of Default or covenants of the Company set forth herein with respect to
the Securities of such series;
(k) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to permit or
facilitate the issuance of the Securities of such series in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons;
(m) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Securities of such series
or the manner in which such amounts will be determined;
(n) the issuance of a temporary Global Security representing
all of the Securities of such series and exchange of such temporary Global
Security for definitive Securities of such series;
(o) whether the Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and, in such case,
the Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Securities Exchange Act of 1934 as amended;
(p) the appointment of any Paying Agent or Agents for the
Securities of such series; and
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(q) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
herein or in or pursuant to such Board Resolution and set forth in such
Officers' Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 3.02. Denominations. The Securities of each series
shall be in registered form without coupons and shall be issuable in
denominations of $1,000 and any integral multiple thereof, unless otherwise
specified as contemplated by Section 3.01.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its President or
one of its Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities. At any time and from
time to time after the execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for authentication.
Securities may be authenticated on original issuance from time to time and
delivered pursuant to such procedures acceptable to the Trustee ("Procedures")
as may be specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to written or electronic instructions of
the Company or a duly authorized agent.
Prior to the delivery of a Security in any such form to the
Trustee for authentication, the Company shall deliver to the Trustee the
following:
(a) a Company Order requesting the Trustee's authentication
and delivery of all or a portion of the Securities of such series, and, if less
than all, setting forth procedures for such authentication;
(b) the Board Resolution by or pursuant to which such form of
Security has been approved, and the Board Resolution, if any, by or pursuant to
which the terms of the Securities of such series have been approved, and, if
pursuant to a Board Resolution, an Officers' Certificate describing the action
taken;
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(c) an Officers' Certificate dated the date such certificate
is delivered to the Trustee, stating that all conditions precedent provided for
in this Indenture relating to the authentication and delivery of Securities in
such form and with such terms have been complied with; and
(d) an Opinion of Counsel stating that (i) the form of such
Securities has been duly authorized and approved in conformity with the
provisions of this Indenture; (ii) the terms of such Securities have been duly
authorized and determined in conformity with the provisions of this Indenture,
or, if such terms are to be determined pursuant to Procedures, when so
determined such terms shall have been duly authorized and determined in
conformity with the provisions of this Indenture; and (iii) Securities in such
form when completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this Indenture
within the authorization as to aggregate principal amount established from time
to time by the Board of Directors and sold in the manner specified in such
Opinion of Counsel, will be the legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors' rights, and subject to general equitable principles except as
enforcement thereof may be limited by (A) requirements that a claim with respect
to any Securities denominated other than in Dollars (or a Foreign Currency or
currency unit judgment in respect of such claim) be converted into Dollars at a
rate of exchange prevailing on a date determined pursuant to applicable law or
(B) governmental authority to limit, delay or prohibit the making of payments in
Foreign Currencies or currency units or payments outside the United States and
subject to such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Securities;
provided, however, that the Trustee shall be entitled to receive the documents
referred to in clauses (b), (c) and (d) above only at or prior to the first
request of the Company to the Trustee to authenticate Securities of such series.
The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section if the Trustee, being advised in writing by
counsel, determines within a reasonable amount of time that such action may not
lawfully be taken or if the Trustee in good faith determines within a reasonable
amount of time that such action would expose the Trustee to personal liability
to existing Holders.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
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SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for that purpose without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations having the same Original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION 3.05. Registration, Transfer and Exchange. The Company
shall cause to be kept at the Corporate Trust Office of the Trustee a register
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register". The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated for that purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for
other Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
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Every Security presented or surrendered for transfer or
exchange shall (if so required by the Company or the Securities Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his or her attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities.
Notwithstanding any of the foregoing, any Global Security of a
series shall be exchangeable pursuant to this Section 3.05 for Securities
registered in the names of Persons other than the Depositary for such Security
or its nominee only if (i) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or if at
any time such Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and a successor Depositary
registered as a clearing agency under the Securities Exchange Act of 1934, as
amended, is not appointed by the Company within 90 days of such notice, (ii) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Securities of such series.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Securities registered in such names as such Depositary
shall direct.
Notwithstanding any other provision in this Indenture, a
Global Security may not be transferred except as a whole by the Depositary with
respect to such Global Security to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary.
Neither the Company nor the Trustee shall be required,
pursuant to the provisions of this Section, (a) to issue, transfer or exchange
any Security of any series during a period beginning at the opening of 15
business days before the day of selection for redemption of Securities pursuant
to Article XI and ending at the close of business on the day of mailing of
notice of redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security is surrendered to the Trustee together
with such security or indemnity as may be required by the Company or the Trustee
to save each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.
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If there be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a Protected Purchaser, as such term is used
in Section 8-405(a)(1) of the UCC as in effect in the State of Delaware (1994
Rev), the issuing Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date, shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of a
Security shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security of any series which is issued between a
Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the Board Resolution pursuant to Section 3.01
with respect to the related series of Securities.
Any interest on any Security which is payable, but is not
timely paid or duly provided for, on any Interest Payment Date for Securities of
such series (herein called "Defaulted Interest"), shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted
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Interest may be paid by the Company, at its election in each case, as provided
in clause (a) or (b) below.
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in respect
of which interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner: The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the City of Wilmington, Delaware, but such publication shall not
be a condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered on such Special Record Date
and shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest is
in default may be listed and, upon such notice as may be required by such
exchange (or by the Trustee if the Securities are not listed), if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
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SECTION 3.08. Persons Deemed Owners. The Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
any Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.07) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 3.09. Cancellation. All Securities surrendered for
payment, redemption, transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Securities and
Securities surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed or otherwise disposed of by the Trustee in
accordance with its usual practices and the Trustee shall, upon request, deliver
to the Company a certificate of such destruction.
SECTION 3.10. Computation of Interest. Except as otherwise
specified as contemplated by Section 3.01 for Securities of any series, interest
on the Securities of each series shall be computed on the basis of a year of
twelve 30-day months and, with respect to any period less than a full calendar
month, on the basis of the actual number of days elapsed during such period in
relation to the deemed 30 days of such month.
SECTION 3.11. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the 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 Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. (1)
This Indenture shall cease to be of further effect (except as to (i) any
surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of (and premium, if
any) and interest on the Securities and other rights, duties and obligations of
the Holders as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights and obligations of the Trustee
hereunder), and the Trustee, upon a Company Request specifying such action to be
taken and at the expense
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of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when (a) either (i) all Securities theretofore
authenticated and delivered (other than (A) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 3.06 and (B) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section
10.03) have been delivered to the Trustee for cancellation; or (ii) all such
Securities not theretofore delivered to the Trustee for cancellation (x) have
become due and payable, or (y) will become due and payable at their Stated
Maturity (or scheduled for redemption) within one year of the date of deposit,
and the Company, in the case of (x) or (y) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for such purpose an amount in
the currency or currencies in which the Securities of such series are payable
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated Maturity; (b) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company (including any amounts due to the Trustee in respect of its compensation
and expense reimbursement); and (c) the Company has delivered to the Trustee a
Company Request specifying such action to be taken and an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
(2) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.07 and,
if money shall have been deposited with the Trustee pursuant to this Section,
the obligations of the Trustee under Section 4.02 and the last paragraph of
Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 or money or Government Obligations deposited
with the Trustee pursuant to Section 4.03, or received by the Trustee in respect
of Government Obligations deposited with the Trustee pursuant to Section 4.03,
shall be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money or obligations have
been deposited with or received by the Trustee; provided, however, such moneys
need not be segregated from other funds except to the extent required by law.
SECTION 4.03. Applicability of Defeasance Provisions;
Company's Option to Effect Defeasance or Covenant Defeasance. If pursuant to
Section 3.01 provision is made for either both of (i) defeasance of the
Securities of any series under Section 4.04 or (ii) covenant defeasance of the
Securities of any series under Section 4.05, then the provisions of such Section
or Sections, as the case may be, together with the provisions of Sections 4.06
through 4.09 inclusive, with such modifications thereto as may be specified
pursuant to
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Section 3.01 with respect to any Securities, shall be applicable to such
Securities, and the Company may at its option by or pursuant to Board
Resolution, at any time, with respect to such Securities, elect to have Section
4.04 (if applicable) or Section 4.05 (if applicable) be applied to such
Outstanding Securities upon compliance with the conditions set forth below in
this Article IV.
SECTION 4.04. Defeasance and Discharge. Upon the Company's
exercise of the option specified in Section 4.03 applicable to this Section with
respect to the Securities of any series, the Company shall be deemed to have
been discharged from its obligations with respect to such Securities on and
after the date the conditions set forth in Section 4.06 are satisfied
(hereinafter "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 4.07 and the other Sections of
this Indenture referred to in clause (ii) of this Section, and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company,
shall on a Company Order execute proper instruments acknowledging the same),
except the following which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of such Securities to receive,
solely from the trust funds described in Section 4.06(a) and as more fully set
forth in such Section, payments in respect of the principal of, premium, if any,
and interest, if any, on such Securities when such payments are due; (ii) the
Company's obligations with respect to such Securities under Sections 3.05, 3.06,
10.02 and 10.03 and with respect to the payment of additional amounts, if any,
payable with respect to such Securities as specified pursuant to Section 3.01;
(iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and (iv) this Article IV. Subject to compliance with this Article IV, the
Company may exercise its option under this Section notwithstanding the prior
exercise of its option under Section 4.05 with respect to such Securities.
