As filed with the Securities and Exchange Commission
on November 13, 1998
Registration No. 333-64473
Registration No. 333-64473-01
=================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
GREAT-WEST LIFE & ANNUITY GWL&A FINANCIAL INC.
INSURANCE CAPITAL I
(Exact name of registrant as (Exact name of registrant as
specified in charter) specified in charter)
Delaware Delaware
(State or other jurisdiction (State or other jurisdiction
of incorporation or of incorporation or
organization) organization)
6733 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
applied for 84-1474245
(IRS Employer (IRS Employer
Identification No.) Identification No.)
8515 East Orchard Road
Englewood, Colorado 80111
(303) 689-3000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Mitchell T.G. Graye
Senior Vice President and Chief Financial Officer
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado, 80111
(303) 689-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
Copies To:
David W. Hirsch Lee Meyerson
Cleary, Gottlieb, Steen Simpson Thacher
& Hamilton & Bartlett
One Liberty Plaza 425 Lexington Avenue
New York, NY 10006 New York, New York 10017-3954
(212) 225-2000 (212) 455-2000
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [ ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of earlier effective registration statement for
the same offering. [ ]
If this Form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number
of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
EACH OF THE REGISTRANTS HEREBY AMENDS THIS REGISTRATION STATEMENT
ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL EACH OF THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
=================================================================
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement is being
filed solely for the purpose of filing exhibits to the
Registration Statement, and no changes or additions are being
made hereby to the Prospectus which forms part of the
Registration Statement. Accordingly, the Prospectus has been
omitted from this filing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with issuance and
distribution of the securities being registered, other than
underwriting compensation, are:
Securities Act Filing Fee..................... $ 44,250
New York Stock Exchange Listing Fee........... 88,100
Legal Fees and Expenses....................... 300,000*
Accounting Fees and Expenses.................. 100,000*
Printing and Engraving Fees................... 90,000*
Property Trustee's Fees....................... 6,000*
Miscellaneous................................. 6,650
-------
Total................................... $ 635,000*
========
- ------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation law permits
a corporation to include in its charter documents, and in
agreements between the corporation and its directors and
officers, provisions expanding the scope of indemnification
beyond that specifically provided by the current law.
GWL&A Financial Inc.'s Articles of Incorporation provides
for the indemnification of directors.
GWL&A Financial Inc.'s Bylaws provide for the
indemnification of officers, directors and third parties acting
on behalf of GWL&A Financial Inc. if such person acted in good
faith and in a manner reasonably believed to be in and not
opposed to the best interest of GWL&A Financial Inc.'s, and, with
respect to any criminal action or proceeding, the indemnified
party had no reason to believe his conduct was unlawful.
ITEM 16. EXHIBITS
1* Form of Underwriting Agreement.
3.1** Articles of Incorporation of GWL&A Financial Inc.
3.2** Bylaws of GWL&A Financial Inc.
4.1** Certificate of Trust of Great-West Life & Annuity
Insurance Capital I.
4.2 Form of Amended and Restated Declaration of Trust of
Great-West Life & Annuity Insurance Capital I.
4.3 Form of Indenture between GWL&A Financial Inc. and The
Bank of New York, as Trustee.
4.4 Form of Guarantee Agreement between GWL&A Financial Inc.
and The Bank of New York, as Trustee.
4.5 Form of Capital Security (included in Item 4.2 above).
4.6 Form of Subordinated Debt Security (included in Item 4.3
above).
5.1 Opinion of Richards, Layton & Finger.
5.2 Opinion of Cleary, Gottlieb, Steen & Hamilton.
8.1 Opinion of Cleary, Gottlieb, Steen & Hamilton.
II-1
<PAGE>
12** Calculation of Ratio of Income to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.1** Consent of Deloitte & Touche LLP.
23.2** Consent of Deloitte & Touche LLP.
23.3 Consent of Richards, Layton & Finger (included in its
Opinion filed as Exhibit 5.1).
23.4 Consent of Cleary, Gottlieb, Steen & Hamilton (included
in its Opinion filed as Exhibit 5.2).
24** Powers of Attorney of GWL&A Financial Inc.
25.1** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and
Restated Declaration of Trust of Great-West Life &
Annuity Insurance Capital I.
25.2** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of New
York, as Trustee under the Indenture.
25.3** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of New
York, as Guarantee Trustee under the Guarantee of
GWL&A Financial Inc. for the benefit of holders of the
Capital Securities of Great-West Life & Annuity
Insurance Capital I.
- ------------------------
* To be filed by amendment.
** Previously filed.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that:
(1) for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective, and (2) for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Each of the undersigned Registrants hereby undertakes that,
for the purpose of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, each of the Registrants
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred by
a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
each of the Registrants certifies that it has reasonable grounds
to believe that it has qualified for filing on Form S-3 and has
duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized in Englewood, State of Colorado, on November 12, 1998.
GREAT-WEST LIFE & ANNUITY INSURANCE
CAPITAL I
By: GWL&A Financial Inc., as Sponsor
By: /s/ Mitchell T.G. Graye
--------------------------------
Mitchell T.G. Graye
Senior Vice President, Chief Financial
Officer
Date: November 13, 1998
GWL&A FINANCIAL INC.
By: /s/ William T. McCallum
--------------------------------
William T. McCallum
President and Chief Executive Officer
Date: November 13, 1998
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 1 to the Registration Statement has been
signed below by the following persons on behalf of GWL&A
Financial Inc. in the capacities and on the dates indicated.
Signature and Title Date
/s/ William T. McCallum November 13, 1998
- ---------------------------------
William T. McCallum
President and Chief Executive
Officer and a Director
/s/ Mitchell T.G. Graye November 13, 1998
- ---------------------------------
Mitchell T.G. Graye
Senior Vice President, Chief
Financial Officer
/s/ Glen R. Derback November 13, 1998
- ---------------------------------
Glen R. Derback
Vice President and Controller
* November 13, 1998
- -----------------------------------
James Balog, Director
* November 13, 1998
- -----------------------------------
James W. Burns, Director
II-3
<PAGE>
* November 13, 1998
- -----------------------------------
Orest T. Dackow, Director
* November 13, 1998
- -----------------------------------
Andre Desmarais, Director
November , 1998
- -----------------------------------
Paul Desmarais, Jr., Director
* November 13, 1998
- -----------------------------------
Robert G. Graham, Director
* November 13, 1998
- -----------------------------------
Robert Gratton,
Chairman of the Board
* November 13, 1998
- -----------------------------------
N. Berne Hart, Director
* November 13, 1998
- -----------------------------------
Kevin P. Kavanagh, Director
* November 13, 1998
- -----------------------------------
William Mackness, Director
* November 13, 1998
- -----------------------------------
Jerry E.A. Nickerson, Director
* November 13, 1998
- -----------------------------------
P. Michael Pitfield, Director
* November 13, 1998
- -----------------------------------
Michel Plessis-Belair, Director
* November 13, 1998
- -----------------------------------
Brian E. Walsh, Director
* By: /s/ D. Craig Lennox November 13, 1998
----------------------------
D. Craig Lennox
Attorney-in-fact pursuant to
Powers of Attorney filed herewith.
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION OF EXHIBITS
1* Form of Underwriting Agreement.
3.1** Articles of Incorporation of GWL&A Financial Inc.
3.2** Bylaws of GWL&A Financial Inc.
4.1** Certificate of Trust of Great-West Life & Annuity
Insurance Capital I.
4.2 Form of Amended and Restated Declaration of Trust of
Great-West Life & Annuity Insurance Capital I.
4.3 Form of Indenture between GWL&A Financial Inc. and The
Bank of New York, as Trustee.
4.4 Form of Guarantee Agreement between GWL&A Financial
Inc. and The Bank of New York, as Trustee.
4.5 Form of Capital Security (included in Item 4.2 above).
4.6 Form of Subordinated Debt Security (included in Item
4.3 above).
5.1 Opinion of Richards, Layton & Finger.
5.2 Opinion of Cleary, Gottlieb, Steen & Hamilton.
8.1 Opinion of Cleary, Gottlieb, Steen & Hamilton.
12** Calculation of Ratio of Income to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend.
23.1** Consent of Deloitte & Touche LLP.
23.2** Consent of Deloitte & Touche LLP.
23.3 Consent of Richards, Layton & Finger (included in
its Opinion filed as Exhibit 5.1).
23.4 Consent of Cleary, Gottlieb, Steen & Hamilton
(included in its Opinion filed as Exhibit 5.2).
24** Powers of Attorney of GWL&A Financial Inc.
25.1** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of
New York, as Property Trustee under the Amended and
Restated Declaration of Trust of Great-West Life &
Annuity Insurance Capital I.
25.2** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of
New York, as Trustee under the Indenture.
25.3** Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of
New York, as Guarantee Trustee under the Guarantee
of GWL&A Financial Inc. for the benefit of holders
of the Capital Securities of Great-West Life &
Annuity Insurance Capital I.
----------------
* To be filed by amendment.
** Previously filed.
DRAFT 11/12/98
- -----------------------------------------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
GREAT-WEST LIFE & ANNUITY INSURANCE CAPITAL I
Dated as of , 1998
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
INTERPRETATION AND DEFINITIONS ......................2
Section 1.1 Interpretation and Definitions ...................2
"Administrative Action" .......................................2
"Affiliate" ...................................................2
"Authorized Officer" ..........................................2
"Bankruptcy Event" ............................................2
"Book Entry Interest" .........................................3
"Business Day .................................................3
"Business Trust Act" ..........................................3
"Capital Security .............................................3
"Capital Security Beneficial Owner" ...........................3
"Capital Security Certificate" ................................3
"Certificate" .................................................3
"Certificate of Trust" ........................................3
"Clearing Agency" .............................................4
"Clearing Agency Participant" .................................4
"Closing Date" ................................................4
"Code" ........................................................4
"Commission" ..................................................4
"Common Security" .............................................4
"Common Security Certificate" .................................4
"Compounded Distributions" ....................................4
"Corporate Trust Office" ......................................4
"Covered Person" ..............................................4
"Debenture Issuer" ............................................4
"Debenture Issuer Indemnified Person" .........................4
"Debenture Trustee" ...........................................5
"Debentures" ..................................................5
"Declaration" .................................................5
"Definitive Capital Security Certificates" ....................5
"Delaware Trustee" ............................................5
"Depositary ...................................................5
"Direct Action" ...............................................5
"Distribution" ................................................5
"DTC" .........................................................5
"Exchange Act" ................................................5
"Fiduciary Indemnified Person" ................................5
"Fiscal Year" .................................................5
"Global Certificate" ..........................................5
"Guarantee" ...................................................5
"Holder" ......................................................6
i
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Page
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"Indemnified Person" ..........................................6
"Indenture" ...................................................6
"Indenture Event of Default" ..................................6
"Investment Company" ..........................................6
"Investment Company Act" ......................................6
"Investment Company Event" ....................................6
"Legal Action" ................................................6
"liquidation amount" ..........................................6
"List of Holders" .............................................6
"Majority in Liquidation Amount" ..............................6
"Officers' Certificate" .......................................7
"Outstanding" .................................................7
"Paying Agent" ................................................7
"Payment Amount" ..............................................7
"Person" ......................................................8
"Property Account" ............................................8
"Property Trustee" ............................................8
"Pro Rata" ....................................................8
"Prospectus" ..................................................8
"Quorum" ......................................................8
"Redemption Notice" ...........................................8
"Redemption Price" ............................................8
"Regular Trustee" .............................................8
"Responsible Officer" .........................................8
"Rule 3a-5" ...................................................8
"Securities" ..................................................8
"Securities Act" ..............................................8
"Special Event" ...............................................8
"Sponsor" .....................................................8
"Successor Delaware Trustee" ..................................9
"Successor Entity" ............................................9
"Successor Property Trustee" ..................................9
"Super Majority" ..............................................9
"Tax Event" ...................................................9
"Treasury Regulations" ........................................9
"Trust Enforcement Event" .....................................9
"Trust Indenture Act" .........................................9
"Trustee" or "Trustees" .......................................9
"Trustees' Authorization Certificate" ........................10
"25% in liquidation amount" ..................................10
ii
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Page
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ARTICLE 2
TRUST INDENTURE ACT ................................10
Section 2.1 Trust Indenture Act; Application ................10
Section 2.2 Lists of Holders ................................10
Section 2.3 Reports by the Property Trustee .................11
Section 2.4 Periodic Reports to the Property Trustee ........11
Section 2.5 Evidence of Compliance with Conditions
Precedent .......................................11
Section 2.6 Trust Enforcement Events; Waiver ................11
Section 2.7 Trust Enforcement Event; Notice .................13
ARTICLE 3
ORGANIZATION .......................................14
Section 3.1 Name and Organization ...........................14
Section 3.2 Office ..........................................14
Section 3.3 Purpose .........................................14
Section 3.4 Authority .......................................14
Section 3.5 Title to Property of the Trust ..................15
Section 3.6 Powers and Duties of the Regular Trustees .......15
Section 3.7 Prohibition of Actions by the Trust
and the Trustees ................................18
Section 3.8 Powers and Duties of the Property Trustee .......19
Section 3.9 Certain Duties and Responsibilities of
the Property Trustee ...........................21
Section 3.10 Certain Rights of Property Trustee .............23
Section 3.11 Delaware Trustee ...............................26
Section 3.12 Execution of Documents .........................26
Section 3.13 Not Responsible for Recitals or Issuance
of Securities ..................................26
Section 3.14 Duration of Trust ..............................26
Section 3.15 Mergers ........................................27
Section 3.16 Property Trustee May File Proofs of Claim ......29
ARTICLE 4
SPONSOR ............................................29
Section 4.1 Responsibilities of the Sponsor .................29
Section 4.2 Indemnification Fees and Expenses of
the Trustee .....................................30
Section 4.3 Right to Proceed ................................31
ARTICLE 5
COMMON SECURITIES HOLDER ...........................31
Section 5.1 Debenture Issuer's Purchase of
Common Securities ...............................31
Section 5.2 Covenants of the Common Securities
Holder ..........................................31
iii
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Page
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ARTICLE 6
TRUSTEES ...........................................32
Section 6.1 Number of Trustees ..............................32
Section 6.2 Delaware Trustee 32
Section 6.3 Property Trustee; Eligibility ...................32
Section 6.4 Qualifications of Regular Trustees
and Delaware Trustee Generally ..................33
Section 6.5 Initial Trustees and Initial Delaware
Trustee .........................................33
Section 6.6 Appointment, Removal and Resignation
of Trustees .....................................34
Section 6.7 Vacancies among Trustees ........................36
Section 6.8 Effect of Vacancies .............................36
Section 6.9 Meetings ........................................36
Section 6.10 Delegation of Power ............................37
Section 6.11 Merger, Conversion, Consolidation or
Succession to Business .........................37
ARTICLE 7
TERMS OF SECURITIES ......................................37
Section 7.1 General Provisions Regarding Securities .........37
Section 7.2 Distributions ...................................39
Section 7.3 Redemption of Securities ........................40
Section 7.4 Redemption Procedures ...........................41
Section 7.5 Voting Rights of Capital Securities .............43
Section 7.6 Voting Rights of Common Securities ..............45
Section 7.7 Paying Agent ....................................46
Section 7.8 Transfer of Securities ..........................47
Section 7.9 Transfer and Exchange of Certificates ...........47
Section 7.10 Deemed Security Holders ........................47
Section 7.11 Book Entry Interests ...........................48
Section 7.12 Notices to Clearing Agency .....................48
Section 7.13 Appointment of Successor Clearing Agency .......48
Section 7.14 Definitive Capital Security Certificates .......49
Section 7.15 Mutilated, Destroyed, Lost or Stolen
Certificates ...................................49
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST ...............50
Section 8.1 Dissolution and Termination of Trust ............50
Section 8.2 Liquidation Distribution Upon
Dissolution of the Trust ........................50
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS, TRUSTEES OR OTHER PERSONS .................52
Section 9.1 Liability .......................................52
iv
<PAGE>
Page
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Section 9.2 Exculpation .....................................53
Section 9.3 Fiduciary Duty ..................................53
Section 9.4 Indemnification .................................54
Section 9.5 Outside Businesses ..............................57
ARTICLE 10
ACCOUNTING .........................................57
Section 10.1 Fiscal Year ....................................57
Section 10.2 Certain Accounting and Tax Matters .............57
Section 10.3 Banking ........................................58
Section 10.4 Withholding ....................................58
[Section 10.5 Payment of Taxes and Duties, of the Trust .....58
ARTICLE 11
AMENDMENTS AND MEETINGS ......................................59
Section 11.1 Amendments .....................................59
Section 11.2 Meetings of the Holders; Action by
Written Consent ................................61
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE .........................................63
Section 12.1 Representations and Warranties of the
Property Trustee ...............................63
Section 12.2 Representations and Warranties of the
Delaware Trustee ...............................63
ARTICLE 13
MISCELLANEOUS ................................................64
Section 13.1 Notices .........................................64
Section 13.2 Governing Law ...................................65
Section 13.3 Intention of the Parties ........................65
Section 13.4 Headings ........................................65
Section 13.5 Successors and Assigns ..........................66
Section 13.6 Partial Enforceability ..........................66
Section 13.7 Counterparts ....................................66
v
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST dated
as of _______, 1998 among GWL&A Financial Inc., a Delaware
corporation, as Sponsor, Mitchell T.G. Graye, David G. McLeod and
James L. McCallen, as the initial Regular Trustees, The Bank of
New York, as the initial Property Trustee, and The Bank of New
York (Delaware), as the initial Delaware Trustee, not in their
individual capacities but solely as Trustees, and the holders,
from time to time, of undivided beneficial ownership interests in
the Trust to be issued pursuant to this Declaration.
WHEREAS, Great-West Life & Annuity Insurance Capital I
(the "Trust") was established as a business trust under the
Business Trust Act (as defined herein) pursuant to a Declaration
of Trust dated as of September 28, 1998 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary
of State of the State of Delaware on September 28, 1998 (the
"Certificate of Trust"); and
WHEREAS, the sole purpose of the Trust shall be to
issue and sell certain securities representing undivided
beneficial ownership interests in the assets of the Trust, to
invest the proceeds from such sales in the Debentures issued by
the Debenture Issuer (as those terms are hereinafter defined) and
to engage in only those activities necessary or incidental
thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, desire to amend and restate each and every term and
provision of the Original Declaration.
NOW THEREFORE, it being the intention of the parties
hereto that the Trust constitute a business trust under the
Business Trust Act, and in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged,
the Trustees hereby declare that all assets contributed to the
Trust be held in trust for the benefit of the holders, from time
to time, of the Securities representing undivided beneficial
ownership interests in the assets of the Trust issued herein,
subject to the provisions of this Declaration, and each party,
for the benefit of the other parties and for the benefit of the
holders, hereby amends and restates the Original Declaration in
its entirety and agrees as follows:
<PAGE>
2
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1. Interpretation and 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) 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 and Exhibits are to Articles, Sections and Exhibits of
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise
defined in this Declaration or unless the context otherwise
requires; and
(f) reference to the singular includes the plural and
vice versa.
"Administrative Action" has the meaning given under
definition of "Tax Event".
"Affiliate" has the same meaning as given to that term
in Rule 405 of the Securities Act or any successor rule
thereunder.