Following a defeasance, payment of such Securities may not be accelerated
because of an Event of Default.
SECTION 4.05. Covenant Defeasance. Upon the Company's exercise
of the option specified in Section 4.03 applicable to this Section with respect
to any Securities of any series, the Company shall be released from its
obligations under Section 8.01 and, if specified pursuant to Section 3.01, its
obligations under any other covenant with respect to such Securities on and
after the date the conditions set forth in Section 4.06 are satisfied
(hereinafter, "covenant defeasance"), and such Securities shall thereafter be
deemed to be not "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of any thereof)
in connection with Section 8.01 or such other covenant, but shall continue to be
deemed "Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a
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default or an Event of Default under Section 5.01(d) or otherwise, as the case
may be, but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
SECTION 4.06. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 4.04 or Section
4.05 to any Securities of a series:
(a) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another Trustee satisfying the requirements of
Section 6.09 who shall agree to comply with, and shall be entitled to the
benefits of, the provisions of Sections 4.03 through 4.09 inclusive and the last
paragraph of Section 10.03 applicable to the Trustee, for purposes of such
Sections also a "Trustee") as trust funds in trust for the purpose of making the
payments referred to in clauses (X) and (Y) of this Section 4.06(a),
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities, with instructions to the Trustee as to the
application thereof, (i) money in an amount (in such currency, currencies or
currency unit or units in which such Securities are then specified as payable at
maturity), or (ii) if Securities of such Series are not subject to repayment at
the option of Holders, Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment referred to
in clause (X) or (Y) of this Section 4.06(a), money in an amount or (iii) a
combination thereof in an amount sufficient, without reinvestment, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee to pay
and discharge, (X) the principal of, premium, if any, and interest, if any, on
Securities on the maturity (or redemption) of such principal or installment of
principal or interest and (Y) any mandatory sinking fund payments applicable to
such Securities on the day on which such payments are due and payable in
accordance with the terms of this Indenture and such Securities. Before such a
deposit the Company may make arrangements satisfactory to the Trustee for the
redemption of Securities at a future date or dates in accordance with Article XI
which shall be given effect in applying the foregoing.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default or Event of Default under,
this Indenture or result in a breach or violation of, or constitute a default
under, any other material agreement or instrument to which the Issuer is a party
or by which it is bound.
(c) In the case of an election under Section 4.04, the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel to the effect that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of
execution of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be
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subject to Federal income tax on the same amounts and in the same manner and at
the same times, as would have been the case if such deposit, defeasance and
discharge had not occurred.
(d) In the case of an election under Section 4.05, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred.
(e) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 4.04 or the covenant
defeasance under Section 4.05 (as the case may be), including those contained in
this Section 4.06 other than the 90 day period specified in Section 4.06(g),
have been complied with.
(f) This Company shall have delivered to the Trustee an
Officer's Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange, will
be delisted as a result of such deposit.
(g) No event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to such Securities or any
other Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 5.01(e) and (f),
at any time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
90th day).
(h) Such defeasance or covenant defeasance shall not result in
the trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940 unless such trust shall be
registered under such Act or exempt from registration thereunder.
(i) Such defeasance or covenant defeasance shall be effected
in compliance with any additional or substitute terms, conditions or limitations
which may be imposed on the Company in connection therewith as contemplated by
Section 3.01.
SECTION 4.07. Deposited Money and Government Obligations to be
Held in Trust. Subject to the provisions of the last paragraph of Section 10.03,
all money and Government Obligations (or other property as may be provided
pursuant to Section 3.01) (including the proceeds thereof) deposited with the
Trustee pursuant to Section 4.06 in respect of any Securities of any series
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
paying agent) as the Trustee may determine, to the Holders of such Securities of
all sums due and to
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become due thereon in respect of principal, premium, if any, and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
SECTION 4.08. Repayment to Company. The Trustee (or any paying
agent) shall promptly pay to the Company upon Company Order any excess money or
securities held by them at any time.
SECTION 4.09. Indemnity For Government Obligations. The
Company shall pay, and shall indemnify the Trustee against, any tax, fee or
other charge imposed on or assessed against Government Obligations deposited
pursuant to this Article IV or the principal and interest and any other amount
received on such Government Obligations.
SECTION 4.10. Reimbursement. If the Trustee or the paying
agent is unable to apply any money in accordance with this Article IV with
respect to any Securities by reason of any order or judgment of any court or
government authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture and such Securities from
which the Company has been discharged or released pursuant to Section 4.04 or
4.05 shall be revived and reinstated as though no deposit had occurred pursuant
to this Article IV with respect to such Securities, until such time as the
Trustee or paying agent is permitted to apply all money held in trust pursuant
to Section 4.07 with respect to such Securities in accordance with this Article;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever
used herein with respect to the Securities of any series, means each one of the
following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of all or any part of the principal
of (or premium, if any, on) any Security of that series when due, either at its
Maturity (or upon any redemption), by declaration or otherwise;
(b) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of such default
for a period of 30 days; provided, however that if the Company is permitted by
the terms of the Securities of the applicable series to defer the payment in
question, the date on which such payment is due and payable shall be the date on
which the Company is required to make payment following such
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deferral, if such deferral has been elected pursuant to the terms of the
Securities of that series;
(c) default in the payment of any sinking fund installment as
and when the same shall become due and payable by the terms of the Securities of
such series;
(d) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Securities of such series (other than a covenant or agreement in respect of
the Securities of such series a default in the performance or breach of which is
elsewhere in this Section specifically dealt with) or contained in this
Indenture (other than a covenant or agreement included in this Indenture solely
for the benefit of a series of Securities other than such series) for a period
of 60 days after the date on which written notice specifying such failure,
stating that such notice is a "Notice of Default" hereunder and demanding that
the Company remedy the same, shall have been given by registered or certified
mail, return receipt requested, to the Company by the Trustee, or to the Company
and the Trustee by the holders of at least 25% in aggregate principal amount of
the Outstanding Securities of all series affected thereby; or
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company 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;
(f) the institution by the Company 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 other
similar official) of the Company 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 the Company in furtherance of any such action;
(g) an event of default, as defined in any one or more
mortgages, indentures, instruments, bonds, debentures, notes or other similar
instruments under which there may be issued, or by which there may be secured or
evidenced, any indebtedness (other than the Securities of such series or
nonrecourse obligations) ("Indebtedness") in excess of $50,000,000 for money
borrowed by the Company or a Restricted Subsidiary shall occur, if such event of
default shall result in the acceleration of such Indebtedness prior to its
expressed maturity unless such Indebtedness is discharged or such acceleration
is cured, waived, rescinded or annulled
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within 10 days after written notice thereof shall have been given by registered
or certified mail, return receipt requested, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities (treated as one class) which
notice shall state that it is a "Notice of Default" hereunder; or
(h) any other Event of Default with respect to that Series,
including an Event of Default provided in the supplemental indenture under which
such series of Securities is issued or in the form of Security for such series;
provided, that if any such default or acceleration referred to in clause (g)
above shall cease or be cured, waived, rescinded or annulled, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon cured.
If an Event of Default described in clauses (a), (b), (c), (d)
or (h) (if the Event of Default under clause (d) or (h), as the case may be, is
with respect to less than all series of Securities then Outstanding) occurs and
is continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(treated as a single class) by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of any such affected series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable. If an
Event of Default described in clause (d) or (h) (if the Event of Default under
clause (d) or (h), as the case may be, is with respect to all series of
Securities then Outstanding) or (g) occurs and is continuing, then and in each
and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Company (and to
the Trustee if given by Securityholders), may declare the entire principal (or,
if any Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default specified in clause (e) or (f) occurs, all
unpaid principal (or, if any Securities are Original Issue Discount Securities,
such portion of the principal as may be specified in the terms thereof) of all
the Securities then Outstanding, and interest accrued thereon, if any, shall be
due and payable immediately, without any declaration or other act on the part of
the Trustee or any Securityholder.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all the Securities of that
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series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series (subject to, in the case of
any series of Securities held as trust assets of a Nationwide Trust, obtaining
the consent of the holders of the Trust Securities of such Nationwide Trust as
may be required by the applicable declaration of such Nationwide Trust), by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all
Securities of that series;
(ii) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at
the rate borne by the Securities;
(iii) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest at the
rate borne by the Securities;
(iv) sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of Securities of
that series which has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or
impair any right consequent thereon. Upon receipt by the Trustee of written
notice declaring such an acceleration, or rescission and annulment thereof, with
respect to Securities of a series all or part of which is represented by a
Global Security, a record date shall be established for determining Holders of
Outstanding Securities of such series entitled to join in such notice, which
record date shall be at the close of business on the day the Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day which is 60 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may
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be, shall automatically and without further action by any Holder be canceled and
of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 60-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.02.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:
(a) default is made in the payment of any installment of
interest on any Security when such interest becomes due and payable and
such default continues for a period of 30 days; or
(b) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof; the Company
will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on
such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest, including, to
the extent that payment of such interest shall be lawful, interest on
any overdue principal (and premium if any) and on any overdue
installments of interest at the rate borne by the Securities; and, in
addition thereto, all amounts owing the Trustee under Section 6.07.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors;
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(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment
of overdue principal (and premium, if any) or interest) shall be
entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount
of principal (and premium, if any) and interest owing and
unpaid in respect to the Securities and to file such other
papers or documents as may be necessary or advisable and to
take any and all actions as are authorized under the Trust
Indenture Act in order to have the claims of the Holders and
any predecessor to the Trustee under Section 6.07 and of the
Holders allowed in any such judicial proceedings;
(ii) and in particular, the Trustee shall be authorized
to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.06; and
(b) 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 Trustee for distribution in accordance with Section 5.06, and in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it and
any predecessor Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize or
require the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize or
require the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claim Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.07, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money or
property collected or to be applied by the Trustee with respect to a series of
Securities pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money or property on account of principal (or premium, if
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any) or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
first, to the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
second, to the payment of the amounts then due and unpaid upon
such series of Securities for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such series of Securities for principal (and premium, if any)
and interest, respectively; and
third, the balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07. Limitation on Suits. No Holder of any Securities
of any series shall have any right to institute, against the Company, any
proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Securities of each affected series (treated as one class) shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of each affected series
(treated as one class);
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Securities, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such Holders.
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SECTION 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right which is absolute and
unconditional to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest on such Security on the respective Stated
Maturities expressed in such Security and to institute suit for the enforcement
of any such payment, and such right shall not be impaired without the consent of
such Holder. Notwithstanding any other provision of this Indenture, if the
Securities of a series are then held by a Nationwide Trust, while an Event of
Default described in Section 5.01(a) or (b) hereof has occurred and is
continuing, each holder of Preferred Securities of such Nationwide Trust shall
have the right to bring suit directly against the Company for the enforcement of
payment to such holder in respect of Securities of such series in a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided in the last paragraph of Section 3.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. Except as
otherwise provided in the last paragraph of Section 3.06, no delay or omission
of the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or
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exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series; provided that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(c) subject to the provisions of Section 6.01, the Trustee
shall have the right to decline to follow such direction if the Trustee
in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders not joining in any such direction or would
involve the Trustee in personal liability.
Upon receipt by the Trustee of any written notice directing
the time, method or place of conducting any such proceeding or exercising any
such trust or power, with respect to Securities of a series all or part of which
is represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided that, unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.12.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default:
(a) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(b) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this
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Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his or her acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or omitted by
it as Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or in the case of
redemption, on or after the date of such redemption).
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under
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a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own wilful misconduct except that:
(i) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of Holders pursuant to Section
5.12 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.02. Notice of Defaults. Within 60 days after actual
knowledge of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and
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provided further that, in the case of any default of the character specified in
Section 5.01(d), no such notice to Holders of Securities of such series shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Subject to the
provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other evidence of indebtedness,
Security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel 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 reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the 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, indenture, Security or other paper or document,
but the Trustee in its discretion may make such inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, at the sole cost of the Company,
and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;
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(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the 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;
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture; and
(i) the Trustee shall not be deemed to have notice of any
default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Company of the Securities
or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any
Authenticating Agent, any Paying Agent, Securities Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Securities Registrar or such other agent.
SECTION 6.06. Money Held In Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees:
(a) to pay to the Trustee from time to time such compensation
as shall be agreed to in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses
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and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify each of the Trustee and any Predecessor
Trustee and their respective officers, directors, stockholders,
employees and agents for, and to hold each of them harmless against,
any loss, liability or expense (including the reasonable compensation
and the expenses and disbursements of its agents and counsel) to the
extent incurred without negligence or bad faith, arising out of or in
connection with the acceptance or administration of this trust or the
performance of its duties hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.01(e) or (f) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or a successor statute.
The provisions of this Section 6.07 shall survive the
termination of this Indenture.
SECTION 6.08. Disqualification; Conflicting Interest. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 3.10(b) of the Trust Indenture Act. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 3.10(b) of the Trust
Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a corporation organized
and doing business under the laws of the United States of America or of any
state, territory or the District of Columbia, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
Federal, state, territorial or District of Columbia authority, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal or state authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purpose of this
Section, 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. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company nor any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for the Securities
of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant
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to this Article shall become effective until the acceptance of appointment by
the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
6.08 after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at
least six months; or
(ii) the Trustee shall cease to be eligible under
Section 6.09 and shall fail to resign after written request
therefor by the Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, (A) the Company by Board Resolution may remove the
Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself or
herself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee with respect to
the Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall not have
been appointed by the Company, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, and the successor
Trustee so appointed shall, forthwith upon its
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acceptance of such appointment, become the successor Trustee with respect to the
Securities of such series and supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, subject to Section 5.14,
on behalf of himself or herself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee and the resigning or removed Trustee shall be
therefrom deemed released and discharged of the trusts and duties hereunder;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (ii) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of
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the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial
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redemption thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any state, territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of an Authenticating Agent
shall be the successor Authenticating Agent hereunder, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
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If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within
mentioned Indenture.
Dated:
_________________________, as Trustee,
By:______________________________________
As Authenticating Agent
By:______________________________________
As Authenticating Agent
SECTION 6.15. Trustee's Application for Instructions from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
five Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company To Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after June 1 and
December 1, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such June 1 and
December 1; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
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excluding from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.02. Preservation of Information, Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) If three or more Holders of Securities of the same series
(herein referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least six months preceding the date
of such application, and such application states that the applicants' desire to
communicate with other Holders of such series with respect to their rights under
this Indenture or under the Securities of such series and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the receipt
of such application, at its election, either
(i) afford such applicants access to the information
with respect to the Holders of such series preserved at the time by the
Trustee in accordance with paragraph (a) of this Section, or
(ii) inform such applicants as to the approximate
number of Holders of such series whose names and addresses appear in
the information preserved at the time by the Trustee in accordance with
paragraph (a) of this Section, and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if
any, specified in such application.
If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon the
written request of such applicants, mail to each Holder of such series
whose name and address appear in the information preserved at the time
by the Trustee in accordance with paragraph (a) of this Section a copy
of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment,
of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interest of the Holders of
such series or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain
any of such objections or if, after the entry of an order sustaining
one or more of such objections,
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the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to
all such Holders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act, at the
times and in the manner provided pursuant thereto.
(b) Within 60 days after May 15 of each year commencing with
the year 1999, the Trustee shall transmit by mail to all Holders of Securities
as provided in Section 313(c) of the Trust Indenture Act, a brief report dated
as of May 15, if required by and in compliance with Section 313(a) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed and also with the Commission. The Company will
promptly notify the Trustee whenever the Securities are listed on any stock
exchange.
SECTION 7.04. Reports by Company. The Company shall file with
the Trustee and with the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided in
the Trust Indenture Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, shall be filed
with the Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company shall continue to file with the
Commission and provide the Trustee and Holders with the annual reports and the
information, documents and other reports which are specified in Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended. The Company also shall
comply with the other provisions of Trust Indenture Act Section 3.14(a).
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained
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therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, etc., Only on Certain
Terms. The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets in entirety
or substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Company or convey, sell, transfer or lease its properties
and assets in entirety or substantially as an entirety to the Company, unless:
(a) in case the Company shall consolidate with or merge into
another corporation or convey, sell, transfer or lease its properties
and assets in entirety or substantially as an entirety to any Person,
the corporation formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance, sale or transfer,
or which leases, the properties and assets of the Company in entirety
or substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any State or
the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities
and the performance of every covenant of this Indenture on the part of
the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have happened and be
continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, sale, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.01, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.01.
SECTION 8.02. Successor Corporation Substituted. Upon any
consolidation or merger by the Company with or into any other corporation, or
any conveyance, sale, transfer or lease by the Company of its properties and
assets in entirety or substantially as an entirety to any Person in accordance
with Section 8.01, the successor corporation formed by such consolidation or
into which the Company is merged or to which such conveyance, sale, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
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right and power of, the Company under this Indenture with the same effect as if
such successor corporation had been named as the Company herein; and in the
event of any such conveyance, sale, transfer or lease the Company shall be
discharged from all obligations and covenants under the Indenture and the
Securities and may be dissolved and liquidated.
Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor corporation of the
covenants of the Company herein and in the Securities contained;
(b) to provide for the issuance under this Indenture of
Securities in bearer form (including securities registrable as to
principal only) and to provide for exchangeability of such Securities
for Securities issued hereunder in fully registered form, and to make
all appropriate changes for such purpose;
(c) to add to the covenants of the Company for the benefit of
the Holders of all or one or more specified series of Securities (and
if such covenants are to be for the benefit of fewer than all series of
Securities or fewer than all Securities of a Series, stating that such
covenants are expressly being included solely for the benefit
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of such series) or to surrender any right or power herein conferred
upon the Company;
(d) to secure the Securities;
(e) to establish the form or terms of Securities of any series
as permitted by Sections 2.01 and 3.01;
(f) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interest of the Holders of Securities of any
series; or
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b).
SECTION 9.02. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of each series affected (voting as one class) by
such supplemental indenture (or, if the affected series of the Securities are
held by a Nationwide Trust, the holders of at least a majority in aggregate
liquidation amount of the Preferred Securities of such Nationwide Trust), by Act
of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) extend the Stated Maturity of the principal of any
Outstanding Security, or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount payable
on redemption thereof or change currency in which the principal thereof
(including any amount in respect of Original Issue Discount Security), premium,
if any, or interest thereon is payable or reduce the amount of any Original
Issue Discount Security that is payable upon acceleration or provable in
bankruptcy or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof;
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain
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provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture; or
(c) modify any of the provisions of this Section, Section 5.13
or Section 10.06, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Security affected thereby, provided that, in
the case of any Outstanding Securities of a series then held by a Nationwide
Trust, no such supplemental indenture shall be entered into unless approved by
holders of the Preferred Securities of such Nationwide Trust as provided in any
applicable declaration of trust or similar instrument with respect to such
Nationwide Trust.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
This Indenture may not be amended to alter the subordination
provisions contained in Article XIII hereof without the consent of each holder
of Senior Indebtedness outstanding that would be adversely affected by such
amendment or alteration.
SECTION 9.03. Execution of Supplemental Indentures. In
executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
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SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities of that series in accordance with the terms of such
Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain in each Place of Payment for any series, an office or agency where
Securities of that series may be presented or surrendered for payment and an
office or agency where Securities may be surrendered for transfer or exchange
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company initially appoints the
Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain such office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all of such purposes, and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
and any change in the location of any such office or agency.
SECTION 10.03. Money for Security Payments To Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or
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interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(c) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be paid on Company Request to
the Company, or (if then held by the Company) shall (unless otherwise required
by mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the
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Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the city of Wilmington, Delaware, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid the Company.
SECTION 10.04. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Restricted Subsidiary or upon the income,
profits or property of the Company or any Restricted Subsidiary, and (b) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 10.05. Statement as to Compliance. The Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, signed by at
least one of the principal executive officer, principal financial officer and
principal accounting officer of the Company, covering the preceding calendar
year, stating whether or not to the best knowledge of the signers thereof the
Company is in default in the performance, observance or fulfillment of or
compliance with any of the terms, provisions, covenants and conditions of this
Indenture, and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge. For the
purpose of this Section 10.05, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.06. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any covenant or condition set
forth in Section 10.04, with respect to the Securities of any series if before
or after the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.07. Calculation of Original Issue Discount. The
Company shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on Outstanding Securities as of the end
of such year and (ii) such other specific information
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relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01. Applicability of This Article. Redemption of
Securities (whether by operation of a sinking fund or otherwise) as permitted or
required by any form of Security issued pursuant to this Indenture shall be made
in accordance with such form of Security and this Article; provided, however,
that if any provision of any such form of Security shall conflict with any
provision of this Article, the provision of such form of Security shall govern.
Except as otherwise set forth in the form of Security for such series, each
Security shall be subject to partial redemption only in the amount of $1,000 or
integral multiples of $1,000.
SECTION 11.02. Election To Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee (by Company Request) of such date and of the principal amount
of Securities of that series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities, the Company shall furnish the Trustee
with an Officers' Certificate and an Opinion of Counsel evidencing compliance
with such restriction.
SECTION 11.03. Selection of Securities To Be Redeemed. If less
than all the Securities of a particular series and having the same terms are to
be redeemed, the Trustee shall select, not more than 60 days prior to the date
fixed for redemption, in such manner as in its sole discretion it shall deem
appropriate and fair, the Securities or portions thereof of such series to be
redeemed. The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 11.04. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not later than the
30th day, and not earlier than the 60th day, prior to the date fixed for
redemption, to each Holder of Securities to be redeemed, at the address of such
Holder as it appears in the Securities Register.
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With respect to Securities of each series to be redeemed, each
notice of redemption shall identify the Securities to be redeemed (including
CUSIP number(s), if any) and shall state:
(a) the date fixed for redemption for Securities of such
series;
(b) the redemption price at which Securities of such series
are to be redeemed;
(c) if less than all Outstanding Securities of such particular
series and having the same terms are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal
amounts) of the particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption
price at which such Securities are to be redeemed will become due and
payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be
surrendered for payment of the redemption price at which such
Securities are to be redeemed; and
(f) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.05. Deposit of Redemption Price. Prior to the
redemption date specified in the notice of redemption given as provided in
Section 11.04, the Company will deposit with the Trustee or with one or more
paying agents an amount of money sufficient to redeem on the redemption date all
the Securities so called for redemption at the applicable redemption price.
SECTION 11.06. Payment of Securities Called for Redemption. If
any notice of redemption has been given as provided in Section 11.04, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable redemption price. On presentation and surrender
of such Securities at a place of payment in said notice specified, the said
securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price.
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Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities of
the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms. If a Global Security is so
surrendered, such new Security will also be a new Global Security.
ARTICLE XII
SINKING FUNDS
SECTION 12.01. Applicability of Article. The provisions of
this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by
Section 3.01 for such Securities.
The minimum amount of any sinking fund payment provided for by
the terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the term of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.02. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 12.02. Satisfaction of Sinking Fund Payments with
Securities. In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Securities of a series in cash, the Company may at
its option, at any time no more than 16 months and no less than 30 days prior to
the date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the terms
of the Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the redemption price for such
Securities, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.03. Redemption of Securities for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash in the currency in which the
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Securities of such series are payable (except as provided pursuant to Section
3.01) and the portion thereof, if any, which is to be satisfied by delivering
and crediting Securities pursuant to Section 12.02 and will also deliver to the
Trustee any Securities to be so delivered. Such Certificate shall be irrevocable
and upon its delivery the Company shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the succeeding sinking fund
payment date. In the case of the failure of the Company to deliver such
Certificate (or, as required by this Indenture and the Securities specified in
such Certificate), the sinking fund payment due on the succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit securities as provided in Section 12.02 and without the right to make the
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional)
made in cash plus any unused balance of any preceding sinking fund payments made
with respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the redemption price specified in such Securities with respect
to the sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or by the Company if the Company is acting as its own Paying Agent,
segregated and held in trust as provided in Section 10.03) for such series and
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 12.03. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.03) on the last sinking fund payment
date with respect to Securities of such series and not held for the payment or
redemption of particular Securities of such series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent),
together with other moneys, if necessary, to be deposited (or segregated)
sufficient for the purpose, to the payment of the principal of the Securities of
such series at Maturity. The Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 11.03 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.04. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 11.06. On or before each sinking fund
payment date, the Company shall pay to the Trustee (or, if the Company is acting
as its own Paying Agent, the Company shall segregate and hold in trust as
provided in Section 10.03) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.01) equal to
the principal and any interest accrued to the redemption date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.03.
Neither the Trustee nor the Company shall redeem any
Securities of a series with sinking fund moneys or mail any notice of redemption
of Securities of such series by
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operation of the sinking fund for such series during the continuance of a
default in payment of interest, if any, on any Securities of such series or of
any Event of Default (other than an Event of Default occurring as a consequence
of this paragraph) with respect to the securities of such series, except that if
the notice of redemption shall have been provided in accordance with the
provisions hereof, the Trustee (or the Company if the Company is then acting as
its own Paying Agent) shall redeem such Securities if cash sufficient for that
purpose shall be deposited with the Trustee (or segregated by the Company) for
that purpose in accordance with the terms of this Article XII. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur and any moneys thereafter paid into
such sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of the Securities of such series;
provided, however, that in case such default or Event of Default shall have been
cured or waived herein, such moneys shall thereafter be applied on the next
sinking fund payment date for the Securities of such series on which such moneys
may be applied pursuant to the provisions of this Section 12.03.
ARTICLE XIII
SUBORDINATION
SECTION 13.01. Agreement of Securityholders that Securities
Subordinated to Extent Provided. The Company, for itself, its successors and
assigns, covenants and agrees and each Holder of the Securities by his
acceptance thereof likewise covenants and agrees that the payment of the
principal of, premium, if any, and interest, if any, on each and all of the
Securities (other than Securities discharged or defeased pursuant to Article IV)
is hereby expressly subordinated and junior in right of payment, to the extent
and in the manner hereinafter set forth, to the prior payment in full, in cash
or cash equivalents, of all Senior Indebtedness. The provisions of this Article
shall constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder the same as if their names
were written herein as such, and they and/or each of them may proceed to enforce
such provisions.