"Authorized Officer" of a Person means any Person that
is authorized to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person as
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any
applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any
substantial part of its property or ordering the winding up
or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of
90 consecutive days; or
<PAGE>
3
(b) (i) the commencement by such Person of a voluntary
case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent or the consent by it to the
institution of bankruptcy or insolvency proceedings against
it, (ii) the consent by such Person to the entry of a
decree or order for relief in respect of itself in an
involuntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against such Person, (iii)
the filing by such Person of a petition or answer or
consent seeking reorganization or relief under any
applicable federal or state law, (iv) the consent by such
Person to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other
similar official of such Person or of all or substantially
all of the property of such Person, (v) the making by such
Person of an assignment for the benefit of creditors, or
(vi) the admission by such Person in writing of its
inability to pay its debts generally as they become due and
its willingness to be adjudicated as bankrupt, or the
taking of corporate action by such Person in furtherance of
any such action.
"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 7.11.
"Business Day" means any day other than a Saturday or
Sunday or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
remain closed or a day on which the Corporate Trust Office of the
Property Trustee or the Debenture Trustee is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. ss. 3801 et seq., as it may be
amended from time to time, or any successor legislation.
"Capital Security" has the meaning specified in
Section 7.1.
"Capital Security Beneficial Owner" means, 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).
"Capital Security Certificate" means a certificate
evidencing a Capital Security.
"Certificate" means a Common Security Certificate or a
Capital Security Certificate.
"Certificate of Trust" has the meaning specified in
the recitals hereto.
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4
"Clearing Agency" means an organization registered as
a "clearing agency" pursuant to Section 17A of the Exchange Act
that is acting as depositary for the Capital Securities and in
whose name or in the name of a nominee of that organization shall
be registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"Closing Date" means the date on which the Capital
Securities and Common Securities are issued and sold.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation. A
reference to a specific section of the Code refers not only to
such specific section but also to any corresponding provision of
any federal tax statute enacted after the date of this
Declaration, as such specific section or corresponding provision
is in effect on the date of application of the provisions of this
Declaration containing such reference.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" has the meaning specified in Section
7.1
"Common Security Certificate" means a definitive
certificate in fully registered form evidencing a Common
Security.
"Compounded Distributions" has the meaning set forth
in Section 7.2(a).
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
Property Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Declaration is located at 101 Barclay Street, New York, New York
10286, Attn: Corporate Trust Administration; telecopy no. (212)
815-5917.
"Covered Person" means (a) any officer, director,
shareholder, partner, member, representative, employee or agent
of (i) the Trust or (ii) the Trust's Affiliates; and (b) any
Holder.
"Debenture Issuer" means GWL&A Financial Inc. in its
capacity as issuer of the Debentures under the Indenture or any
successor entity resulting from any consolidation, amalgamation,
merger or other business combination.
"Debenture Issuer Indemnified Person" means (a) any
Regular Trustee; (b) any Affiliate of any Regular Trustee; (c)
any officers, directors, shareholders, members, partners,
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5
employees, representatives or agents of any Regular Trustee or
any Affiliate thereof; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"Debenture Trustee" means The Bank of New York, in its
capacity as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor
trustee.
"Debentures" means the % Junior Subordinated
Debentures due 2028 to be issued by the Debenture Issuer under
the Indenture to be held by the Property Trustee.
"Declaration" means this Amended and Restated
Declaration of Trust, as the same may be modified, amended or
supplemented in accordance with the applicable provisions hereof,
including (i) all exhibits, and (ii) for all purposes of this
Declaration and any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.
"Definitive Capital Security Certificates" has the
meaning set forth in Section 7.11.
"Delaware Trustee" has the meaning set forth in
Section 6.2.
"Depositary" means, with respect to Securities
issuable in whole or in part in the form of one or more Global
Certificates, a clearing agency registered pursuant to Section
17A of the Exchange Act that is designated to act as Depositary
for such Securities.
"Direct Action" shall have the meaning set forth in
Section 7.5(c).
"Distribution" means a distribution payable to Holders
in accordance with Section 7.2.
"DTC" means The Depository Trust Company, the initial
Depositary.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 9.4(b).
"Fiscal Year" has the meaning set forth in Section
10.1.
"Global Certificate" has the meaning set forth in
Section 7.11.
"Guarantee" means the guarantee agreement of the
Sponsor in respect of the Securities.
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6
"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;
provided, however, that in determining whether the Holders of the
requisite liquidation amount of Capital Securities have voted on
any matter provided for in this Declaration, then for the purpose
of such determination only (and not for any other purpose
hereunder), if the Capital Securities remain in the form of one
or more Global Certificates, the term "Holders" shall mean the
holder of the Global Certificate acting at the direction of the
Capital Security Beneficial Owners.
"Indemnified Person" means a Debenture Issuer
Indemnified Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 1998,
between the Debenture Issuer and the Debenture Trustee, and any
indenture supplemental thereto pursuant to which the Debentures
are to be issued.
"Indenture Event of Default" has the meaning given to
the term "Event of Default" in the Indenture.
"Investment Company" means an investment company as
defined in the Investment Company Act and the regulations
promulgated thereunder.
"Investment Company Act" means the Investment Company
Act of 1940, as amended from time to time, or any successor
legislation.
"Investment Company Event" means the receipt by the
Trust of an opinion of counsel, rendered by a law firm
experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority (a "Change in Investment Company Act Law"), the Trust
is or will be considered an "investment company" that is required
to be registered under the Investment Company Act, which Change
in Investment Company Act Law becomes effective on or after the
Closing Date.
"Legal Action" has the meaning set forth in Section
3.6(g).
"List of Holders" has the meaning specified in Section
2.2(a).
"Majority in Liquidation Amount" means Holder(s) of
Outstanding Securities, voting together as a single class, or, as
the context may require, Holders of Outstanding Capital
Securities or Holders of Outstanding Common Securities, voting
separately as a class, who are the record owners of more than 50%
of the aggregate liquidation amount of all Outstanding Securities
of the relevant class.
"Officers' Certificate" means, with respect to any
Person (other than Regular Trustees who are natural persons), a
certificate signed by two Authorized Officers of such
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7
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer 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;
provided, that the term "Officers' Certificate", when used with
reference to Regular Trustees who are natural persons shall mean
a certificate signed by two of the Regular Trustees which
otherwise satisfies the foregoing requirements.
"Outstanding" when used with respect to the
Securities, means, as of the date of determination, all
Securities theretofore executed and delivered under this
Declaration, except: (i) Securities canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been deposited with the Property Trustee or
any Paying Agent; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant
to this Declaration; and (iii) Securities that have been paid or
in exchange for or in lieu of which other Securities have been
executed pursuant to Section 7.11, 7.14 or 7.15; provided,
however, that in determining whether the Holders of the requisite
liquidation amount of the Outstanding Capital Securities have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Capital Securities owned by the
Sponsor, any Trustee or any Affiliate of the Sponsor or any
Trustee shall be disregarded and deemed not to be Outstanding,
except that (x) in determining whether any Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Capital
Securities that such Trustee actually knows to be so owned shall
be so disregarded, and (y) the foregoing shall not apply at any
time when all of the Outstanding Capital Securities are owned by
the Sponsor, one or more of the Trustees and/or any such
Affiliate. Capital Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee such pledgee's
right so to act with respect to such Capital Securities and that
such pledgee is not the Sponsor or any affiliate of the Sponsor.
"Paying Agent" has the meaning specified in Section
7.7.
"Payment Amount" has the meaning specified in Section
7.2(a).
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust,
<PAGE>
8
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Property Account" has the meaning set forth in
Section 3.8(c).
"Property Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder according to
the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount
of all Securities Outstanding.
"Prospectus" means the final Prospectus dated November
__, 1998 relating to the Capital Securities.
"Quorum" means a majority of the Regular Trustees or,
if there are only two Regular Trustees, both of them.
"Redemption Notice" has the meaning set forth in
Section 7.4.
"Redemption Price" has the meaning set forth in
Section 7.3.
"Regular Trustee" means any Trustee other than the
Property Trustee and the Delaware Trustee.
"Responsible Officer" means, with respect to the
Property Trustee, any officer within the Corporate Trust Office
of the Property Trustee with direct responsibility for the
administration of the Declaration and also means, with respect to
a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act or any successor rule thereunder.
"Securities" means the Common Securities and the
Capital Securities.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Special Event" means a Tax Event or an Investment
Company Event.
"Sponsor" means GWL&A Financial Inc., a Delaware
corporation, or any successor entity resulting from a merger,
consolidation, amalgamation or other business combination, in its
capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified
in Section 6.6(b).
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9
"Successor Entity" has the meaning specified in
Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified
in Section 6.6(b).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" means the receipt by the Trust of an
opinion of counsel experienced in such matters to the effect
that, as a result of (a) any amendment to or change (including
any announced prospective change) in the laws or any regulations
thereunder of the United States or any political subdivision or
taxing authority thereof, or therein or (b) any judicial decision
or any official administrative pronouncement (including any
private letter ruling, technical advice memorandum or Chief
Counsel advice, as defined by the Code) or regulatory procedure
(an "Administrative Action"), regardless of whether such judicial
decision or Administrative Action is issued to or in connection
with a proceeding involving the Debenture Issuer or the Trust and
whether or not subject to review or appeal, which amendment,
change, decision or Administrative Action is enacted, released by
the Internal Revenue Service, promulgated or announced, in each
case, on or after the date of the Prospectus, there is more than
an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to the United States
federal income tax with respect to income received or accrued on
the Debentures, (ii) interest payable by the Debenture Issuer or
original issue discount accruing on such Debentures is not, or
within 90 days of the date of such opinion, will not be,
deductible by the Debenture Issuer, in whole or in part, for
United States federal income tax purposes, or (iii) the Trust is,
or will be within 90 days of the date of such opinion, subject to
more than a de minimis amount of other taxes, duties or other
governmental charges.
"Treasury Regulations" means the income tax
regulations, including temporary and proposed regulations,
promulgated under the Code by the United States Treasury, as such
regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities
means an Indenture Event of Default has occurred and is
continuing in respect of the Debentures.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has
signed this Declaration as a trustee, so long as such Person
shall continue in office in accordance with the terms hereof, and
all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trustees' Authorization Certificate" means a written
certificate signed by two of the Regular Trustees for the purpose
of establishing the terms and form of the Capital Securities and
the Common Securities as determined by the Regular Trustees.
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10
"25% in Liquidation Amount" means Holder(s) of
Outstanding Securities, voting together as a single class, or, as
the context may require, Holders of Outstanding Capital
Securities or Holders of Outstanding Common Securities, voting
separately as a class, who are the record owners of 25% or more
of the aggregate liquidation amount of all Outstanding Securities
of the relevant class.
ARTICLE 2
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
which is a trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the Trust's classification as a
grantor trust for United States Federal income tax purposes and
shall not affect the nature of the Securities as representing
undivided beneficial ownership interests in the assets of the
Trust.
Section 2.2 Lists of Holders.
(a) The Sponsor on behalf of the Trust shall provide
the Property Trustee with a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") (i) semi-annually,
not later than _______________ __ and _______________ __ of each
year and (ii) at any other time, within 30 days of receipt by the
Trust of a written request from the Property Trustee for a List
of Holders as of a date no more than 15 days before such List of
Holders is given to the Property Trustee; provided that neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such
capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List
of Holders.
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11
(b) The Property Trustee shall comply with its
obligations under, and shall be entitled to the benefits of,
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year (commencing
with the year of the first anniversary of the issuance of the
Capital Securities), the Property Trustee shall provide to the
Holders of the Capital Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
Section 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 (if any) as required by
Section 314 of the Trust Indenture Act 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, provided that such compliance
certificate shall be delivered on or before 120 days after the
end of each calendar year.
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 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of
the Capital Securities may, by vote, on behalf of the Holders of
all of the Capital Securities, waive any past Trust Enforcement
Event in respect of the Capital Securities and its consequences,
provided that, if the underlying Indenture Event of Default:
(i) is not waivable under the Indenture, the
Trust Enforcement Event under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than
a majority in principal amount of the
holders of the Debentures (a "Super
Majority") to be waived under the Indenture,
the Trust Enforcement Event under the
Declaration may only be waived by the vote
of the Holders of at least the proportion in
liquidation amount of the Capital Securities
that the relevant Super Majority represents
of the aggregate principal amount of the
Debentures Outstanding.
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12
The foregoing provisions of this Section 2.6(a) shall
be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act,
and such Section 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Trust
Enforcement Event with respect to the Capital Securities arising
therefrom shall be deemed to have been cured, for every purpose
of this Declaration and the Capital Securities, but no such
waiver shall extend to any subsequent or other Trust Enforcement
Event with respect to the Capital Securities or impair any right
consequent thereon. Any waiver by the Holders of the Capital
Securities of a Trust Enforcement Event with respect to the
Capital Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Trust
Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or
consent of the Holders of the Common Securities.
(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 Trust Enforcement
Event in respect of the Common Securities and its consequences,
provided that, if the underlying Indenture Event of Default:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities
are deemed to have waived such Trust
Enforcement Event under the Declaration as
provided below in this Section 2.6(b), the
Trust Enforcement Event under the Declaration
shall also not be waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived under the Indenture,
except where the Holders of the Common
Securities are deemed to have waived such
Trust Enforcement Event under the
Declaration as provided below in this
Section 2.6(b), the Trust Enforcement Event under
the Declaration may only be waived by the
vote of the Holders of at least the
proportion in liquidation amount of the
Common Securities that the relevant Super
Majority represents of the aggregate
principal amount of the Debentures
Outstanding;
provided, further, that each Holder of Common Securities will be
deemed to have waived any Trust Enforcement Event and all Trust
Enforcement Events with respect to the Common Securities and the
consequences thereof until all Trust Enforcement Events with
respect to the Capital Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events
with respect to the Capital Securities have been so cured, waived
or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the Holders of the Capital
Securities and only the Holders of the Capital Securities will
have the right to direct the Property Trustee in accordance with
the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act, and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to
the foregoing provisions of this Section 2.6(b), upon such waiver, any
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13
such default shall cease to exist and any Trust Enforcement Event
with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration,
but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Common Securities or impair
any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the
Property Trustee at the direction of the Holders of the Capital
Securities constitutes a waiver of the corresponding Trust
Enforcement Event with respect to the Capital Securities under
this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture
Act, and such Section 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.7 Trust Enforcement Event; Notice.
(a) The Property Trustee shall, within 90 days after
the occurrence of a Trust Enforcement Event, transmit by
registered or certified mail, to the Holders, 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 Indenture Event of Default, not including any
periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for
a default in the payment of principal of or interest on any of
the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer
of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 501(1) and 501(2)
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
this Declaration shall have actual
knowledge.
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization.
The Trust is named "Great-West Life & Annuity
Insurance Capital I", as such name may be modified from time to
time by the Regular Trustees following written notice to the
Delaware Trustee, the Property Trustee and the Holders. 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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14
Section 3.2 Office.
The address of the principal office of the Trust is
c/o GWL&A Financial Inc., 8515 East Orchard Road, Englewood,
Colorado 80111, Attn: Secretary. On ten Business Days' written
notice to the Delaware Trustee, the Property Trustee and the
Holders, the Regular Trustees may designate another principal
office. The address of the Delaware Trustee in the State of
Delaware is White Clay Center, Route 273, Newark, Delaware 19711,
or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Holders, the
Sponsor, the Property Trustee and the Regular Trustee.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are
(a) to issue and sell Securities and use the gross proceeds from
such sale to acquire the Debentures, and (b) except as otherwise
limited herein, to engage in only those other activities
necessary or incidental thereto. Without limiting the generality
of the preceding sentence, the Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments,
mortgage or 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 or cause the Debentures to be treated
as other than indebtedness of the Debenture Issuer for United
States federal income tax purposes.
The Trust is intended to 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 owners of
the Capital Securities and the Common Securities will be treated
as the owners of the Trust's assets for United States federal
income tax purposes and, consequently, such owners will include
directly in their gross income their pro rata share of the income
paid or accrued on the Debentures as if the Trust did not exist.
By the acceptance of this Declaration, none of the Trustees, the
Sponsor, the Holders or the Capital Securities Beneficial Owners
will take any position for United States federal income tax
purposes which is contrary to the classification of the Trust as
a grantor trust. The provisions of this Declaration shall be
interpreted to further this classification.
Section 3.4 Authority.
(a) Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee,
the Regular Trustees shall have exclusive authority to carry out
the purposes of the Trust. An action taken by the Regular
Trustees in accordance with their powers shall constitute the act
of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its
powers shall constitute the act of and serve to bind the Trust.
In dealing with the Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
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15
(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 two such Regular Trustees; and
(c) Except as required by applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority
to cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided
beneficial 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 establish the terms and form of the Capital
Securities and the Common Securities in the manner specified in
Section 7.1 and issue and sell the Capital Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of
Capital Securities and no more than one series of Common
Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to a one-time,
simultaneous issuance of both Capital Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the
Capital Securities to:
(i) execute and file any documents prepared by
the Sponsor, or take any acts as determined
by the Sponsor to be necessary, in order to
qualify or register all or part of the
Capital Securities under the Securities Act
and in any State under applicable state
securities or blue sky laws in which the
Sponsor has determined to qualify or
register such Capital Securities for sale
and the qualification of this Declaration as
a trust indenture under the Trust Indenture
Act;
(ii) if deemed necessary or desirable by the
Sponsor, execute and file an application,
prepared by the Sponsor, to the New York
Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq National Market
for listing upon notice of issuance of any
Capital Securities, the Guarantees and the
Debentures; and
<PAGE>
16
(iii) if deemed necessary or desirable by the
Sponsor, execute and file with the
Commission a registration statement on Form
8-A, including any amendments thereto,
prepared by the Sponsor, relating to the
registration of the Capital Securities, the
Guarantees and the Debentures under Section
12(b) of the Exchange Act.
(c) to acquire the Debentures with the proceeds of the
sale of the Capital Securities and the Common Securities;
provided, however, that the Regular Trustees shall cause legal
title to the Debentures to be held of record in the name of the
Property Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
provided that the Regular Trustees shall consult with the Sponsor
and the Property Trustee before taking or refraining from taking
any action in relation to any such Special Event;
(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 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 to conduct only those
services that the Regular Trustees have authority to conduct
directly, and to pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) 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;
(k) to incur expenses that are necessary or incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities or to appoint a
Paying Agent for the Securities as provided in Section 7.7;
<PAGE>
17
(m) 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 Debentures as
authorized by the Indenture;
(n) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware
and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to execute and deliver closing certificates, if
any, pursuant to the Underwriting Agreement and application for a
taxpayer identification number for the Trust.
(p) to take any action, not inconsistent with
applicable law, the Certificate of Trust or the Declaration, that
the Sponsor and Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the purposes and
functions of the Trust as set out in Section 3.3 or the
activities of the Trust as set out in this Section 3.6, as long
as such actions do not materially and adversely affect the
interests of the Holders of the Capital Securities, 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.
(q) 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
(r) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing.
The Regular Trustees shall exercise the powers set
forth in this Section 3.6 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and
the Regular Trustees shall have no power to, and shall not, take
any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3 and in no event will the
Regular Trustees take any action pursuant to this Section 3.6 or
any other provision herein that would constitute discretionary
control over the assets of the Trust for purposes of Section
3(21) of the Employee Retirement Income Security Act of 1974, as
amended.
<PAGE>
18
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.
The Regular Trustees shall take all actions on behalf
of the Trust in a manner that is consistent with the purposes and
functions of the Trust as set forth in Section 3.3 that are not
specifically required by the Declaration to be taken by any other
Trustee.
Pursuant to Section 1009 of the Indenture, any
expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
Section 3.7 Prohibition of Actions by the Trust and
the Trustees.
(a) The Trust shall not, and the Trustees (including
the Property Trustee) shall not take any action to cause the
Trust to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Property Trustee) shall not
cause the Trust to:
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall
distribute all such proceeds to Holders
pursuant to the terms of this Declaration
and of the Securities;
(ii) acquire any assets other than the Debentures
(and any interest or proceeds received
thereon);
(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;
(vi) possess any power or otherwise act in such a
way as to vary the terms of the Securities
in any way whatsoever (except to the extent
expressly authorized in this Declaration or
by the terms of the Securities);
(vii) issue any securities or other evidences of
beneficial ownership of, or beneficial
interest in, the Trust other than the
Securities;
(viii) other than as provided in this Declaration
or by the terms of the Securities, (A)
direct the time, method and place of
conducting any proceeding for any remedy
available to the Debenture Trustee or
exercising any trust or power conferred upon
the Debenture Trustee with respect to the
Debentures, (B) waive any past default that
is waivable under the Indenture, (C)
exercise any right to
<PAGE>
19
rescind or annul any declaration that the
principal of all the Debentures shall be due
and payable, or (D) consent to any
amendment, modification or termination of
the Indenture or the Debentures, where such
consent shall be required without, in each
case, obtaining (x) the prior approval of
the Majority in Liquidation Amount of the
Capital Securities; provided, however, that
where a consent under the Indenture would
require the consent of each holder of the
Debentures affected thereby, no such consent
shall be given by the Property Trustee
without the prior consent of each holder of
Capital Securities and (y) an opinion of
counsel to the effect that such modification
will not cause more than an insubstantial
risk that the Trust will be deemed an
Investment Company required to be registered
under the Investment Company Act, or the
Trust will not be classified as a grantor
trust for United States federal income tax
purposes or the Debentures will not be
treated as indebtedness of the Debenture
Issuer for United States federal income tax
purposes;
(ix) take any action inconsistent with the status
of the Trust as a grantor trust for United
States federal income tax purposes or
inconsistent with the treatment of the
Debentures as indebtedness of the Debenture
Issuer for United States federal income tax
purposes; or
(x) revoke any action previously authorized or
approved by a vote of the Holders of the
Capital Securities except pursuant to a
subsequent vote of the Holders of the
Capital Securities.
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 Trust and the Holders in accordance
with this Declaration. 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 Sections 6.3 and 6.6. Such vesting and cessation
of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(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).
(c) The Property Trustee shall:
(i) establish and maintain a segregated
non-interest bearing trust account (the
"Property Account") in the name of and under
the exclusive control of the Property
Trustee on behalf of the Holders
<PAGE>
20
and, upon the receipt of payments of funds
made in respect of the Debentures held by
the Property Trustee, deposit such funds
into the Property Account and make payments
to the Holders from the Property Account in
accordance with Section 7.2. Funds in the
Property Account shall be held uninvested
until disbursed in accordance with this
Declaration. The Property Account shall be
an account that is maintained with a banking
institution the rating on whose long-term
unsecured indebtedness is categorized as at
least "investment grade" by a "nationally
recognized statistical rating organization,"
as that term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect
the redemption of the Capital Securities and
the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued
by the Regular Trustees in accordance with
the terms of the Securities, engage in such
ministerial activities as so directed and as
shall be necessary or appropriate to effect
the distribution of the Debentures to
Holders.
(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 3.9(a), the Property Trustee
shall take any Legal Action which arises out of or in connection
with (i) a Trust Enforcement Event of which a Responsible Officer
of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Property Trustee shall continue to serve as a
Trustee until either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed
to the Holders pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee (as defined
herein) has been appointed and has accepted
that appointment in accordance with Section
6.6.
(g) Subject to such limitations as are necessary to
ensure compliance with Section 3.3, the Property Trustee shall
have the legal power to exercise all of the rights, powers and
privileges of a holder of Debentures under the Indenture and, if
a Trust Enforcement Event actually known to a Responsible Officer
of the Property Trustee occurs and is continuing, the Property
Trustee shall, for the benefit of Holders, enforce its rights as
holder of the Debentures subject to the rights of the Holders
pursuant to the terms of this Declaration and the Securities.
<PAGE>
21
(h) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the
authority of the Regular Trustees set forth in Section 3.6.
The Property Trustee shall exercise the powers set
forth in this Section 3.8 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and
the Property Trustee shall have no power to, and shall not, take
any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of
the Property Trustee.
(a) The Property Trustee, before the occurrence of any
Trust Enforcement Event and after the curing of all Trust
Enforcement Events that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Declaration and in the Securities and no implied covenants shall
be read into this Declaration or the Securities against the
Property Trustee. In case a Trust Enforcement Event has occurred
and is continuing, of which a Responsible Officer of the Property
Trustee has actual knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(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 a Trust
Enforcement Event and after the curing or
waiving of all such Trust Enforcement Events
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 Securities,
and the Property Trustee shall not be
liable except for the performance of
such duties and obligations as are
specifically set forth in this
Declaration, and no implied covenants
or obligations shall be read into this
Declaration or the Securities against
the Property Trustee; and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property
Trustee may conclusively rely, as to
the truth of the statements and the
correctness of the opinions expressed
therein, upon any certificates or
opinions furnished to the Property
Trustee and conforming to the
requirements of this Declaration; 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
<PAGE>
22
to examine the same to determine
whether or not they 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 without negligence, in
good faith in accordance with the direction
of the Holders of not less than a Majority
in Liquidation Amount of the Securities
relating to the time, method and place of
conducting any proceeding for any remedy
available to the Property Trustee, or
exercising any trust or power conferred upon
the Property Trustee under this Declaration;
(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 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 Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and
except to the extent otherwise required by
law; and
<PAGE>
23
(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 shall the Property Trustee
be liable for any 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 (or, with
respect to the establishment of the terms
and form of the Securities by the Regular
Trustees, by a Trustees' Authorization
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 re- registration
thereof;
(v) the Property Trustee may consult with
counsel of its choice or other experts, and
the advice or opinion of such counsel and
experts with respect to legal matters or
advice within the scope of such experts'
area of expertise shall be full and complete
authorization and protection in respect of
any action taken, suffered or omitted by it
hereunder in good faith and in accordance
with such advice or opinion; such counsel
may be counsel to the Sponsor or any of its
Affiliates and may include any of its
<PAGE>
24
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 of any Holder, unless such
Holder has provided the Property Trustee
reasonable indemnity 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)
shall be taken to relieve the Property
Trustee, upon the occurrence of an Indenture
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;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust
and the Holders, and the signature of the
Property Trustee or its agents alone shall
be sufficient and effective to perform any
such action, and no third party shall be
required to inquire as to the authority of
the Property Trustee to so act or as to its
compliance with any of the terms and
provisions of this Declaration, both of
which shall be conclusively evidenced by the
Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem
it desirable to receive instructions with
respect to enforcing any remedy or right or
taking any other action hereunder, the
Property Trustee (i) may request
instructions from the Holders which
instructions may only be given by the
Holders of the same proportion in
liquidation amount of the Securities as
would be entitled to direct the Property
Trustee under the terms of the Securities in
respect of such remedy, right or action,
(ii) may
<PAGE>
25
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;
(xi) if no Trust Enforcement Event has occurred
and is continuing and the Property Trustee
is required to decide between alternative
causes of action, construe ambiguous
provisions in this Declaration or is unsure
of the application of any provision of this
Declaration, and the matter is not one on
which Holders of Capital Securities are
entitled under the Declaration to vote, then
the Property Trustee may, but shall be under
no duty to, take such action as is directed
by the Sponsor and will have no liability
except for its own bad faith, negligence or
willful misconduct;
(xii) except as otherwise expressly provided by
this Declaration, the Property Trustee shall
not be under any obligation to take any
action that is discretionary under the
provisions of this Declaration; and
(xiii) the Property Trustee shall not be liable
for any action taken, suffered or omitted to
be taken by it without negligence, in good
faith and reasonably believed by it to be
authorized or within the discretion, rights
or powers conferred upon it by this
Declaration.
(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.
(c) Without prejudice to any other rights available to
the Property Trustee under applicable law, in the event that the
Property Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, such expenses (including the
fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration
under any bankruptcy law or law relating to creditors rights
generally.
(d) The Property Trustee shall not be charged with
knowledge of an Indenture Event of Default or a Trust Enforcement
Event unless a Responsible Officer of the Property Trustee
obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from any Holder.
(e) Any action taken by the Property Trustee or its
agents in accordance with the terms hereof shall bind the Trust
and the Holders, and the signature of the Property Trustee or its
duly authorized agents alone shall be sufficient and effective to
perform any such action, and no
<PAGE>
26
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.
Section 3.11 Delaware Trustee.
Notwithstanding any provision of this Declaration
other than Section 6.2, the Delaware Trustee shall not be
entitled to exercise any powers, and the Delaware Trustee shall
not have any of the duties and responsibilities of the Regular
Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 6.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act. In the
event the Declaration Trustee shall at any time be required to
take any action or perform any duty hereunder, the Delaware
Trustee shall be entitled to the benefits of Section
3.9(b)(ii)-(viii) and Section 3.10. No implied covenants or
obligations shall be read into this Declaration against the
Delaware Trustee.
Section 3.12 Execution of Documents.
Except as otherwise required by applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust
any documents that the Regular Trustees have the power and
authority to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance
of Securities.
The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and
the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value
or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or
sufficiency of this Declaration, the Securities or the Debentures
or the Indenture.
Section 3.14 Duration of Trust.
The Trust shall exist until dissolved pursuant to the
provisions of Article 8 hereof.
Section 3.15 Mergers.
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described in Sections 3.15(b) and (c) and Section 8.2.
(b) The Trust may, at the request of the Sponsor, with
the consent of the Regular Trustees and without the consent of
the Holders, the Delaware Trustee or the Property Trustee merge
with or into, consolidate, amalgamate, be replaced by or convey,
transfer or lease its properties substantially as an entirety to
a trust organized as such under the laws of any State; provided
that:
<PAGE>
27
(i) if the Trust is not the successor, such
successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the
obligations of the Trust with respect
to the Capital Securities; or
(B) substitutes for the Capital Securities
other securities having substantially
the same terms as the Capital
Securities (the "Successor Securities")
so long as the Successor Securities
rank the same as the Capital Securities
rank in priority with respect to
Distributions and payments upon
liquidation, redemption and otherwise;
(ii) if the Trust is not the Successor Entity,
the Sponsor expressly appoints a trustee of
such Successor Entity possessing the same
powers and duties as the Property Trustee as
the holder of the Debentures;
(iii) the Capital Securities or the Successor
Securities are listed, or any Successor
Securities will be listed upon notification
of issuance, on any national securities
exchange or any inter-dealer quotation
system on which the Capital Securities are
then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease
does not cause the Capital Securities
(including any Successor Securities) to be
downgraded by any nationally-recognized
statistical rating organization that then
assigns a rating to the Capital Securities;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease
does not adversely affect the rights,
preferences and privileges of the Holders of
the Capital Securities (including the
holders of any Successor Securities) in any
material respect;
(vi) such Successor Entity has a purpose
substantially identical to that of the
Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance,
transfer or lease, the Sponsor has received
an opinion from independent counsel to the
Trust experienced in such matters to the
effect that:
(A) such merger, consolidation,
amalgamation, replacement, conveyance,
transfer or lease does not adversely
affect the
<PAGE>
28
rights, preferences and privileges
of the Holders of the Capital
Securities (including the holders of
any Successor Securities) in any
material respect; and
(B) following such merger, consolidation,
amalgamation, replacement, conveyance,
transfer or lease, (1) neither the
Trust nor the Successor Entity will be
required to register as an Investment
Company under the Investment Company
Act; and (2) the Trust or the Successor
Entity will continue to be classified
as a grantor trust for United States
federal income tax purposes;
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities
of such Successor Entity and guarantees the
obligations of such Successor Entity under
the Successor Securities at least to the
extent provided by the Guarantee; and
(ix) such Successor Entity (if not the Trust)
expressly assumes all of the obligations of
the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall
not, except with the consent of Holders of 100% in aggregate
liquidation amount of the Capital Securities, consolidate,
amalgamate, merge with or into, be replaced by or convey,
transfer or lease its properties and assets substantially as an
entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or Successor
Entity to be classified as an association taxable as a
corporation or as other than a grantor trust for United States
federal income tax purposes and each Holder of the Capital
Securities not be treated as owning an undivided interest in the
Debentures or cause the Debentures to be treated as other than
indebtedness of the Debenture Issuer for United States federal
income tax purposes.
Section 3.16 Property Trustee May File Proofs of
Claim.
In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition
or other similar judicial proceeding relative to the Trust or any
other obligor upon the Securities or the property of the Trust or
of such other obligor or their creditors, the Property Trustee
(irrespective of whether any Distributions on the Securities
shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property
Trustee shall have made any demand on the Trust for the payment
of any past due Distributions) shall be entitled and empowered,
to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of
any Distributions owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Property Trustee
(including any claim
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29
for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, and its counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property
Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Property Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances
of the Property Trustee, its agents and counsel, and any other
amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize
the Property Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or compensation affecting the Securities
or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
ARTICLE 4
SPONSOR
Section 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission and execute on behalf of the Trust registration
statements on the applicable form, including any amendments
thereto, pertaining to the Capital Securities, the Guarantee and
the Debentures;
(b) to determine the States in which to take
appropriate action to qualify or register for sale all or part of
the Capital Securities and to do any and all such acts, other
than actions which must be taken by the Trust, and advise the
Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States, including the rules and
regulations of any agency or other governmental authorities
thereof;
(c) to prepare for filing by the Trust an application
to the New York Stock Exchange, Inc. or any other national stock
exchange or The Nasdaq National Market for listing or quotation
upon notice of issuance of any Capital Securities, the Guarantee
and the Debentures;
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30
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A, including any
amendments thereto, relating to the registration of the Capital
Securities, the Guarantee and the Debentures under Section 12(b)
of the Exchange Act; and
(e) to negotiate the terms of, and execute and
deliver, on behalf of the Trust, an underwriting agreement and
other related agreements providing for the sale of the Capital
Securities.
Section 4.2 Indemnification Fees and Expenses of the
Trustee.
Pursuant to Section 1009 of the Indenture, the
Sponsor, in its capacity as Debenture Issuer, agrees:
(a) to pay to the Property Trustee and the
Delaware Trustee from time to time such compensation
as shall be agreed in writing with the Sponsor for all
services rendered by them 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) except as otherwise expressly provided
herein, to reimburse the Property Trustee and the
Delaware Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made
by such Trustees in accordance with any provision of
this Declaration (including the reasonable
compensation and the expenses and disbursements of
their duly authorized agents and counsel), except any
such expense, disbursement or advance as may be
attributable to their negligence, bad faith or willful
misconduct; and
(c) to indemnify the Property Trustee and the
Delaware Trustee or any predecessor Property Trustee
or Delaware Trustee for, and to hold each of them
harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence, bad
faith or willful misconduct on the part of the
Property Trustee or the Delaware Trustee, as the case
may be, arising out of or in connection with the
acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of
defending either of them against any claim or
liability in connection with the exercise or
performance of any of their respective powers or
duties hereunder. The provisions of this Section shall
survive the resignation or removal of the Delaware
Trustee or the Property Trustee or the termination of
this Declaration.
Section 4.3 Right to Proceed
The Sponsor acknowledges the rights of the Holders of
Capital Securities, in the event of a failure of the Debenture
Issuer to make any required payment on the Debentures when due
under the Indenture, to directly institute a proceeding against
the Debenture Issuer for enforcement of its payment obligations
on the Debentures.
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31
ARTICLE 5
COMMON SECURITIES HOLDER
Section 5.1 Debenture Issuer's Purchase of Common
Securities.
On the Closing Date, the Debenture Issuer will
purchase all of the Common Securities issued by the Trust, for an
amount at least equal to 3% of the capital of the Trust, at the
same time as the Capital Securities are sold.
Section 5.2 Covenants of the Common Securities
Holder.
For so long as the Capital Securities remain
Outstanding, the Sponsor will covenant (i) to maintain directly
or indirectly 100% ownership of the Common Securities, provided,
however, that any permitted successor of the Sponsor under the
Indenture may succeed to the Sponsor's ownership of such Common
Securities, (ii) to cause the Trust to remain a statutory
business trust and not to voluntarily dissolve, wind up,
liquidate or be terminated, except as permitted by this
Declaration, (iii) to use its commercially reasonable efforts to
ensure that the Trust will not be an Investment Company, and (iv)
to take no action which would be reasonably likely to cause the
Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal
income tax purposes or that would be reasonably likely to cause
the Debentures to fail or cease to be treated as indebtedness of
the Debenture Issuer for United States federal income tax
purposes.
ARTICLE 6
TRUSTEES
Section 6.1 Number of Trustees.
The number of Trustees initially shall be five 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 or by written consent in lieu of such meeting;
provided that the number of Trustees shall be at least three; and
provided further that (1) the Delaware Trustee, in the case of a
natural person, shall be a person who is a resident of the State
of Delaware or that, if not a natural person, is an entity which
has its principal place of business in the State of Delaware; (2)
at least one Regular
<PAGE>
32
Trustee is an employee or officer of, or is affiliated with, the
Sponsor; and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture
under the Trust Indenture Act, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements.
Section 6.2 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 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing
business under the laws of the United States
of America or any State or Territory thereof
or of the District of Columbia, or a Person
permitted by the Commission to act as an
institutional trustee under the Trust
Indenture Act, authorized under such laws to
exercise corporate trust power, 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 Person publishes
reports of condition at least annually,
pursuant to law or to the requirements of
the supervising or examining authority
referred to above, then for the purposes of
this Section 6.3(a)(ii), the combined
capital and surplus of such Person shall be
deemed to be its combined capital and
surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Property Trustee shall cease to
be eligible to so act under Section 6.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set
forth in Section 6.6(d).
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33
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of
the Common Securities (as if it were the Obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Guarantee and the Indenture shall be deemed to
be specifically described in this Declaration for purposes of
clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
Section 6.4 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 act through one or more Authorized
Officers.
Section 6.5 Initial Trustees and Initial Delaware
Trustee.
(a) The initial Regular Trustees shall be:
Mitchell T.G. Graye, David G. McLeod and James L.
McCallen, the business address of all of whom is c/o GWL&A
Financial Inc., 8515 East Orchard Road, Englewood, Colorado
80111.
(b) The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Section 6.6 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 6.6(b), Trustees may be removed
without cause:
(i) in the case of a Regular Trustee, at any
time by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities
voting as a class at a meeting of the
Holders of the Common Securities; and
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34
(ii) in the case of the Property Trustee or the
Delaware Trustee, or both of them:
(A) at a time when no Indenture Event of
Default shall have occurred and be
continuing, by vote of the Holders of a
Majority in Liquidation Amount of the
Common Securities voting as a class at
a meeting of the Holders of the Common
Securities; and
(B) at a time when an Indenture Event of
Default shall have occurred and be
continuing, by vote of the Holders of a
Majority in Liquidation Amount of the
Capital Securities.