SECTION 13.02. Rights of Holders of Senior Indebtedness.
(a) If Senior Indebtedness has not been paid when due and any
applicable grace period with respect to such default has ended and such default
has not been cured or waived or ceased to exist, then no payment of the
principal of (including redemption payments), premium, if any, or interest on
the Securities shall be made;
(b) If the maturity of any Senior Indebtedness is accelerated
because of an event of default, no payment of the principal of (including
redemption payments) premium, if any, or interest on the Securities shall be
made until such Senior Indebtedness is paid in full or such acceleration has
been rescinded; and
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(c) No holder of Senior Indebtedness shall be prejudiced in
his or her right to enforce subordination of the Securities by any act or
failure to act on the part of the Company.
SECTION 13.03. Securities Subordinated to Prior Payment of all
Senior Indebtedness on Dissolution, Liquidation or Reorganization of Company.
Upon any distribution of assets of the Company, to creditors upon any
dissolution, winding up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings of
the Company:
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash or cash equivalents of the
principal thereof, premium, if any, and interest (including any
interest accrued on such Senior Indebtedness subsequent to the
commencement of a bankruptcy, insolvency, receivership or similar
proceeding), if any, due thereon before the Holders of the Securities
are entitled to receive any payment on account of the principal of,
premium, if any, or interest, if any, on the Securities or any
distribution of any assets or securities;
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustees would be entitled
except for the provisions of this Article Fourteen, shall be paid by
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making such payment or distribution
directly to the holders of Senior Indebtedness or their representative
or representatives, or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, to the extent necessary to make payment in full
of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness;
(c) in the event that notwithstanding the foregoing provisions
of this Section 13.03, the Company shall make any payment to the
Trustee on account of the principal of or premium, if any, or interest,
if any, on the Securities, or on account of any sinking fund, or the
Holders of the Securities shall receive any such payment when such
payment is prohibited by this Section 13.03 and before all amounts
payable on, under or in connection with Senior Indebtedness are paid in
full in cash or cash equivalents, then and in such event, such payment
(subject to the provisions of Sections 13.06 and 13.07) shall be held
by the Trustee or the Holders of the Securities, as the case may be, in
trust for the benefit of, and shall be paid over and delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or
distribution of assets of the Company for application to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay
all Senior Indebtedness in full in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent
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payment or distribution or provision therefor to the holders of such
Senior Indebtedness.
SECTION 13.04. Obligation of the Company Unconditional.
Nothing contained in this Article XIII or elsewhere in this Indenture or in the
Securities is intended to or shall impair as between the Company and the Holders
of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest, if any, on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
XIII of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Article XIII, the
Trustee, subject to the provisions of Section 6.01, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such liquidation, dissolution, winding up, or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIII.
SECTION 13.05. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. The Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment of monies to or by the Trustee, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof from the
Company or from one or more holders of Senior Indebtedness or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.01, shall be entitled to assume
conclusively that no such facts exist.
SECTION 13.06. Application by Trustee of Monies Deposited With
It. Anything in this Indenture to the contrary notwithstanding, any deposit of
monies by the Company with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of or premium, if any, or interest, if
any, on any Securities shall be subject to the provisions of Sections 13.01,
13.02 and 13.03 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including, without
limitation, the payment of either the principal of or the interest or premium,
if any, on any Security) a Responsible Officer of the Trustee shall not have
received with respect to such monies the notice provided for in Section 13.05,
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such monies and to apply the same
to the purpose for which they were
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received, and shall not be affected by any notice to the contrary which may be
received by it on or after such date.
SECTION 13.07. Subordination Rights not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
SECTION 13.08. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of the Securities by his acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIII and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its or his
Securities in the form required in said proceedings and cause said claim to be
approved.
SECTION 13.09. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this Article
XIII in respect of any Senior Indebtedness at any time held by it to the same
extent as any other holder of Senior Indebtedness, and nothing in Section 6.13
or elsewhere in this Indenture shall be construed to deprive the Trustee of any
of its rights as such Holder.
SECTION 13.10. Article XIII Not to Prevent Events of Default.
The failure to make a payment on account of principal, interest or sinking fund
by reason of any provision in this Article XIII shall not be construed as
preventing the occurrence of an Event of Default under Section 5.01.
SECTION 13.11. Subrogation. Subject to the payment in full of
all amounts due in respect of Senior Indebtedness, the rights of the Holders
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Company, as the case may be, applicable to such Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or securities
to which the Holders or the Trustee would be entitled except for the provisions
of this Article XIII, and no payment over pursuant to the provisions of this
Article XIII to or for the benefit of the holders of such Senior Indebtedness by
Holders or the Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness of the Company, and the Holders, be deemed to be
a payment by the Company to or on account of such Senior
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Indebtedness. It is understood that the provisions of this Article XIII are and
are intended solely for the purposes of defining the relative rights of the
Holders, on the one hand, and the holders of such Senior Indebtedness, on the
other hand.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Miscellaneous. This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
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<PAGE> 69
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
NATIONWIDE FINANCIAL SERVICES, INC.
By: /s/ Joseph J. Gasper
-------------------------------------------
Name: Joseph J. Gasper
Title: President, Chief Operating Officer
and Director
Seal
Attest:
/s/ Dennis W. Glick
- -----------------------------
Secretary
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Debra Eberly
-------------------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
Seal
Attest:
/s/ W. Chris Sponenberg
- -----------------------------
Assistant Secretary
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<PAGE> 1
================================================================================
EXHIBIT 4.3
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 19, 1998
between
NATIONWIDE FINANCIAL SERVICES, INC.
AS ISSUER
and
WILMINGTON TRUST COMPANY,
AS TRUSTEE
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms...............................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 Designation and Principal Amount..................................3
SECTION 2.2 Maturity..........................................................3
SECTION 2.3 Form and Payment..................................................3
SECTION 2.4 Global Debenture..................................................3
SECTION 2.5 Interest..........................................................5
SECTION 2.6 Authorized Denominations..........................................6
SECTION 2.7 Redemption........................................................6
SECTION 2.8 Appointment of Agents.............................................6
SECTION 2.9 Depositary........................................................6
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1 Special Event Redemption..........................................7
SECTION 3.2 Optional Redemption by Company....................................7
SECTION 3.3 No Sinking Fund...................................................8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period..............................8
SECTION 4.2 Notice of Extension...............................................8
SECTION 4.3 Limitation of Transactions........................................9
i
<PAGE> 3
PAGE
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses..............................................10
SECTION 5.2 Payment Upon Resignation or Removal..............................10
ARTICLE VI
NOTICE
SECTION 6.1 Notice by the Company............................................11
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1 Listing on an Exchange...........................................12
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1 Form of Debenture................................................12
ARTICLE IX
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1 Original Issue of Debentures.....................................12
ARTICLE X
COVENANTS
SECTION 10.1 Covenants as to Trust............................................12
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Ratification of Indenture........................................13
SECTION 11.2 Trustee Not Responsible for Recitals.............................13
SECTION 11.3 Governing Law....................................................13
SECTION 11.4 Separability.....................................................13
SECTION 11.5 Counterparts.....................................................14
ii
<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of October 19, 1998 (the "First
Supplemental Indenture"), between Nationwide Financial Services, Inc., a
corporation duly organized and existing under the laws of the State of Delaware,
having its principal office at One Nationwide Plaza, Columbus, Ohio 43215, (the
"Company"), and Wilmington Trust Company, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture dated as of
October 19, 1998 (the "Subordinated Indenture") to the Trustee to provide for
the future issuance of the Company's unsecured debentures, notes or other
evidence of indebtedness (the "Securities"), to be issued from time to time in
one or more series as might be determined by the Company under the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 7.10% Junior Subordinated Deferrable Interest Debentures, due 2028 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, Nationwide Financial Services Capital Trust II, a Delaware
statutory business trust (the "Trust"), has offered to the public $200,000,000
aggregate liquidation amount of its 7.10% Trust Preferred Securities (the
"Preferred Securities"), representing preferred undivided beneficial interests
in the assets of the Trust and proposes to invest the proceeds from such
offering, together with the proceeds of the issuance and sale by the Trust to
the Company of $6,185,600 aggregate liquidation amount of its 7.10% Trust Common
Securities (the "Common Securities" and together with the Preferred Securities,
the "Trust Securities"), in $206,185,600 aggregate principal amount of the
Debentures;
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture;
WHEREAS, all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms, and to make the
Debentures, when executed by the Company and authenticated and delivered by the
Trustee, the valid obligations of the Company, have been performed; and
WHEREAS, the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
<PAGE> 5
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms.