(b) The Trustee that acts as Property Trustee shall
not be removed in accordance with Section 6.6(a) until a
successor Trustee possessing the qualifications to act as
Property Trustee under Section 6.3 (a "Successor Property
Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee
and delivered to the Regular Trustees and the Sponsor. The
Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 6.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 6.2 and 6.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) If any Trustee shall resign, be removed or become
incapable of acting as Trustee, or if a vacancy shall occur in
the office of any Trustee for any cause, a successor Trustee
shall be appointed:
(i) in the case of a Regular Trustee, at any
time by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities
voting as a class at a meeting of the
Holders of the Common Securities; and
(ii) in the case of the Property Trustee or the
Delaware Trustee, or both of them:
(A) at a time when no Indenture Event of
Default shall have occurred and be
continuing, by vote of the Holders of a
Majority in Liquidation Amount of the
Common Securities voting as a class at
a meeting of the Holders of the Common
Securities; and
(B) at a time when an Indenture Event of
Default shall have occurred and be
continuing, by vote of the Holders of a
Majority in Liquidation Amount of the
Capital Securities.
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35
(d) A Trustee appointed to office shall hold office
until his or its successor shall have been appointed, until his
death or its dissolution or until his or its removal or
resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(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.
(e) Subject to Section 6.6(c)(ii), the Holders of the
Common Securities shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in
accordance with this Section 6.6.
(f) If no Successor Property Trustee or Successor
Delaware Trustee, as the case may be, shall have been appointed
and accepted appointment as provided in this Section 6.6 within
60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the resigning or removed
Property Trustee or Delaware Trustee, as applicable, may petition
any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee, as
applicable. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may
be.
(g) 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 6.7 Vacancies among Trustees.
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36
If a Trustee ceases to hold office for any reason and
the number of Trustees is not reduced pursuant to Section 6.1, or
if the number of Trustees is increased pursuant to Section 6.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by the Regular Trustees or, if there are more than
two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.6.
Section 6.8 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. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by
the appointment of a Regular Trustee in accordance with Section
6.6, the Regular Trustees in office, regardless of their number,
shall have all the powers granted to the Regular Trustees and
shall discharge all the duties imposed upon the Regular Trustees
by this Declaration.
Section 6.9 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 shall be hand
delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting
for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and
all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
Section 6.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any natural person
over the age of 21 his or its power for the purpose of executing
any documents contemplated in Section 3.6, including any
registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
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37
(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 this Declaration,
as set forth herein.
Section 6.11 Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Property Trustee, the
Delaware Trustee or any Regular Trustee that is not a natural
person, as the case may be, may be merged or converted or with
which either may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of such Trustee,
shall be the successor of such Trustee hereunder, provided such
Person 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 7
TERMS OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust
issue one class of Capital Securities representing undivided
beneficial ownership interests in the assets of the Trust (the
"Capital Securities") and one class of Common Securities
representing undivided beneficial ownership interests in the
assets of the Trust and having the rights provided therefor in
this Declaration (the "Common Securities").
(i) Capital Securities. The Capital Securities
of the Trust shall have an aggregate
liquidation amount with respect to the
assets of the Trust of _____________________
($________) and a liquidation amount with
respect to the assets of the Trust of $25
per Capital Security. The Capital Security
Certificates evidencing the Capital
Securities shall be substantially in the
form of Exhibit A to this Declaration, with
such changes and additions thereto or
deletions therefrom as may be required by
ordinary usage, custom or practice or to
conform to the rules of any stock exchange
or inter-dealer quotation system on which
the Capital Securities are listed.
(ii) Common Securities. The Common Securities of
the Trust shall have an aggregate
liquidation amount with respect to the
assets of the Trust of _____________________
($_________) and a liquidation amount with
respect to the assets
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38
of the Trust of $25 per Common Security. The
Common Security Certificates evidencing the
Common Securities shall be substantially in
the form of Exhibit B to this Declaration,
with such changes and additions thereto or
deletions therefrom as may be required by
ordinary usage, custom or practice.
(b) Payment of Distributions on, and the Redemption
Price of, the Capital Securities and the Common Securities, as
applicable, shall be made Pro Rata based on the liquidation
amount of such Capital Securities and Common Securities;
provided, however, that if on any date on which such
Distributions or Redemption Price is payable, an Indenture Event
of Default shall have occurred and be continuing, no payment of
any Distribution on, or Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall
be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the Outstanding Capital Securities
for all Distribution periods terminating on or prior thereto, or
in the case of payment of the Redemption Price, the full amount
of such Redemption Price on all of the Outstanding Capital
Securities then called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee
shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Capital
Securities then due and payable. The Trust shall issue no
securities or other interests in the assets of the Trust other
than the Capital Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual or
facsimile signature of any present or any future Regular Trustee.
In case a Regular Trustee of the Trust who shall have signed any
of the Certificates shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of this Declaration any
such person was not such a Regular Trustee. 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.
A Capital Securities Certificate shall not be valid
until authenticated by the manual signature of an authorized
officer of the Property Trustee. Such signature shall be
conclusive evidence that the Capital Securities Certificate has
been authenticated under this Declaration.
Upon a written order of the Trust signed by one
Regular Trustee, the Property Trustee shall authenticate the
Capital Securities Certificate for original issue. The aggregate
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39
number of Capital Securities Outstanding at any time shall not
have an aggregate liquidation amount which exceeds the
liquidation amount set forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating
agent acceptable to the Trust to authenticate Capital Securities
Certificates. An authenticating agent may authenticate Capital
Securities Certificates whenever the Property Trustee may do so.
Each reference in this Declaration to authentication by the
Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee
to deal with the Sponsor or an Affiliate of the Sponsor.
(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) Except to the extent set forth in Section 9.1(b),
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 undivided beneficial interests in
the assets of the Trust.
(f) Every Person, by virtue of having become a Holder
or a Capital Security Beneficial Owner in accordance with the
terms of this Declaration, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this
Declaration and the terms of the Securities, the Guarantee, the
Indenture and the Debentures.
(g) The Securities shall have no preemptive or similar
rights.
Section 7.2 Distributions.
(a) Holders shall be entitled to receive cumulative
cash Distributions at the rate per annum of ___% of the stated
liquidation amount of $25 per Security. The amount of interest
payable for any full interest period shall be computed by
dividing the applicable rate per annum by four. The amount of
interest payable for any period less than a full interest period
shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual days elapsed in a partial month in such
period. Subject to Section 7.1(b), Distributions shall be made on
the Capital Securities and the Common Securities on a Pro Rata
basis. Distributions on the Securities shall, from the date of
original issue, accrue and be cumulative and shall be payable
quarterly only to the extent that the Trust has funds available
for the payment of such Distributions in the Property Account.
Distributions not paid on the scheduled payment date will
accumulate and compound quarterly at the rate of ___% per annum
("Compounded Distributions"). "Distributions" shall mean ordinary
cumulative Distributions, together with any Compounded
Distributions. If and to the extent that the Debenture Issuer
makes a payment of interest (including Defaulted Interest (as
defined in the Indenture)) and/or principal on the Debentures
held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to
make a Pro Rata Distribution of the Payment Amount to Holders,
subject to the terms of Section 7.1(b).
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40
(b) Distributions on the Securities will be
cumulative, will accrue from the date of original issuance and
will be payable quarterly in arrears on each March 31, June 30,
September 30 and December 31, commencing March 31, 1999, when, as
and if available for payment, by the Property Trustee, except as
otherwise described below. In the event that any date on which
Distributions are payable on the Securities is not a Business
Day, payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and
without any additional interest or other payment in respect of
any such delay), except that if such next succeeding Business Day
falls in the next calendar year, then 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 date such payment was
originally payable. If Distributions are not paid when scheduled,
the accrued Distributions shall be paid to the Holders as they
appear on the books and records of the Trust on the record date
as determined under Section 7.2(c).
(c) Except as provided in Section 7.2(d),
distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on
the relevant record dates, which shall be the _______ day of the
month (whether or not a Business Day) prior to the relevant
payment date.
(d) Distributions payable on any Securities that are
not punctually paid on any Distribution Date will cease to be
payable to the Persons in whose name such Securities are
registered on the relevant Record Date, and such defaulted
Distributions will instead be payable to the Person in whose name
such Securities are registered at the close of business on a
special record date or other specified date determined in
accordance with the Indenture.
Section 7.3 Redemption of Securities.
(a) Upon the repayment or redemption, in whole or in
part, of the Debentures, the proceeds from such repayment or
redemption shall be applied by the Property Trustee
simultaneously Pro Rata (subject to Section 7.1(b)) to redeem
Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or
redeemed for an amount equal to the redemption price paid by the
Debenture Issuer in respect of such Debentures plus an amount
equal to accrued and unpaid Distributions thereon up to but
excluding the date of the redemption or such lesser amount as
shall be received by the Trust in respect of the Debentures so
repaid or redeemed (the "Redemption Price").
(b) If fewer than all of the Debentures are to be
repaid or redeemed, then the proceeds from such repayment or
redemption shall be allocated to the redemption Pro Rata of the
Common Securities and the Capital Securities as described in
Section 7.4 below.
Section 7.4 Redemption Procedures.
(a) Notice of any redemption of the Securities (a
"Redemption Notice") will be given by the Trust by mail to each
Holder of such Securities to be redeemed at least 30 days but not
more than 60 days before the date fixed for redemption thereof,
which will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of redemption and the
dates on which notices are given pursuant to this Section 7.4, a
Redemption Notice shall be
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41
deemed to be given on the day such notice is first mailed by
registered or certified mail to Holders. Each Redemption Notice
shall be addressed to the Holders at the address of each such
Holder appearing in the books and records of the Trust. No defect
in the Redemption Notice or in the mailing thereof with respect
to any Holder shall affect the validity of the redemption
proceedings with respect to any other Holder. All Redemption
Notices shall:
(i) state the CUSIP number of the Capital
Securities;
(ii) state the date of redemption;
(iii) state that from and after the date of
redemption, the Securities will no longer be deemed to be
Outstanding and any Certificates not surrendered for
exchange will be deemed to represent a Debenture having a
principal amount equal to the liquidation amount of such
Securities; and
(iv) provide such information with respect to the
mechanics by which Holders may exchange Securities for
Debentures as the Regular Trustees and the Property Trustee
shall deem appropriate.
(b) If fewer than all the Outstanding Securities are
to be so redeemed, the Common Securities and the Capital
Securities will be redeemed Pro Rata and the Capital Securities
to be redeemed will be redeemed as described in Section 7.4(d)
below. The Trust may not redeem fewer than all of the Outstanding
Capital Securities unless all accrued and unpaid Distributions
have been paid in full on all Capital Securities for all
quarterly periods terminating on or prior to the date of
redemption. For all purposes of this Declaration, unless the
context otherwise requires, all provisions relating to the
redemption of Capital Securities shall relate, in the case of any
Capital Security redeemed or to be redeemed only in part, to the
portion of the aggregate liquidation amount of Capital Securities
which has been or is to be redeemed.
(c) If Securities are to be redeemed and the Trust
gives a Redemption Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section (which notice
will be irrevocable), then (A) while the Capital Securities are
in book-entry only form, by 12:00 noon, New York City time, on
the redemption date, the Property Trustee, to the extent funds
are available, will deposit irrevocably with DTC (in the case of
book-entry form Capital Securities) or its nominee (or successor
Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital
Securities, and (B) with respect to Capital Securities issued in
definitive form and Common Securities, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable written
instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Certificates.
Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Securities called for redemption
shall be payable to the Holders of such Securities on the
relevant record dates for the related Distribution Dates. If a
Redemption 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
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42
rights of Holders of such Securities will cease, except the right
of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such
Securities will cease to be Outstanding. In the event that 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 which 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 the date such payment was originally
payable. In the event that payment of the Redemption Price in
respect of any Securities called for redemption is improperly
withheld or refused and not paid either by the Property Trustee
or by the Sponsor as guarantor pursuant to the Guarantee,
Distributions on such Securities will continue to accrue at the
then applicable rate from the redemption date originally
established by the Trust for the Capital Securities to the date
such Redemption Price is actually paid, in which case the actual
payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price. For these purposes,
the applicable Redemption Price shall not include Distributions
which are being paid to Holders who were Holders on a relevant
record date. Upon satisfaction of the foregoing conditions, then
immediately prior to the close of business on the date of such
deposit or payment, all rights of Holders of such Securities so
called for redemption will cease, except the right of the Holders
to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for
redemption, such Securities will not accrue Distributions or bear
interest.
(d) If less than all of the Outstanding Securities are
to be redeemed on a redemption date, then the aggregate
liquidation amount of Securities to be redeemed shall be
allocated on a Pro Rata basis among the Common Securities and the
Capital Securities. If the Capital Securities are in book entry
form, they will be redeemed on a Pro Rata basis as described in
Section 7.4(c). The particular Capital Securities to be redeemed
shall be selected on a Pro Rata basis not more than 60 days prior
to the redemption date by the Property Trustee from the
Outstanding Capital Securities not previously called for
redemption, by such method (including, without limitation, by
lot) as the Property Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof)
of the liquidation amount of Capital Securities of a denomination
larger than $25. In any such proration, the Property Trustee may
make such adjustments as may be appropriate in order that only
Capital Securities in authorized denominations shall be redeemed.
The Property Trustee shall promptly notify the registrar in
writing of the Capital Securities selected for redemption and, in
the case of any Capital Security selected for partial redemption,
the liquidation amount thereof to be redeemed. For all purposes
of this Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall
relate, in the case of any Capital Securities redeemed or to be
redeemed only in part, to the portion of the aggregate
liquidation amount of Capital Securities which has been or is to
be redeemed.
(e) Subject to applicable law (including, without
limitation, United States federal securities laws), the Debenture
Issuer or its subsidiaries may at any time and from time to time
purchase Outstanding Capital Securities by tender, in the open
market or by private agreement.
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43
Section 7.5 Voting Rights of Capital Securities.
(a) Except as provided under this Declaration and as
otherwise required by the Business Trust Act, the Trust Indenture
Act and other applicable law, the Holders of the Capital
Securities will have no voting rights and no right to control the
administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Securities, be construed
so as to constitute the Holders from time to time as partners or
members of an association.
(b) Subject to the requirement of the Property Trustee
receiving a tax opinion in certain circumstances set forth in
Section 7.5(d) below, the Holders of a Majority in Liquidation
Amount of the Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or 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) exercise the
remedies available to it under the Indenture as a holder of the
Debentures or (ii) 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
the holders of more than a majority of the aggregate principal
amount of Debentures affected thereby, only the Holders of the
percentage of the aggregate stated liquidation amount of the
Capital Securities which is at least equal to the percentage
required under the Indenture may direct the Property Trustee to
give such consent to take such action. The Trustees shall not
revoke any action previously authorized or approved by a vote of
the Holders of Capital Securities, except by a subsequent vote of
the Holders of Capital Securities.
(c) If the Property Trustee fails to enforce its
rights with respect to the Debentures after a Holder of record of
Capital Securities has made a written request, such Holder of
Capital Securities may institute legal proceedings directly
against the Debenture Issuer to enforce the Property Trustee's
rights under the Indenture, without first instituting any legal
proceeding against the Property Trustee or any other Person. In
addition, if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest, principal or other required
payments on the Debentures on the date such interest, principal
or other payment is otherwise payable, then a Holder of Capital
Securities may, on or after the respective due dates specified in
the Debentures, directly institute a proceeding against the
Debenture Issuer for enforcement of payment on Debentures having
a principal amount equal to the aggregate liquidation amount of
Capital Securities held by such Holder (a "Direct Action"). In
connection with such Direct Action, the rights of the Debenture
Issuer will be subrogated to the rights of such Holder of Capital
Securities to the extent of any payment made by the Debenture
Issuer to such Holder of Capital Securities in such Direct
Action. Except as provided otherwise in this Section 7.5(c), the
Holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of Debentures.
(d) The Property Trustee shall notify all Holders of
the Capital Securities of any notice of any Indenture Event of
Default received from the Debenture Issuer with respect to the
Debentures. Such notice shall state that such Indenture Event of
Default also constitutes a Trust Enforcement Event. Except with
respect to directing the time, method, and place of conducting a
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44
proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clauses
7.5(b)(i) and (ii) above unless the Property Trustee has been
furnished an opinion of independent tax counsel to the effect
that taking such action will not cause the Trust to be classified
for United States federal income tax purposes as other than a
grantor trust.
(e) In the event the consent of the Property Trustee,
as the Holder of the Debentures, is required under the Indenture
with respect to any amendment or modification of the Indenture,
the Property Trustee shall request the direction of the Holders
with respect to such amendment or modification and shall vote
with respect to such amendment or modification as directed by a
Majority in Liquidation Amount of the Securities voting together
as a single class; provided, however, that where a consent under
the Indenture would require the consent of the holders of more
than a majority of the aggregate principal amount of the
Debentures, the Property Trustee may only give such consent at
the direction of the Holders of at least the same proportion in
aggregate stated liquidation amount of the Securities. The
Property Trustee shall not take any such action in accordance
with the directions of the Holders unless the Property Trustee
has obtained an opinion of tax counsel to the effect that, as a
result of such action, the Trust will not be classified as other
than a grantor trust for United States federal income tax
purposes.
(f) A waiver of an Indenture Event of Default with
respect to the Debentures will constitute a waiver of the
corresponding Trust Enforcement Event.
(g) Any required approval or direction of Holders of
Capital Securities may be given at a separate meeting of Holders
of Capital Securities convened for such purpose, at a meeting of
all of the Holders or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Capital Securities. Each
such notice will include a statement setting forth the following
information: (i) the date of such meeting or the date by which
such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is
sought; and (iii) instructions for the delivery of proxies or
consents.
(h) No vote or consent of the Holders of Capital
Securities will be required for the Trust to redeem and cancel
Capital Securities or distribute Debentures in accordance with
this Declaration.
(i) Notwithstanding that Holders of Capital Securities
are entitled to vote or consent under any of the circumstances
described above, any of the Capital Securities that are owned at
such time by the Debenture Issuer, the Trustees or any Person
directly or indirectly controlled by, or under direct or indirect
common control with, the Debenture Issuer or any Trustees, shall
not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if such Securities were not
Outstanding, provided, however, that Persons otherwise eligible
to vote to whom the Debenture Issuer or any of its subsidiaries
have pledged Capital Securities may vote or consent with respect
to such pledged Capital Securities under any of the circumstances
described herein.
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45
(j) Except as set forth in Section 6.6(a)(ii)(B),
Holders of the Capital Securities will have no rights to appoint
or remove the Trustees, who may be appointed, removed or replaced
solely by the Sponsor, as the Holder of all of the Common
Securities.
Section 7.6 Voting Rights of Common Securities.
(a) Except as provided under this Section 7.6 or as
otherwise required by the Business Trust Act, the Trust Indenture
Act or other applicable law or provided by 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 this 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 this Declaration and
only after all Trust Enforcement Events with respect to the
Capital Securities have been cured, waived, or otherwise
eliminated and subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in
this paragraph (c), the Holders of a Majority in Liquidation
Amount of the Common Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise
of any trust or power conferred upon the Property Trustee under
this Declaration, including the right to direct the Property
Trustee, as holder of the Debentures, to (i) exercise the
remedies available to it under the Indenture as a holder of the
Debentures, or (ii) consent to any amendment or modification of
the Indenture or the Debentures where such consent shall be
required; provided, however, that where a consent or action under
the Indenture would require the consent or act of the holders of
more than a majority of the aggregate principal amount of
Debentures affected thereby, only the Holders of the percentage
of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required
under the Indenture may direct the Property Trustee to have such
consent or take such action. Except with respect to directing the
time, method, and place of conducting a proceeding for a remedy,
the Property Trustee shall be under no obligation to take any of
the actions described in clause 7.6(c)(i) and (ii) above unless
the Property Trustee has been furnished an opinion of independent
tax counsel to the effect that, as a result of such action, for
United States federal income tax purposes the Trust will not fail
to be classified as a grantor trust and that the Debentures will
not fail to be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes.
(d) If the Property Trustee fails to enforce its
rights with respect to the Debentures after a Holder of record of
Common Securities has made a written request, such Holder of
record of Common Securities may, to the fullest extent permitted
by applicable law, institute legal proceedings directly against
the Debenture Issuer to enforce the Property Trustee's rights
under the Debentures without first instituting any legal
proceeding against the Property Trustee or any other Person.
(e) A waiver of an Indenture Event of Default with
respect to the Debentures will constitute a waiver of the
corresponding Trust Enforcement Event.
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46
(f) Any required approval or direction of Holders of
Common Securities may be given at a separate meeting of Holders
of Common Securities convened for such purpose, at a meeting of
all of the Holders or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Common Securities are entitled to vote, or of any matter on which
action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth the following
information: (i) the date of such meeting or the date by which
such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is
sought; and (iii) instructions for the delivery of proxies or
consents.
(g) No vote or consent of the Holders of the Common
Securities will be required for the Trust to redeem and cancel
Common Securities or to distribute Debentures in accordance with
the Declaration and the terms of the Securities.
Section 7.7 Paying Agent.
In the event that the Capital Securities are not in
book-entry only form, the Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or
agency where the Capital Securities may be presented for payment
("Paying Agent"). The Paying Agent shall initially be the
Property Trustee and any co-paying agent chosen by the Property
Trustee and acceptable to the Regular Trustees and the Sponsor.
The term "Paying Agent" includes any additional paying agent. The
Trust may change any Paying Agent without prior notice to the
Holders. The Trust shall notify the Property Trustee of the name
and address of any Paying Agent not a party to this Declaration.
If the Trust fails to appoint or maintain another entity as
Paying Agent, the Property Trustee shall act as such. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Property Trustee and the Sponsor. In the
event that the Property Trustee shall no longer be the Paying
Agent, the Regular Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Regular
Trustees and the Sponsor) to act as Paying Agent. The Trust or
any of its Affiliates may act as Paying Agent.
Section 7.8 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. To the
fullest extent permitted by law, 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 7, Capital Securities
shall be freely transferable. The Common Securities are not
transferable, except as provided in Section 5.2 hereof.
(c) The Trust shall not be required (i) to register or
cause to be registered the transfer or exchange of Capital
Securities during a period beginning at the opening of business
15 days before the day of the mailing of the relevant notice of
redemption and ending at the close of business on the day of
mailing of such notice of redemption or (ii) to register or cause
to be
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registered the transfer or exchange of any Capital Securities so
selected for redemption, except in the case of any Capital
Securities being redeemed in part, any portion thereof not to be
redeemed.
Section 7.9 Transfer and Exchange of Certificates.
The Property Trustee shall provide for the
registration of Certificates and of transfers or exchanges of
Certificates, which will be effected without charge by and on
behalf of the Trust, but only upon payment (with such indemnity
as the Property Trustee may require) in respect of any tax or
other government charges that may be imposed in connection with
any transfer or exchange. Upon surrender for registration of
transfer of any Certificate, the Property Trustee shall cause one
or more new Certificates to be issued in the name of the
designated transferee or transferees. Upon surrender for exchange
of any Certificate, the Property Trustee shall cause one or more
new Certificates in the same aggregate liquidation amount as the
Certificate surrendered for exchange to be issued in the name of
the Holder of the Certificate so surrendered. Every Certificate
surrendered for registration of transfer or for exchange shall be
accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee duly executed by the Holder
or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or for
exchange shall be canceled by the Property Trustee. 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 7.10 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of
receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any
Person, whether or not the Trust shall have actual or other
notice thereof.
Section 7.11 Book Entry Interests.
The Capital Securities, on original issuance, will be
issued in the form of one or more fully registered, global
Capital Security Certificates (each, a "Global Certificate"), to
be delivered to DTC, the initial Clearing Agency or its custodian
by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in
the name of Cede & Co., the nominee of DTC, and no Capital
Security Beneficial Owner will receive a definitive Capital
Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificates, except
as provided in Section 7.14. Unless and until definitive, fully
registered Capital Security Certificates (the "Definitive Capital
Security Certificates") have been issued to the Capital Security
Beneficial Owners pursuant to Section 7.14:
(a) the provisions of this Section 7.11 shall be in
full force and effect;
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(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 sole Holder of the Capital Securities and the
sole holder of the Global Certificates and shall have no
obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section
7.11 conflict with any other provisions of this Declaration, the
provisions of this Section 7.11 shall control; and
(d) the rights of the Capital Security Beneficial
Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements
between such Capital Security Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants.
Section 7.12 Notices to Clearing Agency.
Whenever a notice or other communication to the
Capital Security Holders is required under this Declaration,
unless and until Definitive Capital Security Certificates shall
have been issued to the Capital Security Beneficial Owners
pursuant to Section 7.14, the Trustees shall give all such
notices and communications specified herein to be given to the
Capital Security Holders to the Clearing Agency, and shall have
no notice obligations to the Capital Security Beneficial Owners.
Section 7.13 Appointment of Successor Clearing
Agency.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such Capital
Securities.
Section 7.14 Definitive Capital Security
Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section
7.13; or
(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the
Clearing Agency with respect to the Capital Securities,
then:
Definitive Capital Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with
respect to such Capital Securities; and upon surrender of the
Global Certificates by the Clearing Agency, accompanied by
registration instructions, the Regular Trustees shall cause
Definitive Capital Security Certificates to be delivered to the
Capital
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49
Security Beneficial Owners in accordance with the instructions of
the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of
them may conclusively rely on, and shall be protected in relying
on, said instructions of the Clearing Agency. The Definitive
Capital Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other
marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Capital Securities may be listed,
or to conform to usage.
Section 7.15 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered
to the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft
of any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep
each of them, the Sponsor, each of the Trustees and the Trust
harmless,
then:
in the absence of notice that such Certificate shall
have been acquired by a bona fide purchaser, any Regular Trustee
on behalf of the Trust shall execute and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In
connection with the issuance of any new Certificate under this
Section 7.15, 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.
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ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
(a) The Trust shall automatically dissolve and its
affairs shall be wound up upon the earliest of:
(i) the occurrence of a Bankruptcy Event in
respect of, or the dissolution or liquidation of, the
Holder of the Common Securities;
(ii) the written direction to the Property
Trustee from the Holder of the Common Securities at
any time to terminate the Trust (which direction is
optional and wholly within the discretion of the
holder of the Common Securities), including following
the occurrence and continuation of a Special Event,
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Securities and
this Declaration, and all of the Debentures shall have
been distributed to the Holders of Securities in
exchange for all of the Securities;
(iii) the redemption of all of the Capital
Securities in connection with the maturity or
redemption of all of the Debentures; and
(iv) the entry by a court of competent
jurisdiction of an order for dissolution of the Trust.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a) and upon completion of the
winding up of the Trust, the Regular Trustees shall terminate the
Trust by filing a certificate of cancellation with the Secretary
of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article 9 shall
survive the termination of the Trust.
Section 8.2 Liquidation Distribution Upon Dissolution
of the Trust.
(a) If an event specified in clause (i), (ii) or (iv)
of Section 8.1 occurs, the Trust shall be liquidated by the
Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction or the making of
reasonable provisions for the payment of liabilities to creditors
of the Trust as provided by applicable law, to the Holders of the
Capital Securities and Common Securities their Pro Rata interest
in the Debentures. Notice of liquidation shall be given by the
Property Trustee by registered or certified mail, mailed not
later than 30 nor more than 60 days prior to the date of such
liquidation to each Holder at such Holder's address appearing in
the books and records of the Trust. For purposes of the
calculation of the date of liquidation and the dates on which
notices are given pursuant to this Section 8.2, a notice of
liquidation shall be deemed to be given on the day such notice is
first mailed by
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registered or certified mail to Holders. No defect in the notice
of liquidation or in the mailing thereof with respect to any
Holder shall affect the validity of the proceedings with respect
to any other Holder. All notices of liquidation shall:
(i) state the CUSIP Number of the Capital
Securities;
(ii) state the date of liquidation;
(iii) state that from and after the date of
liquidation, the Securities will no longer
be deemed to be Outstanding and any
Certificates not surrendered for exchange
will be deemed to represent a Debenture
having a principal amount equal to the
liquidation amount of such Securities; and
(iv) provide such information with respect to the
mechanics by which Holders may exchange
Certificates for Debentures, or if Section
8.2(d) applies, receive a Liquidation
Distribution, as the Regular Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 8.1(a)(iii) or 8.2(d)
applies, in order to effect the liquidation of the Trust and
distribution of the Debentures to Holders, the Property Trustee
shall establish a record date for such distribution (which shall
be not more than 45 days prior to the date of liquidation) and,
either itself acting as exchange agent or through the appointment
of a separate exchange agent, shall establish such procedures as
it shall deem appropriate to effect the distribution of
Debentures in exchange for the Outstanding Certificates.
(c) Except where Section 8.1(a)(iii) or 8.2(d)
applies, after the date of liquidation is fixed, (i) the
Securities will no longer be deemed to be Outstanding, (ii) upon
surrender of Certificates to the Regular Trustees or their agent
for exchange, certificates representing Debentures having a
principal amount equal to the liquidation amount of such
Securities will be issued to Holders of such Certificates, (iii)
the Sponsor shall use its best efforts to have the Debentures
listed on the New York Stock Exchange or on such other exchange
or inter-dealer quotation system as the Capital Securities are
then listed or quoted, (iv) any Certificates not so surrendered
for exchange will be deemed to represent Debentures having a
principal amount equal to the liquidation amount of the
Securities represented by such Certificates, and bearing accrued
and unpaid interest at the rate provided for in the Debentures
from the last Distribution Date on which a Distribution was made
on such Certificates until such certificates are so surrendered
(and until such certificates are so surrendered, no payments of
interest or principal will be made to Holders of Certificates
with respect to such Debentures) and (v) all rights of Holders
holding Securities will cease, except the right of such Holders
to receive Debentures upon surrender of Certificates. The
Property Trustee shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange
for the Securities.
(d) In the event that, notwithstanding the other
provisions of this Section 8.2, whether because of an order for
dissolution entered by a court of competent jurisdiction or
otherwise, distribution of the Debentures in the manner provided
herein is determined by the
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52
Property Trustee not to be practical, the assets of the Trust
shall be liquidated, and the Trust shall be wound-up or
terminated, by the Property Trustee. In such event, Holders will
be entitled to receive out of the assets of the Trust available
for distribution to Holders, after satisfaction of or the making
of reasonable provisions for the payment of liabilities to
creditors of the Trust as provided by applicable law, an amount
equal to the aggregate liquidation amount per Security plus
accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If,
upon any such winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Securities
shall be paid on a Pro Rata basis. The Holders of the Common
Securities will be entitled to receive distributions upon any
such Liquidation Pro Rata with the Holders of the Capital
Securities, except that if an Indenture Event of Default has
occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities with regard to such
distributions.
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS, TRUSTEES OR OTHER PERSONS
Section 9.1 Liability.
(a) Except as expressly set forth in this Declaration,
the 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, which shall
be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any
Holder any deficit upon dissolution of the
Trust or otherwise.
(b) The Holder of the Common Securities shall be
liable for all of the debts and obligations of the Trust (other
than with respect to the Securities and liabilities related to
taxes) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders of the Capital Securities shall be entitled to
the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware.
Section 9.2 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
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53
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; provided that
with respect to the Property Trustee, such Trustee shall be
liable for any such loss, damage or claim incurred by reason of
such Trustee's negligent action or negligent failure to act with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the
Trust by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses or any other facts pertinent
to the existence and amount of assets from which Distributions to
Holders might properly be paid.
Section 9.3 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 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,
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
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54
constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person
shall be entitled to consider such interests
and factors as it desires, including its own
interests, and shall have no duty or
obligation to give any consideration to any
interest of or factors affecting the Trust
or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act
under such express standard and shall not be
subject to any other or different standard
imposed by this Declaration or by applicable
law.
Section 9.4 Indemnification.
(a)(i) Pursuant to Section 1009 of the Indenture, the
Debenture Issuer shall indemnify, to the full extent permitted by
law, any Debenture Issuer Indemnified Person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is
or was a Debenture Issuer Indemnified Person against expenses
(including reasonable attorneys' fees and expenses), judgments,
fines and amounts paid in settlement with the Debenture Issuer's
prior written consent 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 Debenture Issuer
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 Debenture Issuer Indemnified
Person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Debenture Issuer
Indemnified Person against expenses (including reasonable
attorneys' fees and expenses) actually and reasonably incurred by
him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Debenture
Issuer Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of
Chancery of
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55
Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) Any indemnification under paragraphs (i) and
(ii) of this Section 9.4(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 Debenture
Issuer Indemnified Person is proper in the circumstances because
he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of
such Regular Trustees who were not parties to such action, suit
or proceeding, (2) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or
(3) by the Holders of the Common Securities.
(iv) Expenses (including attorneys' fees) incurred by
a Debenture Issuer Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section
9.4(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 Debenture Issuer
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 9.4(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly
made (1) by the Regular Trustees by a majority vote of a quorum
of disinterested Regular Trustees, (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) the Holders of the Common Securities,
that, based upon the facts known to the Regular Trustees, counsel
or the Holders of the Common Securities at the time such
determination is made, such Debenture Issuer 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
Debenture Issuer Indemnified Person believed or had reasonable
cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees,
independent legal counsel or Holders of the Common Securities
reasonably determine that such Person deliberately breached his
duty to the Trust or the Holders.
(v) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 9.4(a) shall not be deemed exclusive of any
other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote
of stockholders or disinterested directors of the Debenture
Issuer or Holders of the Capital Securities or otherwise, both as
to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification
under this Section 9.4(a) shall be deemed to be provided by a contract
between the Debenture Issuer and each Debenture Issuer
Indemnified Person who serves in such capacity at any time while
this Section 9.4(a) is in effect. Any repeal or modification of this
Section 9.4(a) shall not affect any rights or obligations then existing.
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56
(vi) The Debenture Issuer or the Trust may
purchase and maintain insurance on behalf of any Person who is or
was a Debenture Issuer Indemnified Person against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture
Issuer would have the power to indemnify him against such
liability under the provisions of this Section 9.4(a).
(vii) For purposes of this Section 9.4(a), references
to "the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section 9.4(a)
with respect to the resulting or surviving entity as he would
have with respect to such constituent entity if its separate
existence had continued.
(viii) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section 9.4(a) shall,
unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a Debenture Issuer
Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person. The obligation to
indemnify as set forth in this Section 9.4(a) shall survive the
satisfaction and discharge of this Declaration.
(b) Pursuant to Section 1009 of the Indenture, the
Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any predecessor Property Trustee
or Delaware Trustee, (iv) an Affiliate of the Property Trustee,
the Delaware Trustee or any predecessor Property Trustee or
Delaware Trustee, and (v) any officers, directors, shareholders,
members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee, the Delaware Trustee
or any predecessor Property Trustee or Delaware Trustee (each of
the Persons in (i) through (v) being referred to as a "Fiduciary
Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence or bad faith or
willful misconduct on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 9.4(b) shall
survive the satisfaction and discharge of this Declaration and
the resignation or removal of the Property Trustee or the
Delaware Trustee, as the case may be.
Section 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee (subject to Section 6.3(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 activities of the Trust, and the Trust and the
Holders shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such
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57
venture, even if competitive with the activities of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be
obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the
Trust, and 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 10
ACCOUNTING
Section 10.1 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 10.2 Certain Accounting and Tax Matters.
(a) At all times during the existence of the Trust,
the Regular Trustees shall keep, or cause to be kept, full books
of accounts, records and supporting documents which shall reflect
in reasonable detail each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting,
in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the
Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified
public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be duly
prepared and delivered to each of the Holders, an annual United
States federal income tax information statement, required by the
Code, containing such information with regard to the Securities
held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 60 days after the
end of each Fiscal Year of the Trust.
(c) 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.
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Section 10.3 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 Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided,
however, that the Property Trustee shall designate the
signatories for the Property Account.
Section 10.4 Withholding.
The Trust and the Regular Trustees shall comply with
all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary
to establish an exemption from withholding and backup 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 and
backup withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an
exemption from withholding and backup withholding is properly
established by a Holder, shall remit amounts withheld with
respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts
to any authority with respect to distributions or allocations to
any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In
the event of any claim of 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.
Section 10.5 Payment of Taxes and Duties of the
Trust.
Upon receipt under the Indenture of any amounts
payable by the Debenture Issuer pursuant to Section 1009 of the
Indenture, the Property Trustee shall promptly pay any additional
taxes, duties, etc. (other than withholding taxes) imposed on the
Trust arising from the receipt of such amounts by the United
States or any other taxing authority.
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
(a) This Declaration may only be amended by a written
instrument approved and executed by the Regular Trustees (or, if
there are more than two Regular Trustees, a majority of the
Regular Trustees) and the Holders of the Common Securities and,
except as otherwise provided in this Declaration:
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59
(i) by the Property Trustee if the amendment
affects the rights, powers, duties,
obligations or immunities of the Property
Trustee; and
(ii) by the Delaware Trustee if the amendment
affects the rights, powers, duties,
obligations or immunities of 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 and the
Delaware Trustee shall have first received
an Officers' Certificate from each of the
Trust and the Holders of Common Securities
that such amendment is permitted by, and
conforms to, the terms of this Declaration;
(ii) unless, in the case of any proposed
amendment which affects the rights, powers,
duties, obligations or immunities of the
Property Trustee or the Delaware Trustee,
the Property Trustee and the Delaware
Trustee shall have first received:
(A) an Officers' Certificate from each of
the Trust and the Holders of Common
Securities 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 Holders of Common
Securities 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 be classified other
than as a grantor trust for United
States federal income tax purposes or
cause the Debentures to be treated as
other than indebtedness of the
Debenture Issuer for United States
federal income tax purposes;
(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.
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60
(c) Except as provided in Section 11.1(d) hereof, any
provision of this Declaration may be amended by a majority of the
Regular Trustees and the Holders of Common Securities with (i)
the consent of the Holders representing not less than a Majority
in Liquidation Amount of the Securities Outstanding and (ii)
receipt by the Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal
income tax purposes or the treatment of the Debentures as
indebtedness of the Debenture Issuer for United States federal
income tax purposes or the Trust's exemption from status of an
Investment Company.
(d) In addition to and not withstanding any other
provision in this Declaration, without the consent of each Holder
affected thereby, this Declaration may not be amended to (i)
change the amount or timing of any Distribution on the Securities
or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Securities as of a
specified date or (ii) restrict the right of a Holder to
institute suit for the enforcement of any such payment on or
after such date.
(e) This Section 11.1 shall not be amended without the
consent of all of the Holders.
(f) Article 4 shall not be amended without the consent
of the Holders of a Majority in Liquidation Amount of the Common
Securities.
(g) The rights of the Holders of the Common Securities
under this Declaration 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.