Unless the context otherwise requires:
(a) each term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) each term defined anywhere in this First Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Delaware Trustee;
(iv) Preferred Security Certificate; (v) Property Trustee; (vi) Regular
Trustees; (vii) Special Event; and (viii) Underwriting Agreement;
(f) the following terms have the meanings given to them in this Section
1.1(f):
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Declaration" means the Amended and Restated Declaration of Trust of
Nationwide Financial Services Capital II, a Delaware statutory business trust,
dated as of October 19, 1998.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that the Trust is to be dissolved in accordance
with the Declaration, and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Global Debenture" shall have the meaning set forth in Section 2.4.
2
<PAGE> 6
"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Interest, if any.
"Non Book-Entry Preferred Securities" shall have the meaning set forth in
Section 2.4.
"Optional Redemption Price" shall have the meaning set forth in Section
3.2.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 Designation and Principal Amount.
There is hereby authorized a series of Securities designated the "7.10%
Junior Subordinated Deferrable Interest Debentures due 2028," limited in
aggregate principal amount to $206,185,600, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 3.3 of the Indenture.
SECTION 2.2. Maturity.
The Maturity Date will be October 31, 2028.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in fully
registered certificated form without interest coupons. Principal and interest on
the Debentures issued in certificated form will be payable, the transfer of such
Debentures will be registrable and such Debentures will be exchangeable for
Debentures bearing identical terms and provisions at the office or agency of the
Property Trustee; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the Holder at such address as shall
appear in the Security Register. Notwithstanding the foregoing, so long as the
Holder of any Debentures is the Property Trustee, the payment of the principal
of and interest (including Compounded Interest and Additional Interest, if any)
on such Debentures held by the Property Trustee will be made at such place and
to such account as may be designated by the Property Trustee.
SECTION 2.4 Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a global Debenture in an
aggregate principal amount
3
<PAGE> 7
equal to the aggregate principal amount of all outstanding Debentures (a "Global
Debenture"), to be registered in the name of the Depositary, or its nominee, and
delivered by the Property Trustee to the Depositary for crediting to the
accounts of its participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation shall execute a Global
Debenture in such aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the Indenture and this First
Supplemental Indenture. Payments on the Debentures issued as a Global Debenture
will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will be
deemed to represent beneficial interests in Debentures presented to the Trustee
by the Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates will
be cancelled and a Debenture, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and with accrued and unpaid interest
equal to accrued and unpaid distributions on, the Preferred Security Certificate
cancelled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and this First
Supplemental Indenture. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of the Depository, or to a successor Depositary selected or
approved by the Company or to a nominee or such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, the Company will execute, and, subject to
Article III of the Indenture the Trustee, upon written notice from the Company,
will authenticate and deliver the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the
4
<PAGE> 8
Global Debenture in exchange for such Global Debenture. In addition, the Company
may at any time determine that the Debentures shall no longer be represented by
the Global Debenture. In such event the Company will execute, and subject to
Section 3.01 of the Indenture, the Trustee, upon receipt of an Officers
Certificate evidencing such determination by the Company, will authenticate and
deliver the Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Debentures in definitive
registered form without coupons, in authorized denominations, the Global
Debenture shall be cancelled by the Trustee. Such Debentures in definitive
registered form issued in exchange for the Global Debenture shall be registered
in such name and in such authorized denominations as the Depositary pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
SECTION 2.5 Interest.
(a) Each Debenture will bear interest at the rate of 7.10% per annum (the
"Coupon Rate") from and including the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on
January 31, April 30, July 31 and October 31 of each year (each, an "Interest
Payment Date," commencing on January 31, 1999), to the Person in whose name such
Debenture or any predecessor Debenture is registered, at the close of business
on the regular record date for such interest installment, which, in respect of
(i) Debentures of which the Property Trustee is the Holder and the Preferred
Securities are in book-entry only form or (ii) a Global Debenture, shall be the
close of business on the Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if (i) the Debentures are held by the
Property Trustee and the Preferred Securities are no longer in book-entry only
form or (ii) the Debentures are not represented by a Global Debenture, the
Company may select a regular record date for such interest installment which
shall be more than 14 days but less than 60 days prior to an Interest Payment
Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed during such period in relation to the
deemed 90 days in such quarterly period. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such
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<PAGE> 9
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 the relevant Interest Payment Date.
(c) If, at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be not less than the amounts the Trust and
the Property Trustee would have received had no such taxes, duties, assessments
or other government charges been imposed.
SECTION 2.6 Authorized Denominations.
The Debentures shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.
SECTION 2.7 Redemption.
The Debentures are not subject to redemption at the option of the Holder
and are subject to redemption at the option of the Company or otherwise as
provided in Article III hereof.
SECTION 2.8 Appointment of Agents.
The Company hereby appoints, or confirms the appointment of, Wilmington
Trust Company as the initial Trustee, Securities Registrar and Paying Agent with
respect to the Debentures, subject to the provisions of the Indenture with
respect to the resignation, removal and succession of the Trustee, and subject,
further, to the right of the Company to appoint additional agents.
SECTION 2.9 Depositary.
The Depository Trust Company (or its nominee) shall act as the initial
Depositary for any Global Debenture which may be issued pursuant to this First
Supplemental Indenture.
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<PAGE> 10
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1 Special Event Redemption.
If a Special Event has occurred and is continuing, then, notwithstanding
Section 3.2(a) but subject to Section 3.2(c), the Company shall have the right
upon not less than 30 days nor more than 60 days' notice to the Holders of the
Debentures to redeem the Debentures, in whole but not in part, for cash within
90 days following the occurrence of such Special Event (the "90 Day Period") at
a redemption price equal to the principal amount to be redeemed plus any accrued
and unpaid interest thereon (including Additional Interest, if any) to the date
of such redemption (the "Redemption Price"). The Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
New York time, on the date such Redemption Price is to be paid.
SECTION 3.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(c) and to the provisions of
Article XI of the Indenture, except as otherwise may be specified in this First
Supplemental Indenture, the Company shall have the right to redeem the
Debentures, in whole at any time, or in part from time to time, on or after
October 19, 2003, at a redemption price equal to the principal amount to be
redeemed plus any accrued and unpaid interest thereon (including Additional
Interest, if any) to the date of such redemption (the "Optional Redemption
Price").
(b) Any redemption pursuant to this Section 3.2 will be made upon not less
than 30 days nor more than 60 days' notice to the Holder of the Debentures, at
the Optional Redemption Price. If the Debentures are only partially redeemed
pursuant to this Section 3.2, the Debentures will be redeemed pro rata or by lot
or by any other method utilized by the Trustee; provided, that if at the time of
redemption the Debentures are registered as a Global Debenture, the Depositary
shall determine, in accordance with its procedures, the principal amount of such
Debentures held by each Holder of Debenture to be redeemed. The Optional
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Optional Redemption Price by 10:00 a.m., New York time, on the date such
Optional Redemption Price is to be paid.
(c) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
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SECTION 3.3 No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of the
Debentures, to defer payments of interest by extending the interest payment
period of such Debentures for a period not exceeding 20 consecutive quarters
(the "Extended Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable; provided that no Extended Interest
Payment Period may extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will bear
interest thereon at the Coupon Rate compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued and
unpaid on the Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the Holders of
the Debentures in whose names the Debentures are registered in the Security
Register on the first record date after the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period together with
all such further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the maturity date of the Debentures. Upon the termination of any
Extended Interest Payment Period and upon the payment of all Deferred Interest
then due, the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.
SECTION 4.2 Notice of Extension.
(a) If the Property Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Property
Trustee and the Trustee of its selection of such Extended Interest Payment
Period one Business Day before the earlier of (i) the next succeeding date on
which Distributions on the Trust Securities issued by the Trust are payable, or
(ii) the date the Regular Trustee is required to give notice of the record date,
or the date such Distributions are payable, to the New York Stock Exchange or
other applicable
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<PAGE> 12
self-regulatory organization or to holders of the Preferred Securities issued by
the Trust, but in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Debentures at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the maximum Extended Interest Payment Period permitted under Section 4.1.
SECTION 4.3 Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of interest
as provided in Section 4.1, or (ii) there shall have occurred any Event of
Default, as defined in the Indenture, then (a) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged or (iv)
distributions of rights under any shareholder rights plan adopted by the
Company) and (b) the Company shall not make any payment of interest on or
principal of (or premium, if any, on) or repay, repurchase or redeem any debt
securities issued by the Company or its subsidiaries which rank pari passu with
or junior to the Debentures. The foregoing, however, will not apply to any stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid.