(h) Notwithstanding Sections 11.1(c) and 11.1(d), this
Declaration may be amended with the consent of the Holders of the
Common Securities but without the consent of the Holders of the
Capital Securities to:
(i) cure any ambiguity; correct or supplement
any provision in this Declaration that may
be defective or inconsistent with any other
provision of this Declaration, or to make
any other provisions with respect to matters
or questions arising under this Declaration
that shall not be inconsistent with the
other provisions of this Declaration;
(ii) add to the covenants, restrictions or
obligations of the Sponsor; or
(iii) modify, eliminate or add to any provision of
this Declaration to such extent as shall be
necessary to ensure that the Trust will be
classified as a grantor trust for United
States federal income tax purposes at all
times that any Securities are Outstanding or
to ensure that the Debentures are treated as
indebtedness of the
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61
Debenture Issuer for United States federal
income tax purposes or to ensure that the
Trust will not be required to register as an
Investment Company, provided that in each
such case such action shall not adversely
affect in any material respect the interests
of any Holder;
provided, however, that any amendments of this Declaration shall
become effective when notice thereof is given to the Holders.
(i) The issuance of a Trustees' Authorization
Certificate by the Regular Trustees for purposes of establishing
the terms and form of the Securities as contemplated by Section
7.1 shall not be deemed an amendment of this Declaration subject
to the provisions of this Section 11.1.
Section 11.2 Meetings of the Holders; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the 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 or the rules of any stock
exchange on which the Capital Securities are listed or admitted
for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at
least 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
wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders
calling a meeting shall specify in writing the Certificates held
by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) The following provisions shall apply to meetings
of Holders:
(i) notice of any such meeting shall be given to
all the Holders having a right to vote
thereat at least seven days and not more
than 60 days before the date of such
meeting. Whenever a vote, consent or
approval of the Holders is permitted or
required under this Declaration or the rules
of any stock exchange on which the Capital
Securities are listed or admitted for
trading, such vote, consent or approval may
be given at a meeting of the Holders. Any
action that may be taken at a meeting of the
Holders may be taken without a meeting if a
consent in writing setting forth the action
so taken is signed by the Holders owning not
less than the minimum amount of Securities
in liquidation amount that would be
necessary to authorize or take such action
at a meeting at which all Holders having a
right to vote thereon were present and
voting. Prompt notice of the taking of
action without a meeting shall be given to
the Holders entitled to vote who have not
consented in writing.
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62
The Regular Trustees may specify that any
written ballot submitted to the Holders for
the purpose of taking any action without a
meeting shall be returned to the Trust
within the time specified by the Regular
Trustees;
(ii) each Holder may authorize any Person to act
for it by proxy on all matters in which a
Holder is entitled to participate, including
waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall
be valid after the expiration of 11 months
from the date thereof unless otherwise
provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder
executing such proxy. Except as otherwise
provided herein, all matters relating to the
giving, voting or validity of proxies shall
be governed by the General Corporation Law
of the State of Delaware relating to
proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware
corporation and the Holders were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders 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 Trust Indenture Act or the
listing rules of any stock exchange on which
the Capital Securities are then listed for
trading, otherwise provides, the Regular
Trustees, in their sole discretion, shall
establish all other provisions relating to
meetings of Holders, including notice of the
time, place or purpose of any meeting at
which any matter is to be voted on by any
Holders, waiver of any such notice, action
by consent without a meeting, the
establishment of a record date, quorum
requirements, voting in person or by proxy
or any other matter with respect to the
exercise of any such right to vote.
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1 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:
<PAGE>
63
(a) the Property Trustee is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, with
trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this
Declaration;
(b) the Property Trustee satisfies the requirements
set forth in Section 6.3(a);
(c) the execution, delivery and performance by the
Property Trustee of this Declaration has been duly authorized by
all necessary corporate action on the part of the Property
Trustee. This Declaration has been duly executed and delivered by
the Property Trustee, and 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);
(d) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the articles of association or
incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking
authority governing the trust powers of the Property Trustee is
required for the execution, delivery or performance by the
Property Trustee of this Declaration.
Section 12.2 Representations and Warranties of the
Delaware Trustee.
The Trustee that acts as initial Delaware Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Declaration, and each Successor Delaware Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Delaware Trustee's acceptance of its appointment
as Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements
set forth in Section and has the power and authority to execute
and deliver, and to carry out and perform its obligations under
the terms of, this Declaration and, if it is not a natural
person, is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and this
Declaration. This Declaration under Delaware law constitutes a
legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law); and
<PAGE>
64
(c) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking
authority governing the trust powers of the Delaware Trustee is
required for the execution, delivery or performance by the
Delaware Trustee of this Declaration.
ARTICLE 13
MISCELLANEOUS
Section 13.1 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 Property
Trustee, the Delaware Trustee and the Holders of the Securities):
GWL&A Financial Inc.
8515 East Orchard Road
Englewood, Colorado 80111
Attn: Secretary
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as the Delaware
Trustee may give notice of to the Regular Trustees, the Property
Trustee and the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
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 Regular Trustees, the Delaware Trustee and
the Holders of the Securities).
(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 Property Trustee, the Delaware Trustee and the
Trust):
GWL&A Financial Inc.
8515 East Orchard Road
Englewood, Colorado 80111
Attn: Secretary
<PAGE>
65
(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
registered or certified mail 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. No notice to or demand
on any party hereto in any case shall, unless otherwise required
under this Declaration, entitle such party to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any party hereto to any
other or further action in any circumstances without notice or
demand. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed by
facsimile or telecommunication transmission, when received unless
received outside of business hours, in which case on the next
open of business on a Business Day.
Section 13.2 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 (without regard to principles
of conflict of law).
Section 13.3 Intention of the Parties.
The parties hereto and, by its acceptance or
acquisition of a Security or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in,
such Security intend and agree that the Trust be classified for
United States federal, state and local tax purposes as a grantor
trust, and that the Securities be treated as undivided beneficial
ownership interests in the Trust property for United States
federal, state and local tax purposes. The provisions of this
Declaration shall be interpreted in a manner consistent with this
classification and treatment.
Section 13.4 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 13.5 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.
<PAGE>
66
Section 13.6 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 13.7 Counterparts.
This Declaration may contain more than one counterpart
of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to 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.
<PAGE>
67
IN WITNESS WHEREOF, the undersigned have caused these
presents to be executed as of the day and year first above
written.
GWL&A FINANCIAL INC.,
as Sponsor and Debenture Issuer
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:______________________________
Name:
Title:
<PAGE>
68
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:______________________________
Name:
Title:
_________________________________
Mitchell T.G.Graye,
as Regular Trustee
_________________________________
David G. McLeod,
as Regular Trustee
_________________________________
James L. McCallen,
as Regular Trustee
<PAGE>
EXHIBIT A
This Capital Security is a Global Certificate within
the meaning of the Declaration hereinafter referred to and is
registered in the name of The Depository Trust Company, a New
York corporation (the "Depository"), or a nominee of the
Depository. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the
Depository or its nominee only in the limited circumstances
described in the Declaration, and no transfer of this Capital
Security (other than a transfer of this Capital Security as a
whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of
the Depository) may be registered except in limited
circumstances.
Unless this Capital Security Certificate is presented
by an authorized representative of the Depository to Great-West
Life & Annuity Insurance Capital I or its agent for registration
of transfer, exchange or payment, and any Capital Security
Certificate issued is registered in the name of Cede & Co. or
such other name as registered by an authorized representative of
the Depository (and any payment hereon is made to Cede & Co. or
to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest
herein.
Certificate No. 1 Number of Capital Securities: [ ]
CUSIP No.
Certificate Evidencing Capital Securities
of
Great-West Life & Annuity Insurance Capital I
% Capital Securities
(liquidation amount $25 per Capital Security)
Great-West Life & Annuity Insurance Capital I, a
statutory business trust created under the laws of the State of
Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of capital securities of the
Trust, representing undivided beneficial ownership interests in
the assets of the Trust and designated the % Capital Securities
(liquidation amount $25 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in the Declaration (as
defined below). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the
Capital Securities represented hereby are 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 , 1998 (as the
same may be amended from time to time, the "Declaration"), among
GWL&A Financial Inc., as Sponsor, Mitchell T.G. Graye, David G.
McLeod and James L. McCallen, as Regular Trustees, The Bank of
New York, as Property Trustee, The Bank of New York (Delaware),
as Delaware Trustee, and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust.
Capitalized terms
<PAGE>
used herein but not defined shall have the meaning given them in
the Declaration. The Holder is entitled to the benefits of the
Guarantee to the extent described therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the
Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the
Debentures as indebtedness of the Sponsor for all United States
tax purposes, and the Capital Securities as evidence of an
undivided beneficial ownership interest in the Debentures.
IN WITNESS WHEREOF, the Trust has duly executed this
certificate.
Dated:
Great-West Life & Annuity Insurance
Capital I
By:_________________________________
Name:
Title: Regular Trustee
This is one of the Securities referred to in the
within mentioned Declaration.
The Bank of New York, as
Property Trustee
By: __________________________
Authorized Signatory
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS SET FORTH IN
SECTIONS 5.2 AND 7.8(b) OF THE AMENDED AND RESTATED DECLARATION
OF TRUST OF GREAT-WEST LIFE & ANNUITY INSURANCE CAPITAL I, DATED
AS OF , 1998, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
Certificate No. 1 Number of Common Securities: [ ]
Certificate Evidencing Common Securities
of
Great-West Life & Annuity Insurance Capital I
Common Securities
(liquidation amount $25 per Common Security)
Great-West Life & Annuity Insurance Capital I, a
statutory business trust created under the laws of the State of
Delaware (the "Trust"), hereby certifies that GWL&A Financial
Inc. (the "Holder") is the registered owner of common securities
of the Trust, representing an undivided beneficial ownership
interest in the assets of the Trust and designated the % Common
Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). The Common Securities are not transferable
and any attempted transfer thereof shall be void. The
designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of , 1998 (as the same may be amended from
time to time, the "Declaration"), among GWL&A Financial Inc., as
Sponsor, Mitchell T.G. Graye, David G. McLeod and James L.
McCallen, as Regular Trustees, The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee,
and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust. The Holder is entitled to
the benefits of the Guarantee to the extent described therein.
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, the Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.
<PAGE>
2
By acceptance, the Holder agrees to treat the
Debentures as indebtedness of the Sponsor for all United States
tax purposes, and the Common Securities as evidence of an
undivided beneficial ownership interest in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this th day of , 1998.
Great-West Life & Annuity Insurance
Capital I
By:_________________________________
Name:
Title: Regular Trustee
DRAFT 11/12/98
- -----------------------------------------------------------------
GWL&A FINANCIAL INC.
TO
THE BANK OF NEW YORK, Trustee
INDENTURE
Dated as of , 1998
% Junior Subordinated Debentures due 2028
- -----------------------------------------------------------------
<PAGE>
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- ----------- -------
Section 310(a)(1) ................................609
(a)(2) .....................................609
(a)(3) .....................................Not Applicable
(a)(4) .....................................Not Applicable
(b) ........................................608, 610
Section 311(a) ...................................613
(b) ........................................613
Section 312(a) ...................................701
(b) ........................................702(b)
(c) ........................................702(c)
Section 313(a) ...................................703(a)
(a)(4) .....................................101, 1004
(b) ........................................703(a)
(c) ........................................703(a)
(d) ........................................703(b)
Section 314(a) ...................................704
(b) ........................................Not Applicable
(c)(1) .....................................102
(c)(2) .....................................102
(c)(3) .....................................Not Applicable
(d) ........................................Not Applicable
(e) ........................................102
Section 315(a) ...................................601
(b) ........................................602
(c) ........................................601
(d) ........................................601
(e) ........................................514
Section 316(a) ...................................101
(a)(1)(A) ..................................502
(a)(1)(B) ..................................513
(a)(2) .....................................Not Applicable
(b) ........................................508
(c) ........................................104(c)
Section 317(a)(1) ................................503
(a)(2) .....................................504
(b) ........................................1003
Section 318(a) ...................................107
<PAGE>
TABLE OF CONTENTS
Pages
-----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION .......1
SECTION 101. Definitions ......................................1
Act ...........................................................2
Board of Directors ............................................2
Board Resolution ..............................................2
Business Day ..................................................2
Capital Lease Obligation ......................................2
Capital Securities ............................................3
Capital Stock .................................................3
Change in Investment Company Act Law ..........................3
Closing Date ..................................................3
Commission ....................................................3
Common Securities .............................................3
Company .......................................................3
Company Request ...............................................3
Company Order .................................................3
Corporate Trust Office ........................................3
Covenant Defeasance ...........................................3
Creditor ......................................................3
Declaration ...................................................3
Defaulted Interest ............................................4
Depositary ....................................................4
Event of Default ..............................................4
Exchange Act ..................................................4
Extension Period ..............................................4
GAAP ..........................................................4
Guarantee .....................................................4
Global Security ...............................................4
Holder ........................................................4
Indenture .....................................................4
Interest Payment Date .........................................4
Investment Company Event ......................................4
Legal Defeasance ..............................................5
Maturity ......................................................5
Officers' Certificate .........................................5
OID ...........................................................5
Opinion of Counsel ............................................5
Outstanding ...................................................5
Paying Agent ..................................................6
Person ........................................................6
Predecessor Security ..........................................6
i
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Property Trustee ..............................................6
Redemption Date ...............................................6
Redemption Price ..............................................6
Regular Record Date ...........................................6
Regular Trustee ...............................................6
Responsible Officer ...........................................6
Securities ....................................................6
Securities Act ................................................6
Security Register .............................................6
Security Registrar ............................................6
Senior Indebtedness ...........................................6
Special Event .................................................7
Special Record Date ...........................................7
Stated Maturity ...............................................7
Subsidiary ....................................................7
Tax Event .....................................................7
Trust .........................................................8
Trustee .......................................................8
Trust Indenture Act ...........................................8
U.S. Government Obligations ...................................8
Vice President ................................................8
Voting Stock ..................................................8
SECTION 102. Compliance Certificates and Opinions .............8
SECTION 103. Form of Documents Delivered to Trustee ...........9
SECTION 104. Acts of Holders; Record Dates ....................9
SECTION 105. Notices, Etc. to Trustee and the Company ........10
SECTION 106. Notice to Holders; Waiver .......................11
SECTION 107. Conflict With Trust Indenture Act ...............11
SECTION 108. Effect of Headings and Table of Contents ........11
SECTION 109. Separability Clause .............................11
SECTION 110. Benefits of Indenture ...........................12
SECTION 111. GOVERNING LAW ...................................12
SECTION 112. Legal Holidays ..................................12
SECTION 113. Execution in Counterparts. ......................12
ii
<PAGE>
Page
----
SECTION 114. Successors. .....................................12
ARTICLE TWO
SECURITY FORMS ...............................................13
SECTION 201. Forms Generally .................................13
SECTION 202. Form of Face of Security ........................13
SECTION 203. Form of Reverse of Security .....................17
SECTION 204. Form of Trustee's Certificate of
Authentication ..................................19
ARTICLE THREE
THE SECURITIES ...............................................20
SECTION 301. Title and Terms .................................20
SECTION 302. Denominations ...................................22
SECTION 303. Execution, Authentication, Delivery
and Dating ......................................22
SECTION 304. Temporary Securities ............................22
SECTION 305. Registration; Registration of Transfer
and Exchange ....................................23
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities ......................................24
SECTION 307. Payment of Interest; Interest Rights
Preserved .......................................25
SECTION 308. Persons Deemed Owners ...........................26
SECTION 309. Cancellation ....................................26
SECTION 310. Computation of Interest .........................27
SECTION 311. Agreed Tax Treatment ............................27
SECTION 312. Right of Set-off ................................27
SECTION 313. CUSIP Numbers ...................................27
iii
<PAGE>
Page
----
SECTION 314. Global Securities ...............................27
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE .......................30
SECTION 401. Satisfaction and Discharge of Indenture .........30
SECTION 402. Legal Defeasance ................................31
SECTION 403. Covenant Defeasance .............................31
SECTION 404. Conditions to Legal Defeasance or Covenant
Defeasance ......................................32
SECTION 405. Application of Trust Money ......................33
SECTION 406. Indemnity for U.S. Government Obligations .......33
ARTICLE FIVE
REMEDIES .....................................................33
SECTION 501. Events of Default ...............................33
SECTION 502. Acceleration of Maturity; Rescission and
Annulment .......................................34
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee ..........................35
SECTION 504. Trustee May File Proofs of Claim ................35
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities ........................36
SECTION 506. Application of Money Collected ..................36
SECTION 507. Limitation on Suits .............................37
SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest;
Capital Security Holders' Rights ................37
SECTION 509. Restoration of Rights and Remedies ..............38
SECTION 510. Rights and Remedies Cumulative ..................38
SECTION 511. Delay or Omission Not Waiver ....................38
SECTION 512. Control by Holders ..............................38
iv
<PAGE>
Page
----
SECTION 513. Waiver of Past Defaults .........................39
SECTION 514. Undertaking for Costs ...........................39
SECTION 515. Waiver of Stay or Extension Laws ................40
ARTICLE SIX
TRUSTEE ......................................................40
SECTION 601. Certain Duties and Responsibilities .............40
SECTION 602. Notice of Defaults ..............................40
SECTION 603. Certain Rights of Trustee .......................41
SECTION 604. Not Responsible for Recitals or Issuance
of Securities ...................................42
SECTION 605. Trustee and Other Agents May Hold Securities ....42
SECTION 606. Money Held in Trust .............................42
SECTION 607. Compensation; Reimbursement; Indemnity ..........42
SECTION 608. Disqualification; Conflicting Interests .........43
SECTION 609. Corporate Trustee Required; Eligibility .........43
SECTION 610. Resignation and Removal; Appointment
of Successor ....................................43
SECTION 611. Acceptance of Appointment by Successor ..........44
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business ..........................45
SECTION 613. Preferential Collection of Claims
Against Company .................................45
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ............45
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders ............................45
SECTION 702. Preservation of Information;
Communications to Holders .......................46
SECTION 703. Reports by Trustee ..............................46
v
<PAGE>
Page
----
SECTION 704. Reports by Company ..............................46
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE .........47
SECTION 801. Company May Consolidate, Etc., Only
on Certain Terms ...............................47
SECTION 802. Successor Person Substituted ....................47
ARTICLE NINE
SUPPLEMENTAL INDENTURES ......................................48
SECTION 901. Supplemental Indentures Without Consent
of Holders ......................................48
SECTION 902. Supplemental Indentures With Consent
of Holders ......................................49
SECTION 903. Execution of Supplemental Indentures ............50
SECTION 904. Effect of Supplemental Indentures ...............50
SECTION 905. Conformity With Trust Indenture Act .............50
SECTION 906. Reference in Securities to Supplemental
Indentures ......................................50
ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES ....................50
SECTION 1001. Payment of Principal Interest ..................50
SECTION 1002. Maintenance of Office or Agency ................51
SECTION 1003. Money for Security Payments to be Held
in Trust .......................................51
SECTION 1004. Statements by Officers as to Default ...........52
SECTION 1005. Existence ......................................52
SECTION 1006. Maintenance of Properties ......................52
SECTION 1007. Payment of Taxes and Other Claims ..............53
SECTION 1008. Waiver of Certain Covenants ....................53
vi
<PAGE>
Page
----
SECTION 1009. Payment of the Trust's Costs and Expenses ......53
SECTION 1010. Limitation on Restricted Payments ..............54
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES ..................................55
SECTION 1101. Securities Subordinate to Senior
Indebtedness ...................................55
SECTION 1102. Default on Senior Indebtedness .................55
SECTION 1103. Prior Payment of Senior Indebtedness
Upon Acceleration of Securities ................56
SECTION 1104. Liquidation; Dissolution; Bankruptcy ...........56
SECTION 1105. Subrogation ....................................58
SECTION 1106. Trustee to Effect Subordination ................59
SECTION 1107. Notice by the Company ..........................59
SECTION 1108. Rights of the Trustee; Holders of
Senior Indebtedness ............................59
SECTION 1109. Subordination May Not Be Impaired ..............60
ARTICLE TWELVE
REDEMPTION OF SECURITIES .....................................61
SECTION 1201. Optional Redemption; Conditions to
Optional Redemption ............................61
SECTION 1202. Applicability of Article .......................61
SECTION 1203. Election to Redeem; Notice to Trustee ..........61
SECTION 1204. Selection by Trustee of Securities to
be Redeemed ....................................61
SECTION 1205. Notice of Redemption ...........................62
SECTION 1206. Deposit of Redemption Price ....................63
SECTION 1207. Securities Payable on Redemption Date ..........63
SECTION 1208. Securities Redeemed in Part ....................63
vii
<PAGE>
This INDENTURE is dated as of _________, 1998, between
GWL&A Financial Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein
called the "Company"), having its principal office at 8515 East
Orchard Road, Englewood, Colorado 80111, and The Bank of New
York, a New York State banking corporation, as Trustee (herein
called the "Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the
Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its % Junior
Subordinated Debentures due 2028 (the "Securities"); and
WHEREAS, Great-West Life & Annuity Insurance Capital I
(the "Trust") has offered to the public $________ aggregate
liquidation amount of its ____% Capital Securities (the "Capital
Securities") representing undivided beneficial ownership
interests in the assets of the Trust and proposes to invest the
proceeds from such offering and the proceeds from the issuance of
its Common Securities in $________ aggregate principal amount of
the Securities; and
WHEREAS, to provide the terms and conditions upon
which the Securities are to be authenticated, issued and
delivered, the Company has duly authorized the execution of this
Indenture; and
WHEREAS, all things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms,
have been done;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holder thereof, it is mutually
agreed, for the equal and proportionate benefit of all Holders of
the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions
For all purposes of this Indenture, except as
expressly provided or unless the context otherwise requires:
<PAGE>
2
(1) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(2) 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;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles;
(4) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision;
(5) a reference to any Person shall include its
successor and assigns;
(6) a reference to any agreement or instrument shall
mean such agreement or instrument as supplemented,
modified, amended or amended and restated and in effect
from time to time;
(7) a reference to any statute, law, rule or
regulation, shall include any amendments thereto applicable
to the relevant Person, and any successor statute, law,
rule or regulation; and
(8) a reference to any particular rating category
shall be deemed to include any corresponding successor
category, or any corresponding rating category issued by a
successor or subsequent rating agency.
"Act ", when used with respect to any Holder, has the
meaning specified in Section 104.
"Board of Directors " means either the board of
directors of the Company or any duly authorized committee of that
board as the context requires.
"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 and
to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day " means any day other than a Saturday or
Sunday or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
remain closed or a day on which the Corporate Trust Office of the
Trustee, or the corporate trust office of the Property Trustee
under the Declaration, is closed for business.
"Capital Lease Obligation " of any Person means any
obligation of such Person under any capital lease for real or
personal property which, in accordance with GAAP, is required to
be recorded as a capitalized lease obligation; and, for the
purpose of this Indenture, the amount
<PAGE>
3
of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP.
"Capital Securities " has the meaning specified in the
Recitals to this instrument.
"Capital Stock " in any Person means any and all
shares, interests, rights to purchase, warrants, options,
participations or other equivalents or interests in (however
designated) capital stock in which Person, including, with
respect to a corporation, common stock, preferred stock and other
corporate stock and, with respect to a partnership, partnership
interests, whether general or limited, and any rights (other than
debt securities convertible into corporate stock, partnership
interests or other capital stock), warrants or options
exchangeable for or convertible into such corporate stock,
partnership interests or other capital stock.
"Change in Investment Company Act Law " has the
meaning set forth in the definition of Investment Company Event.
"Closing Date " means ________, 1998.
"Commission " means the Securities and Exchange
Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities " means the common securities
issued by the Trust.
"Company " means the Person named as the "Company" in
the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.
"Company Request " or "Company Order " means a written
request or order signed in the name of the Company by its
Chairman of the Board, its Vice Chairman of the Board, a
President or a Vice President, and by its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office " means the principal office
of the Trustee in the City of New York, at which at any
particular time its corporate trust business shall be
administered and which at the date of this Indenture is located
at 101 Barclay Street, New York, New York 10286, Attention:
Corporate Trust Administration.
"Covenant Defeasance " has the meaning specified in
Section 403.
"Creditor " shall have the meaning set forth in
Section 1009.
"Declaration " means the Amended and Restated
Declaration of Trust among the Company, as Sponsor, the Regular
Trustees, The Bank of New York, as initial Property Trustee, and
The Bank of New York (Delaware), as initial Delaware Trustee,
dated as of ______, 1998.
<PAGE>
4
"Defaulted Interest " has the meaning specified in
Section 307.
"Depositary " means, with respect to Securities
issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act
that is designated to act as Depositary for such Securities.
"Event of Default " has the meaning specified in
Section 501.
"Exchange Act " means the Securities Exchange Act of
1934, as amended from time to time, and any successor
legislation.
"Extension Period " has the meaning specified in
Section 301.
"GAAP " means generally accepted accounting principles
as in effect from time to time in the United States.
"Guarantee " means the Guarantee Agreement, dated as
of _______, 1998, executed by the Company and The Bank of New
York, as initial Guarantee Trustee, for the benefit of the
Holders (as defined therein).
"Global Security " means a Security that evidences all
or part of the Securities and is authenticated and delivered to,
and registered in the name of, the Depositary for such Securities
or a nominee thereof.
"Holder " means a Person in whose name a Security is
registered in the Security 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, including, for
all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively.
"Interest Payment Date ", when used with respect to
any installment of interest on a Security, means the date
specified in such Security as the fixed date on which an
installment of interest with respect to the Securities is due and
payable.
"Investment Company Event " means the receipt by the
Trust of an opinion of counsel, rendered by a law firm
experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority (a "Change in Investment Company Act Law"), the Trust
is or will be considered an "investment company" that is required
to be registered under the Investment Company Act of 1940, as
amended, which Change in Investment Company Act Law becomes
effective on or after the date of original issuance of the
Securities.
<PAGE>
5
"Legal Defeasance " has the meaning specified in
Section 402.
"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 (which may be extended as therein or herein
provided) or by declaration of acceleration, call for redemption
or otherwise.
"Officers' Certificate " means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Controller, an
Assistant Controller, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004
shall be the principal executive, financial or accounting officer
of the Company. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this
Indenture 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
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"OID " means original issue discount.
"Opinion of Counsel " means a written opinion of
counsel, who may be counsel for the Company (and who may be an
employee of the Company), and who shall be reasonably acceptable
to the Trustee. An Opinion of Counsel may rely on certificates as
to matters of fact.
"Outstanding ", when used with respect to the
Securities, means, as of the date of determination, all
Securities authenticated and delivered under this Indenture,
except: (i) Securities canceled by the Trustee or delivered to
the Trustee for cancellation; (ii) Securities for whose payment
or redemption money in the necessary amount has been deposited
with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the
Trustee has been made; and (iii) Securities which have been paid
pursuant to Section 306, or in exchange or for in lieu of which
other Securities have been authenticated and delivered pursuant
to this Indenture; provided, however, that in determining whether
the holders of the requisite amount of Outstanding Securities are
present at a meeting of holders of Securities for quorum purposes
or
<PAGE>
6
have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or
modification hereunder, Securities held for the account of the
Company, any of its subsidiaries or any of its affiliates shall
be disregarded and deemed not to be Outstanding, except that in
determining whether the Trustee shall be protected in making such
a determination or relying upon any such quorum, consent or vote,
only Securities which the Trustee actually knows to be so owned
shall be so disregarded.
"Paying Agent " means 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, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivisions thereof.
"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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Property Trustee " has the meaning set forth in the
Declaration.
"Redemption Date ", when used with respect to any
Security to be redeemed, means the date fixed for such redemption
by or pursuant to this Indenture.
"Redemption Price ", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date " for the interest payable on any
Interest Payment Date means the [15th] day of the month (whether
or not a Business Day) prior to the relevant Interest Payment
Date.
"Regular Trustee " has the meaning set forth in the
Declaration.
"Responsible Officer ", when used with respect to the
Trustee, means any officer of the Trustee with direct
responsibility for the administration of this Indenture and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities " has the meaning specified in the
Recitals to this instrument.
"Securities Act " means the Securities Act of 1933, as
amended.
"Security Register " and "Security Registrar " have
the respective meanings specified in Section 305.
<PAGE>
7
"Senior Indebtedness " means, with respect to the
Company, whether recourse is to all or a portion of the assets of
the Company and whether or not contingent, (i) every obligation
of the Company for money borrowed; (ii) every obligation of the
Company evidenced by bonds, debentures, notes or other similar
instruments of the Company, including obligations incurred in
connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of the Company
with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of the Company; (iv)
every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary
course of business); (v) every Capital Lease Obligation of the
Company; (vi) every obligation of the Company for claims (as
defined in Section 101(4) of the United States Bankruptcy Code of
1978, as amended) in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts
and similar arrangements and (vii) every obligation of the type
referred to in clauses (i) through (vi) above of another Person
and all dividends of another Person the payment of which, in
either case, the Company has guaranteed or is responsible or
liable for, directly or indirectly, as obligor or otherwise;
provided, however, that "Senior Indebtedness" shall not be deemed
to include (i) any indebtedness of the Company that is by its
terms subordinated to or ranked pari passu with the Securities;
(ii) any indebtedness of the Company which when incurred and
without respect to any election under Section 1111(b) of the
United States Bankruptcy Code of 1978, as amended, was without
recourse to the Company; (iii) any indebtedness of the Company to
any of its subsidiaries; (iv) any indebtedness to any employee of
the Company; (v) trade accounts payable in the ordinary course of
business; or (vi) any indebtedness in respect of debt securities
issued to any trust, or a trustee of such trust, partnership or
other entity affiliated with the Company that is a financing
entity of the Company in connection with the issuance of such
financing entity of securities that are similar to the Capital
Securities.
"Special Event " means an Investment Company Event or
a Tax Event.
"Special Record Date " for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to
Section 307.
"Stated Maturity ", when used with respect to any
Security or any installment of interest thereon, means the date
specified in such Security as the date on which the principal,
together with any accrued and unpaid interest, of such Security
or such installment of interest is due and payable.
"Subsidiary " means, with respect to any Person, any
corporation, association or other business entity of which more
than 50% of the voting power of the Voting Stock thereof is at
the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or
a combination thereof.
"Tax Event " means the receipt by the Trust of an
opinion of counsel experienced in such matters to the effect
that, as a result of (a) any amendment to or change (including
any announced prospective change) in the laws or any regulations
thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or (b) any judicial decision
or any official administrative pronouncement (including any
private letter ruling, technical advice
<PAGE>
8
memorandum or Chief Counsel advice, as defined by the Code) or
regulatory procedure (an "Administrative Action"), regardless of
whether such judicial decision or Administrative Action is issued
to or in connection with a proceeding involving the Company or
the Trust and whether or not subject to review or appeal, which
amendment, change, decision or Administrative Action is enacted,
released by the Internal Revenue Service, promulgated or
announced, in each case, on or after the date of this Indenture,
there is more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received
or accrued on the Securities, (ii) interest payable by the
Company or OID accruing on the Securities is not, or within 90
days of the date of such opinion, will not be, deductible by the
Company, in whole or in part, for United States federal income
tax purposes or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Trust " has the meaning specified in the Recitals to
this instrument.
"Trustee " means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor Trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean such
successor Trustee.
"Trust Indenture Act " means the Trust Indenture Act
of 1939 as in force at the date as of which this instrument was
executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligations " has the meaning
specified in Section 404.
"Vice President ", when used with respect to the
Company or the Trustee, 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 Capital Stock of the class or
classes of which the holders have (i) in respect of a
corporation, the general voting power under ordinary
circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation (irrespective
of whether or not at the time Capital Stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency) or (ii) in respect of a
partnership, the general voting power under ordinary
circumstances to elect the board of directors or other governing
board of such partnership or of the Person which is a general
partner of such partnership.
SECTION 102. Compliance Certificates 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 such certificates and
opinions as may be required under the Trust Indenture Act. Each
such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the
Company,
<PAGE>
9
or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any
other requirement set forth in this Indenture.
SECTION 103. Form 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 the matters upon which his 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 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given 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 are delivered to the Trustee at the address
specified in Section 105 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 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a
Holder, including a Depositary that is a Holder of a Global
Security, may make, give or take by proxy or proxies, duly
appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by
Holders, and a Depositary
<PAGE>
10
that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global
Security.
(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 a certificate of a 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 the execution thereof. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date
of the execution 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.
(c) The Company may, in the circumstances permitted by
the Trust Indenture Act, fix any day as the record date for the
purpose of determining the Holders entitled to give or take any
request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or
vote shall be the 30th day (or, if later, the date of the most
recent list of Holders required to be provided pursuant to
Section 701) prior to such first solicitation or vote, as the
case may be.
With regard to any record date, only the Holders on
such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action, except as provided
in paragraph (a) of this Section 104.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any
Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted 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.
SECTION 105. Notices, Etc. to Trustee and the 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:
(1) 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, Attention: Corporate Trust
Administration; or
(2) the Company by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and delivered,
telecopied or mailed by registered or certified mail, to
the Company addressed
<PAGE>
11
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, Attention: Secretary.
SECTION 106. 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 by
registered or certified mail, to each Holder affected by such
event, at his address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the
earliest date (if any), 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, 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 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act that is required
under such Act to be a part of and govern this Indenture, the
provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so
modified or so excluded, as the case may be.
SECTION 108. 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 109. 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.
<PAGE>
12
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of
Senior Indebtedness, the holders of Capital Securities (to the
extent provided herein) and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 111. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF. THIS
INDENTURE IS SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT
THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE
EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest or principal
of the Securities need not be made on such date, but may be made
on the next succeeding Business Day (except that, if such
Business Day falls in the next calendar year, then such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may
be, shall be the immediately preceding Business Day) in each case
with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, provided that
no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 113. Execution in Counterparts.
This 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.
SECTION 114. Successors.
All the covenants, stipulations, promises and
agreements of the Company in this Indenture shall be binding upon
its successors and assigns.
<PAGE>
13
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of
authentication shall be in substantially the forms set forth in
this Article, 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 may be required to comply with the rules of any
securities exchange or as may, consistent herewith, be determined
by the officers executing such Securities, as evidenced by their
execution of the Securities.
The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of these
or other methods, all as determined by the officers executing
such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
______% GWL&A FINANCIAL INC.
Junior Subordinated Debenture due 2028
$
No. 1
CUSIP No. [insert]
GWL&A Financial Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called
the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received,
hereby promises to pay to The Bank of New York, as Property
Trustee for Great-West Life & Annuity Insurance Capital I, or
registered assigns, the principal sum of ______________ DOLLARS
($ ) on ________, 2028, and to pay interest on said principal
sum from __________, 1998 or from the most recent interest
payment date to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of
each year (each such date, an "Interest Payment Date"),
commencing March 31, 1999, at the rate of _____% per annum until
the principal hereof shall have become due and payable, and on
any overdue principal 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. The amount of interest payable for any full interest
period shall be computed by dividing the applicable rate per
annum by four. The amount of interest payable for any period less
than a full interest period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed
in a partial month in such period. In the event that any date on
which interest is payable on this Security is not a Business Day,
then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business
<PAGE>
14
Day (and without any interest or other payment in respect of any
such delay), except that if such next succeeding Business Day
falls in the next calendar year, then such payment shall be made
on the immediately preceding Business Day, in each case with the
some force and effect as if made on the date the payment was
originally payable. A "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Trustee, or the corporate trust
office of the Property Trustee under the Declaration, is closed
for business. 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
the Securities (or one or more Predecessor Securities, as defined
in the Indenture) are registered at the close of business on the
Regular Record Date for such interest installment, which shall be
the [15]th day of the month (whether or not a Business Day) prior
to which such Interest Payment Date occurs. Any such interest
installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
the Securities (or one or more Predecessor Securities) are
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders not less than
10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right to defer payment of
interest at any time or from time to time for a period not
exceeding 20 consecutive quarters (each, an "Extension Period"),
provided that no Extension Period may extend past the Stated
Maturity of this Security or end on a day other than an Interest
Payment Date. Upon termination of any such Extension Period and
the payment of all amounts then due on any Interest Payment Date,
the Company may elect to begin a new Extension Period subject to
the requirements set forth herein. Accordingly, there may be
multiple Extension Periods of varying lengths during the term of
this Security. At the end of each Extension Period, if any, the
Company shall pay all interest then accrued and unpaid, together
with interest thereon, compounded quarterly at the rate specified
on this Security to the extent permitted by applicable
law. During any such Extension Period, the Company may not, and
may not permit any Subsidiary of the Company to, (i) declare or
pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal
or interest on or repay, repurchase or redeem any debt securities
of the Company that rank pari passu with or junior in interest to
the Securities or (iii) make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any
Subsidiary of the Company if such guarantee ranks pari passu or
junior in interest to the Securities (other than (a) dividends or
distributions in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock, (b) payments under the
Guarantee, (c) any declaration of a dividend in connection with
the implementation of a shareholders' rights plan, or the
issuance of rights, stock or other property under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto, (d) as a result of reclassification of the
<PAGE>
15
Company's capital stock into one or more other classes or series
of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for another class
or series of the Company's capital stock, or of any class or
series of the Company's indebtedness for any class or series of
the Company's capital stock, (e) the purchase of fractional
interests in the 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 and (f) repurchases,
redemptions or other acquisitions of common stock related to the
issuance of common stock or rights under any of the Company's
employment contracts, benefit plans or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to
the applicable Extension Period). Prior to the termination of any
such Extension Period, the Company may further extend the
Extension Period, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of this
Security or end on any day other than an Interest Payment Date.
Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Company
may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company shall
give the Property Trustee, the Regular Trustees and the Trustee
notice of its election of such Extension Period at least one
Business Day prior to the earlier of (i) the Interest Payment
Date or (ii) the date the Regular Trustees are required to give
notice to any applicable self-regulatory organization or to
holders of such Capital Securities of the record date or the date
the related distributions are payable, but in any event not less
than one Business Day prior to such record date.
Payment of the principal of and interest on this
Security will be made at the office or agency of the Paying Agent
maintained for that purpose in the United States, in such coin or
currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of
interest may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the
Security Register.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effect the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, 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.
<PAGE>
16
Reference is hereby made to the further provisions of
the Indenture summarized on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, GWL&A Financial Inc. has caused
this instrument to be duly executed and delivered.
GWL&A FINANCIAL INC.
By:______________________
Name:
Title:
By:______________________
Name:
Title:
<PAGE>
17
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
Securities of GWL&A Financial Inc. (the "Company"), designated as
its ______% Junior Subordinated Debentures due 2028 (herein
called the "Securities"), limited in aggregate principal amount
to $_________ issued under an Indenture, dated as of _________,
1998 (herein called the "Indenture"), between the Company and The
Bank of New York, a New York State banking corporation, as
Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which the Indenture
and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and
the Holders, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
At any time on or after ________, 2003, the Securities
are redeemable at the option of the Company, subject to the last
paragraph of Section 1201 of the Indenture, in whole or in part
at any time at 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the Redemption Date.