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<PAGE> 13
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Property Trustee and in connection with the sale of the Trust Securities by
the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and issuance
of the Debentures, including commissions to the underwriters payable pursuant to
the Underwriting Agreement and compensation and expenses of the Trustee under
the Indenture in accordance with the provisions of Section 6.07 of the
Indenture;
(b) pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization, maintenance and dissolution
of the Trust, the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and expenses
of the Property Trustee and the Delaware Trustee, the costs and expenses
relating to retention of the trustees, the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs, expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets and the fees and expenses incurred in the
enforcement by the Property Trustee of the rights of the holders of the
Preferred Securities);
(c) be primarily liable for any indemnification obligations arising with
respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
SECTION 5.2 Payment Upon Resignation or Removal
Upon termination of this First Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee pursuant to this Section 5.2, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Property Trustee, as the
case may be, pursuant to Section 5.6 of the Declaration, the Company shall pay
to the Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued to the date of such termination, removal or resignation.
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<PAGE> 14
ARTICLE VI
NOTICE
SECTION 6.1 Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Debentures pursuant
to the provisions of this Article VI. Notwithstanding the provisions of Article
XIII of the Indenture or any other provision of the Indenture and this First
Supplemental Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Debentures pursuant to the provisions of
Article XIII of the Indenture, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a holder
or holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.01 of the Indenture, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Article VI at least two Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of
(or premium, if any) or interest on any Debenture), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 6.01 of the Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company, as the case may be (or a trustee on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
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ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1 Listing on an Exchange.
If the Debentures are to be issued as a Global Debenture in connection
with the distribution of the Debentures to the holders of the Preferred
Securities issued by the Trust upon a Dissolution Event, the Company will use
its best efforts to list such Debentures on the New York Stock Exchange, Inc. or
on such other exchange as the Preferred Securities are then listed.
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1 Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms set forth in Exhibit A.
ARTICLE IX
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1 Original Issue of Debentures.
Debentures in the aggregate principal amount of $206,185,600 may, upon
execution of this First Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE X
COVENANTS
SECTION 10.1 Covenants as to Trust.
In the event Debentures are issued and sold to the Property Trustee in
connection with the issuance of Trust Securities by the Trust, for so long as
the Trust Securities remain outstanding, the Company will (i) maintain 100%
direct or indirect ownership of the Common Securities of the Trust; provided,
however, that any permitted successor of the Company under the Indenture may
succeed to the Company's ownership of the Common Securities, (ii) not
voluntarily dissolve, windup or terminate the Trust, except in connection with
the distribution
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of Debentures upon a Dissolution Event or otherwise, and in connection with
certain mergers, consolidations or amalgamations permitted by the Declaration,
(iii) timely perform its duties as sponsor of the Trust, (iv) use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with the distribution of Debentures as provided in the Declaration, the
redemption of the Trust Securities or in connection with certain mergers,
consolidations or amalgamations as permitted by the Declaration, and (b) to
remain a grantor trust and otherwise continue not to be treated as an
association taxable as a corporation or partnership for United States federal
income tax purposes, and (v) use its reasonable efforts to cause each holder of
Trust Securities to be treated as owning an individual beneficial interest in
the Debentures. This covenant is intended solely for the benefit of the Holders
of the Debentures issued pursuant to this First Supplemental Indenture and shall
not be applicable to the Securities of any other series issued pursuant to the
Indenture.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 11.2 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 11.3 Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the internal laws of said State.
SECTION 11.4 Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
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<PAGE> 17
SECTION 11.5 Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
NATIONWIDE FINANCIAL SERVICES, INC.
By: /s/ Joseph J. Gasper
-----------------------------------------
Name: Joseph J. Gasper
Title: President, Chief Operating Officer
and Director
Attest:
By: /s/ Dennis W. Glick
---------------------------
Secretary
WILMINGTON TRUST COMPANY
as Trustee
By: /s/ Debra Eberly
-----------------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
Attest:
By: /s/ W. Chris Sponenberg
---------------------------
Assistant Secretary
15
<PAGE> 19
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Debenture is exchangeable for Debentures registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No. 1
$206,185,600
CUSIP No. 638612AD3
NATIONWIDE FINANCIAL SERVICES, INC.
7.10% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 2028
NATIONWIDE FINANCIAL SERVICES, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to,
Wilmington Trust Company as Property Trustee under that certain Amended and
Restated Declaration of Trust, dated as of October 19, 1998, among the Trustees
of Nationwide Financial Services Capital Trust II (the "Trust") named therein,
the Company and the holders from time to time of undivided beneficial interests
in the Trust, or registered assigns, the principal sum of Two Hundred and Six
Million, One Hundred Eighty-Five Thousand, Six Hundred Dollars ($206,185,600) on
October 31, 2028, and to pay interest on said principal sum from October 19,
1998, or from
A-1
<PAGE> 20
the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on January 31, April 30, July 31 and
October 31 of each year commencing January 31, 1999, at the rate of 7.10% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded quarterly.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), 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 the relevant
Interest Payment Date. The interest installment so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the regular record date for such interest installment, which
shall be the close of business on the Business Day next preceding such Interest
Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES ARE
NO LONGER REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the close of
business on the ____ Business Day next preceding such Interest Payment Date.]
Any such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holders on such regular record
date and may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of this series
of Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of this Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior
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<PAGE> 21
Indebtedness, and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued below and such continued
provisions shall for all purposes have the same effect as though fully set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated: October 19, 1998
NATIONWIDE FINANCIAL
SERVICES, INC.
By:________________________
Name:
Title
Attest:
By:________________________
Secretary
A-3
<PAGE> 22
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
Dated: October 19, 1998
WILMINGTON TRUST COMPANY
as Trustee
By________________________
Authorized Signatory
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<PAGE> 23
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of October 19, 1998 ("the Base Indenture"), duly
executed and delivered between the Company and Wilmington Trust Company, as
Trustee (the "Trustee"), as supplemented by a First Supplemental Indenture dated
as of October 19, 1998, between the Company and the Trustee (the Base Indenture
as so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. By the terms of the
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate principal amount as
specified in said First Supplemental Indenture.
The Company shall have the right to redeem this Debenture at its option,
without premium or penalty, in whole or in part at any time and from time to
time on or after October 19, 2003 (an "Optional Redemption"), at a redemption
price equal to the principal amount plus any accrued but unpaid interest,
including any Additional Interest, if any, to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this paragraph will be
made upon not less than 30 nor more than 60 days' notice, at the Optional
Redemption Price.
If, at any time, a Special Event (as defined below) shall occur or be
continuing, the Company shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part for
cash at the Optional Redemption Price within 90 days following the occurrence of
such Special Event.
"Special Event" means a Tax Event or an Investment Company Event.
"Tax Event" means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
to the effect that, as a result of (a) any amendment to, or change (including
any announced prospective change) in the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein or (b) any interpretation or application of, or pronouncement with
respect to, such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination), which amendment or change is effective or which interpretation,
application or pronouncement is announced on or after October 14, 1998, there is
more than an insubstantial risk that (i) the Trust would be
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<PAGE> 24
subject to United States federal income tax with respect to income accrued or
received on the Debentures, (ii) interest payable to the Trust on the Debentures
would not be deductible in whole or in part by the Company for United States
federal income tax purposes or (iii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act of 1940, as amended (the "1940 Act"),
to the effect that, as a result of the occurrence of a change in law or
regulation or a written 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"), there is more than an insubstantial risk
that the Trust is or will be considered an investment company which is required
to be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after October 14, 1998.
Any redemption pursuant to the occurrence of a Special Event will be made
upon not less than 30 days nor more than 60 days' notice, at the Optional
Redemption Price. If the Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee; provided that if, at the
time of redemption, the Debentures are registered as a Global Debenture, the
Depositary shall determine the principal amount of such Debentures held by each
Debenture holder to be redeemed in accordance with its procedures.
If a partial redemption of the Debentures would result in the delisting of
the Preferred Securities from any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and may only redeem the
Debentures in whole.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in
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any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) reduce the principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected, or (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive any Default or Event of Default with respect to such
series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right at any time, and from time to time, during the term of the
Debentures to extend the interest payment period of such Debentures for up to 20
consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(including any Additional Interest) together with the interest thereon
compounded quarterly at the rate specified for the Debentures to the extent that
payment of such interest is enforceable under applicable law. In the event that
the Company exercises this right, then (a) the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payments with respect to the foregoing (other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged or (iv)
distributions of rights under any shareholders' rights plan adopted by the
Company), and (b) the Company shall not make any
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payment of interest or principal of (or premium, if any, on) or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that rank pari passu with or junior to such Debentures. The foregoing,
however, will not apply to any stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is being paid.
Prior to the termination of any such Extended Interest Payment Period, the
Company may further extend the interest payment period; provided, that such
Extended Interest Payment Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or extend beyond the
maturity date of the Debenture. At the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid interest and any
additional amount then due, the Company may commence a new Extended Interest
Payment Period, subject to the above requirements.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the Corporate Trust Office of the Trustee in the
City of Wilmington and State of Delaware accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and the Security Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Security Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
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The Debentures of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. This Global
Debenture is exchangeable for Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. Debentures of this series so
issued are issuable only in registered form without coupons in denominations of
$25 and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Debentures of this series so issued
are exchangeable for a like aggregate principal amount of Debentures of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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EXHIBIT 4.4
================================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
DATED AS OF OCTOBER 19, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.....................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...................................4
SECTION 2.2 Lists of Holders of Securities.....................................5
SECTION 2.3 Reports by the Preferred Guarantee Trustee.........................5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee....................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...................5
SECTION 2.6 Events of Default; Waiver..........................................6
SECTION 2.7 Event of Default; Notice...........................................6
SECTION 2.8 Conflicting Interests..............................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee...............6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee......................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.............10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility..........................10
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees.......................................11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.........................................................12
SECTION 5.2 Waiver of Notice and Demand.......................................12
SECTION 5.3 Obligations Not Affected..........................................12
SECTION 5.4 Rights of Holders.................................................13
SECTION 5.5 Guarantee of Payment..............................................14
SECTION 5.6 Subrogation.......................................................14
SECTION 5.7 Independent Obligations...........................................14
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PAGE
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........................................15
SECTION 6.2 Ranking...........................................................15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................................................16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................................................16
SECTION 8.2 Indemnification...................................................16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................17
SECTION 9.2 Amendments........................................................18
SECTION 9.3 Notices...........................................................18
SECTION 9.4 Benefit...........................................................18
SECTION 9.5 Governing Law.....................................................19
SECTION 9.6 Counterparts......................................................19
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<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of October 19, 1998, is executed and delivered by Nationwide Financial Services,
Inc., a Delaware corporation (the "Guarantor"), and Wilmington Trust Company, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Nationwide Financial Services Capital Trust II, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of October 19, 1998, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 8,000,000 preferred securities, having an aggregate
stated liquidation amount of $200,000,000, designated the 7.10% Trust Preferred
Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
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(d) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the City of New York, New York or the City of
Wilmington, Delaware are permitted or required by any applicable law to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the 7.10% Junior Subordinated Deferrable Interest
Debentures due 2028 held by the Property Trustee (as defined in the Declaration)
of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payments
or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid by or on behalf of the Issuer: (i) any accrued and unpaid Distributions (as
defined in Annex I to the Declaration) that are required to be paid on the
Preferred Securities, to the extent the Issuer has funds available therefor,
(ii) the redemption price of $25 per Preferred Security, plus all accrued and
unpaid Distributions to the date of redemption (the "Redemption Price"), to the
extent the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the
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Issuer and (iii) upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred
Securities upon the maturity or redemption of all of the Debentures as provided
in the Declaration) the lesser of (a) the aggregate of the liquidation amount of
$25 per Preferred Security and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, or (b) the amount of assets of the
Issuer remaining for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of October 19, 1998,
among the Guarantor and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing 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 Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee 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 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
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(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"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.
"Preferred Guarantee Trustee" means Wilmington Trust Company, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"66 2/3% in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing 66 2/3% 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 Preferred
Securities.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
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<PAGE> 8
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall, or shall cause the Property Trustee to, provide
the Preferred Guarantee Trustee with a list, in such form as the Preferred
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, (i) within one Business Day after
January 1 and June 30 of each year, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee; provided, that the Guarantor shall not 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 Preferred Guarantee Trustee by
the Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders. Unless supplemented,
amended or restated pursuant to this Section 2.2(a), the Preferred Guarantee
Trustee shall be entitled to rely exclusively on the last List of Holders
provided to it by the Guarantor or any Property Trustee.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after April 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information as required by Section 314 (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 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act.
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Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice; provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice thereof, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
shall have obtained actual knowledge.
SECTION 2.8 CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer its right, title and interest in this Preferred
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
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Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee
Trustee and substantially conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the
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Preferred Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they substantially conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee, or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the Preferred
Guarantee Trustee 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 Preferred Securities Guarantee or indemnity, reasonably satisfactory to the
Preferred Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee 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 Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal matters
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 Guarantor or any of
its Affiliates and may include any of its employees. The Preferred Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court of
competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Preferred Guarantee 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 Preferred
Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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 Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Preferred Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of this
Preferred Securities
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Guarantee, both of which shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (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.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee 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
Preferred Guarantee 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 Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities and
Exchange 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,
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pursuant to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEES.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office by an instrument in writing executed by the Preferred Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take effect until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee, whereupon the resigning Preferred Guarantee Trustee shall be
released and discharged of the trusts and other duties imposed on such trustee
in connection herewith.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Preferred Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Preferred Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Preferred Guarantee Trustee.
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(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued and
owing to such Preferred Guarantee Trustee to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees, to the extent set
forth herein, to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by or on behalf of the Issuer pursuant
to the Declaration), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other
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obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sums payable that results
from the extension of any interest payment period on the Debentures as permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) to the extent permitted by law, any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights under
this Preferred Securities Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the Preferred Guarantee Trustee's
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other Person or entity.
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(c) A Holder may also directly institute a legal proceeding against the
Guarantor to enforce such Holder's right to receive payment under this Preferred
Securities Guarantee without first (i) directing the Preferred Guarantee Trustee
to enforce the terms of this Preferred Securities Guarantee or (ii) instituting
a legal proceeding directly against the Issuer or any other Person or entity.
SECTION 5.5 GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection (i.e., a Covered Person may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Preferred Securities
Guarantee without first instituting a legal proceeding against any other person
or entity). This Preferred Securities Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not previously paid or
upon Distribution to the Holders of the corresponding series of Debentures as
provided in the Declaration.
SECTION 5.6 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default, an event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default or an event of
default under the Indenture or an exercise by the Guarantor of its right to
defer payment of interest as provided in the Indenture and such deferral period,
or any extension thereof, shall be continuing, then (a) the Guarantor shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock or make any guarantee payment with respect thereto (other than
(i) repurchases, redemptions or other acquisitions of shares of capital stock of
the Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of a reclassification of the Guarantor's capital
stock, or the exchange or conversion of any class or series of the Guarantor's
capital stock for any other class or series of the Guarantor's capital stock,
(iii) the purchase of fractional interests in shares of the Guarantor's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged or (iv) distribution of rights under
any shareholders' rights plan adopted by the Company) and (b) the Guarantor
shall not make any payment of interest on, or principal of (or premium, if any,
on), or repay, repurchase or redeem, any debt securities issued by the Guarantor
which rank pari passu with or junior to the Debentures and the Guarantor shall
not make any guarantee payments with respect thereto (other than pursuant to
this Preferred Security Guarantee); provided, however, the Guarantor may declare
and pay a stock dividend where the dividend stock is the same stock as that on
which the dividend is being paid.
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, except any liabilities that
may be made pari passu or junior expressly by their terms, (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock or preferred securities of any
Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION.
This Preferred Securities Guarantee shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of the Debentures to the Holders of all of the
Preferred Securities or (iii) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor 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 in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Preferred Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor 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 Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred
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on such Indemnified Person by this Preferred Securities Guarantee, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, reasonable expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of the Preferred Securities Guarantee.
(d) The Guarantor agrees to pay to the Preferred Guarantee Trustee
compensation for its services as shall be mutually agreed upon by the Guarantor
and the Preferred Guarantee Trustee. The Guarantor shall reimburse the Preferred
Guarantee Trustee upon request for all reasonable out-of-pocket expenses
incurred by it, including the reasonable compensation and expenses of the
Preferred Guarantee Trustee's agents and counsel, except any expense as may be
attributable to the negligence of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. The Guarantor may not consolidate
with or merge with or into, or sell, convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to any Person unless
permitted under Article Eight of the Indenture. In connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture, the Person formed by or surviving such
consolidation or merger or to which such sale, conveyance, transfer or lease
shall have been made, if other than the Guarantor, shall expressly assume all of
the obligations hereunder and under the Declaration.
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SECTION 9.2 AMENDMENTS.
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may be amended only with the prior approval of
the Holders of not less than 662/3% in 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 the outstanding Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval. This Preferred Securities
Guarantee may not be amended, and no amendment hereof that affects the Preferred
Guarantee Trustee's rights, duties or immunities hereunder or otherwise shall be
effective, unless such amendment is executed by the Preferred Guarantee Trustee
(which shall have no obligation to execute any such amendment, but may do so in
its sole discretion).
SECTION 9.3 NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, postage prepaid, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders): Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration.
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders): Nationwide Financial Services, Inc., One Nationwide Plaza, Columbus,
Ohio 43215, Attention: Chief Financial Officer.
(c) If given to any Holder, at the address set forth on the books and
records of the Issuer.
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.
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SECTION 9.4 BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD FOR THE
PRINCIPLES OF ITS CONFLICTS OF LAWS.
SECTION 9.6 COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NATIONWIDE FINANCIAL SERVICES, INC.,
as Guarantor
By: /s/ Joseph J. Gasper
-----------------------------------------
Name: Joseph J. Gasper
Title: President, Chief Operating Officer
and Director
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By: /s/ Debra Eberly
-----------------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
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