If a Special Event shall occur and be continuing, the
Company shall have the right, within 90 days of the occurrence of
such Special Event, subject to the last paragraph of Section 1201
of the Indenture, to redeem, upon not less than 30 days nor more
than 60 days notice, the Securities in whole, but not in part, at
a Redemption Price equal to 100% of the principal amount of
Securities then Outstanding plus accrued and unpaid interest
thereon to, but excluding, the date of prepayment.
If the Securities are only partially redeemed by the
Company, the Securities will be redeemed pro rata. If a partial
redemption of the Capital Securities resulting from a partial
redemption of the Securities would result in the delisting of the
Capital Securities from any securities exchange or quoting
service on which the Capital Securities are then listed or
quoted, the Company may only redeem the Securities in whole. In
the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation
hereof.
If an Event of Default with respect to the Securities
shall occur and be continuing, the principal of the Securities
may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and
discharge or legal defeasance of the entire indebtedness of this
Security and for the defeasance of certain covenants under the
Indenture at any time upon compliance by the Company with certain
conditions set forth in the Indenture.
<PAGE>
18
The Indenture contains provisions permitting the
Company and the Trustee, with the consent of Holders of not less
than a majority in principal amount of the Outstanding Securities
affected, to execute supplemental indentures which modify the
Indenture in a manner affecting the rights of the Holders of the
Securities; provided that no such supplemental indenture may,
without the consent of the Holder of each Outstanding Security
affected thereby, (i) except to the extent permitted and subject
to the conditions set forth in the Indenture with respect to the
extension of the Stated Maturity of the Security, change the
maturity of, the principal of, or any installment of interest on,
the Security or reduce the principal amount thereof, or the rate
of payment of interest thereon, or change the place of payment
where, or the coin or currency in which, this Security or
interest thereon is payable, or impair the right to institute
suit for the enforcement of such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of the Indenture with
respect to the subordination of the Securities in a manner
adverse to the Holders, (ii) reduce the percentage in principal
amount of the Outstanding Securities, 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 provisions of the Indenture or certain
defaults hereunder and their consequences) provided for in the
Indenture, or (iii) modify any of the provisions of Section 513,
Section 902 or Section 1008 of the Indenture, except to increase
any such percentage or to provide that certain other provisions
of the Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby,
provided that, so long as any of the Capital Securities remains
outstanding, no such amendment shall be made that adversely
affects the holders of the Capital Securities in any material
respect, and no termination of the Indenture may occur, and no
waiver of an Event of Default or compliance with any covenant
under the Indenture may be effective, without the prior consent
of the holders of at least a majority of the aggregate
liquidation amount of the outstanding Capital Securities unless
and until the principal of the Securities and all accrued and
unpaid interest thereon have been paid in full.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Security at the
times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of
the Company in New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
this
<PAGE>
19
Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and none of the Company,
the Trustee or any such agent shall be affected by notice to the
contrary.
The Securities 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, Securities are exchangeable for a
like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering
the same.
The Company and, by its acceptance or acquisition of
this Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, this
Security intend and agree to treat this Security as indebtedness
of the Company for United States federal, state and local tax
purposes.
THE SECURITIES AND THE INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated: ________ THE BANK OF NEW YORK, as Trustee
By:_____________________________
Authorized Signatory
<PAGE>
20
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is limited to
$__________, except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Sections 304, 305, 306, 906 or
1208.
The Securities shall be known and designated as the
"_______% Junior Subordinated Debentures due 2028" of the
Company. Their Stated Maturity shall be __________, 2028.
The Securities shall bear interest at the rate of
_____% per annum, from _________, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable quarterly (subject to
deferral as set forth herein), in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing March 31,
1999, until the principal thereof is paid or made available for
payment. Interest will compound quarterly and will accrue at the
rate of ______% per annum on any interest installment in arrears
for more than one quarterly period or during an extension of an
interest payment period as set forth below in this Section 301.
In the event that any date on which interest is payable on the
Securities is not a Business Day, then a payment of the 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 such delay), except that if such Business
Day falls in the next succeeding calendar year, then 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 date such
payment was originally payable.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right to defer the payment
of interest at any time or from time to time for a period not
exceeding 20 consecutive quarters (each, an "Extension Period"),
provided that no Extension Period may extend past the Stated
Maturity of this Security or end on a day other than an Interest
Payment Date. Upon termination of any such Extension Period and
the payment of all amounts then due on any Interest Payment Date,
the Company may elect to begin a new Extension Period subject to
the requirements set forth herein. Accordingly, there may be
multiple Extension Periods of varying lengths during the term of
this Security. At the end of each Extension Period, if any, the
Company shall pay all interest then accrued and unpaid, together
with interest thereon, compounded quarterly at the rate specified
on this Security to the extent permitted by applicable law.
During any such Extension Period, the Company may not, and may
not permit any Subsidiary of the Company to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal or
interest on or repay, repurchase or redeem any debt securities of
the Company that rank pari passu with or junior in interest to
the Securities or (iii) make any guarantee payments with respect
to any guarantee by the Company of the debt
<PAGE>
21
securities of any Subsidiary of the Company if such guarantee
ranks pari passu or junior in interest to the Securities (other
than (a) dividends or distributions in the form of stock,
warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other
rights is the same stock as that on which the dividend is being
paid or ranks pari passu with or junior to such stock, (b)
payments under the Guarantee, (c) any declaration of a dividend
in connection with the implementation of a shareholders' rights
plan, or the issuance of rights, stock or other property under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (d) as a result of
reclassification of the Company's capital stock into one or more
other classes or series of the Company's capital stock or the
exchange or conversion of one class or series of the Company's
capital stock (or any capital stock of a subsidiary of the
Company) for another class or series of the Company's capital
stock, or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (e) the
purchase of fractional interests in the 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 and (f) repurchases, redemptions or other acquisitions
of common stock related to the issuance of common stock or rights
under any of the Company's employment contracts, benefit plans or
other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with
a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period). Prior to the
termination of any such Extension Period. Prior to the
termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension
Period may exceed 20 consecutive quarters or extend beyond the
Stated Maturity of the Securities or end on any day other than an
Interest Payment Date. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest
Payment Date, the Company may elect to begin a new Extension
Period subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end
thereof. The Company shall give the Property Trustee, the Regular
Trustees and the Trustee notice of its election of such Extension
Period at least one Business Day prior to the earlier of (i) the
Interest Payment Date or (ii) the date the Regular Trustees are
required to give notice to any applicable self-regulatory
organization or to holders of such Capital Securities of the
record date or the date the related distributions are payable,
but in any event not less than one Business Day prior to such
record date.
The Property Trustee shall promptly give notice of the
Company's election to begin a new Extension Period to the holders
of the Capital Securities.
The principal of and interest on the Securities shall
be payable at the office or agency of the Paying Agent in the
United States maintained for such purpose and at any other office
or agency maintained by the Company for such purpose in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer in immediately
available funds at such
<PAGE>
22
place and to such account as may be designated in writing to the
Paying Agent prior to the relevant Record Date by the Person
entitled thereto as specified in the Security Register.
The Securities shall be subordinated in right of
payment to Senior Indebtedness as provided in Article Eleven.
The Securities shall be redeemable as provided in
Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered
form, without coupons, and only in denominations of $25 and any
integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman of the
Board, a President or one of its Vice Presidents. 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, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee
in accordance with such Company Order shall authenticate and
deliver such Securities as in this Indenture provided and not
otherwise.
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 manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence,
that such Security has been duly authenticated and delivered
hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, 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 authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other
variations as the
<PAGE>
23
officers executing such Securities may determine, as evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will
cause definitive Securities 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 any
office or agency of the Company designated pursuant to Section
1002, 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 authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained
in such office and in any other office or agency designated
pursuant to Section 1002 being herein sometimes collectively
referred to as the "Security 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. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any
Security at an office or agency of the Company designated
pursuant to Section 1002 for such 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 any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Securities may be
exchanged for other Securities of any authorized denominations
and of a like aggregate principal amount, 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 registration of
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 registration of transfer or exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall be duly endorsed,
or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized
in writing.
<PAGE>
24
No service charge shall be made for any registration
of 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
registration of transfer or exchange of Securities, other than
exchanges pursuant to Sections 304, 906 or 1208 not involving any
transfer.
If the Securities are to be redeemed in whole or in
part, the Company shall not be required (i) to issue, register
the transfer of or exchange any Securities during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities
selected for redemption under Section 1204 and ending at the
close of business on the day of such mailing, or (ii) to register
the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
The transfer and exchange of beneficial interests in
any Global Security, which does not involve the issuance of a
definitive Security or the transfer of interests to another
Global Security, shall be effected through the Depositary (but
not the Trustee) in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of
the Depositary therefor. The Trustee (in its capacity as such)
will not have any responsibility for the transfer and exchange of
beneficial interests in such Global Security that does not
involve the issuance of a definitive Security or the transfer of
interests to another Global Security.
SECTION 306. 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
like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and 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 hold each of them and any agent of
either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a new Security of like tenor and
principal amount 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.
<PAGE>
25
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 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security 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 except
that, interest payable on the Stated Maturity of the principal of
a Security shall be paid to the Person to whom principal is paid.
Any interest on any Security which is payable, but is
not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (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 by registered or certified mail,
to each Holder at his address as it appears in the Security
Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their
<PAGE>
26
respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) 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 may be listed, and if so listed, upon such
notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of
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.
Defaulted Interest will bear additional interest on
the amount thereof (to the extent permitted by law) at the rate
per annum of _____%, compounded quarterly.
SECTION 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company
or the Trustee shall treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 307)
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.
No holder of any beneficial interest in any Global
Security held on its behalf by a Depositary shall have any rights
under this Indenture with respect to such Global Security, and
such Depositary may be treated by the Company the Trustee and any
agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee
or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished
by a Depositary or impair, as between a Depositary and such
holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary
(or its nominee) as holder of any Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and
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.
<PAGE>
27
All canceled Securities held by the Trustee shall be disposed of
by the Trustee in accordance with its customary procedures and
the Trustee shall deliver to the Company a certification of such
disposition, unless the Trustee is otherwise directed by a
Company Order; provided, that in no event shall the Trustee be
directed to destroy any canceled Security.
SECTION 310. Computation of Interest.
The amount of interest payable for any full interest
period shall be computed by dividing the applicable rate per
annum by four. The amount of interest payable for any period less
than a full interest period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed
in a partial month in such period.
SECTION 311. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the
Company and, by its acceptance or acquisition of a Security or a
beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, such Security intend and agree
to treat such Security as indebtedness of the Company for United
States federal, state and local tax purposes and, with respect to
Securities issued to the Trust, to treat Capital Securities and
Common Securities of such Trust (including but not limited to all
payments and proceeds with respect to such Capital Securities and
Common Securities) as an undivided beneficial ownership interest
in the Securities (and payments and proceeds therefrom,
respectively) for United States federal, state and local tax
purposes. The provisions of this Indenture shall be interpreted
to further this intention and agreement of the parties.
SECTION 312. Right of Set-off.
Notwithstanding anything to the contrary in this
Indenture, the Company shall have the right to set-off any
payment it is otherwise required to make hereunder to the extent
the Company has theretofore made, or is concurrently on the date
of such payment making, a payment under the Guarantee.
SECTION 313. 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 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.
SECTION 314. Global Securities.
If the Securities are distributed to the holders of
Capital Securities, Securities distributed in respect of Capital
Securities that are held in global form by a Depositary will
<PAGE>
28
initially be issued as a Global Security, unless such transfer
cannot be effected through book-entry settlement. If the Company
shall establish that the Securities are to be issued in the form
of one or more Global Securities, then the Company shall execute
and the Trustee shall, in accordance with Section 303 and a
Company Order, authenticate and deliver one or more Global
Securities that (i) shall represent and shall be denominated in
an amount equal to the aggregate principal amount of all of the
Securities to be issued in the form of Global Securities and not
yet canceled, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee
of such Depositary, and (iii) shall be delivered by the Trustee
to such Depositary or pursuant to such Depositary's instructions.
Global Securities shall bear a legend substantially to the
following effect:
"This Security is a Global Security within the meaning
of the Indenture hereinafter referred to and is registered
in the name of a Depositary or a nominee of a Depositary.
Notwithstanding the provisions of Section 305 of the
Indenture, unless and until it is exchanged in whole or in
part for Securities in definitive registered form, a Global
Security representing all or a part of the Securities may
not be transferred in the manner provided in Section 305
except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary. Every Security
delivered upon registration or transfer of, or in exchange
for, or in lieu of, this Global Security shall be a Global
Security subject to the foregoing, except in the limited
circumstances described above. Unless this certificate is
presented by an authorized representative of The Depositary
Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is to
be made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest
herein."
Definitive Securities issued in exchange for all or a
part of a Global Security pursuant to this Section 314 shall be
registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver such
definitive Securities to the Persons in whose names such
definitive Securities are so registered.
At such time as all interests in Global Securities
have been redeemed, repurchased or canceled, such Global
Securities shall be, upon receipt thereof, canceled by the
Trustee in accordance with standing procedures and instructions
existing between the Depositary and the Trustee. At any time
prior to such cancellation, if any interest in Global Securities
is exchanged for definitive Securities, redeemed, canceled or
transferred to a transferee who receives definitive Securities
therefor or any definitive Security is exchanged or transferred
for part of Global
<PAGE>
29
Securities, the principal amount of such Global Securities shall,
in accordance with the standing procedures and instructions
existing between the Depositary and the Trustee, be reduced or
increased, as the case may be, and an endorsement shall be made
on such Global Securities by the Trustee to reflect such
reduction or increase.
The Company and the Trustee may for all purposes,
including the making of payments due on the Securities, deal with
the Depositary as the authorized representative of the Holders
for the purposes of exercising the rights of Holders hereunder.
The rights of the owner of any beneficial interest in a Global
Security shall be limited to those established by law and
agreements between such owners and depository participants;
provided, that no such agreement shall give any rights to any
Person against the Company or the Trustee without the written
consent of the parties so affected. Multiple requests and
directions from and votes of the Depositary as Holder of
Securities in global form with respect to any particular matter
shall not be deemed inconsistent to the extent they do not
represent an amount of Securities in excess of those held in the
name of the Depositary or its nominee.
If at any time the Depositary for any Securities
represented by one or more Global Securities notifies the Company
that it is unwilling or unable to continue as Depositary for such
Securities or if at any time the Depositary for such Securities
shall no longer registered or in good standing under the Exchange
Act, the Company shall appoint a successor Depositary with
respect to such Securities. If a successor Depositary for such
Securities is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such
condition, the Company's election that such Securities be
represented by one or more Global Securities shall no longer be
effective and the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of
definitive Securities, will authenticate and deliver Securities
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities,
in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion
determine that the Securities issued in the form of one or more
Global Securities shall no longer be represented by a Global
Security or Securities. In such event the Company shall execute,
and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities, shall
authenticate and deliver, Securities in definitive registered
form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such
Global Security or Securities.
If specified by the Company with respect to Securities
represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole
or in part for Securities in definitive registered form on such
terms as are acceptable to the Company and such Depositary.
Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge, (i) to the
Person specified by such Depositary, the new Security or
Securities, of any authorized denominations as requested by such
Person, in an aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a
<PAGE>
30
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and
delivered pursuant to clause (i) above. Upon the exchange of a
Global Security for Securities in definitive registered form in
authorized denominations, such Global Security shall be canceled
by the Trustee or an agent of the Company or the Trustee.
Securities in definitive registered form issued in exchange for a
Global Security pursuant to this Section 314 shall be registered
in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Company or the Trustee.
The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such
Securities are so registered.
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect
(except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the
Trustee, on written demand of and at the expense of the Company,
shall execute instruments supplied by the Company acknowledging
satisfaction and discharge of this Indenture, when (1) either (A)
all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and
(ii) 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 1003) have been delivered to the
Trustee for cancellation; or (B) all such Securities not
theretofore delivered to the Trustee for cancellation (i) have
become due and payable, or (ii) will become due and payable at
their Maturity within one year, or (iii) if redeemable at the
option of the Company, are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company, and the Company, in the case of (i),
(ii) or (iii) above, has deposited or caused to be deposited with
the Trustee as funds in trust for the purpose an amount of money
and/or securities specified in Section 404(a)(ii) and (iii)
hereof sufficient to pay and discharge the entire indebtedness in
such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be; (2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and (3) the Company
has delivered to the Trustee 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. Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of
the Company to the Trustee under Section 607 and, if money and/or
the above-referenced securities shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 402 and the
last paragraph of Section 1003 shall survive, and until such time
as
<PAGE>
31
any Securities described in subclause (B) of clause (1) of this
Section 401 become due and payable or are redeemable, the Company
shall remain obligated to the Holders of such Securities for all
payments due thereunder, including the delivery of additional
funds to the Trustee if the funds previously deposited with the
Trustee pursuant to subclause (B) of clause (1) of this Section
401 are insufficient to satisfy in full the amount of such
payments.
SECTION 402. Legal Defeasance.
In addition to discharge of this Indenture pursuant to
Section 401, in the case of any Securities with respect to which
the exact amount described in subparagraph (a) of Section 404 can
be determined at the time of making the deposit referred to in
such subparagraph (a), the Company shall be deemed to have paid
and discharged the entire indebtedness on all the Securities as
provided in this Section on and after the date the conditions set
forth in Section 404 are satisfied, and the provisions of this
Indenture with respect to the Securities shall no longer be in
effect (except as to (i) rights of registration of transfer and
exchange of Securities, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of Holders to
receive, solely from the trust fund described in subparagraph (a)
of Section 404, payments of principal thereof and interest, if
any, thereon upon the original stated due dates therefor (but not
upon acceleration), (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) this Section 402 and
(vi) the rights of the Holders of Securities as beneficiaries
hereof with respect to the property so deposited with the Trustee
payable to all or any of them) (hereinafter called "Legal
Defeasance"), and the Trustee, at the cost and expense of the
Company, shall execute proper instruments acknowledging the same.
SECTION 403. Covenant Defeasance.
In the case of any Securities with respect to which
the exact amount described in subparagraph (a) of Section 404 can
be determined at the time of making the deposit referred to in
such subparagraph (a), (I) the Company shall be released from its
obligations under any covenants specified in or pursuant to this
Indenture (except as to (i) rights of registration of transfer
and exchange of Securities, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Securities, (iii) rights of
Holders to receive, from the Company pursuant to Section 1001,
payments of principal thereof and interest, if any, thereon upon
the original stated due dates therefor (but not upon
acceleration), (iv) the rights, obligations, duties and
immunities of the Trustee hereunder and (v) the rights of the
Holders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them), and
(II) the occurrence of any event specified in Section 501(3)
(with respect to any of the covenants specified in or pursuant to
this Indenture) shall be deemed not to be or result in an Event
of Default, in each case with respect to the Outstanding
Securities as provided in this Section on and after the date the
conditions set forth in Section 404 are satisfied) (hereinafter
called "Covenant Defeasance"), and the Trustee, at the cost and
expense of the Company, shall execute proper instruments
acknowledging the same. For this purpose, such Covenant
Defeasance means that 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 covenant, whether directly or
indirectly by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant
to any
<PAGE>
32
other provision herein or in any other document, but the
remainder of this Indenture and the Securities shall be
unaffected thereby.
SECTION 404. Conditions to Legal Defeasance or Covenant
Defeasance.
The following shall be the conditions to application
of either Section 402 or 403 to the Outstanding Securities:
(a) with reference to Section 402 or 403, the Company
has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as funds in trust, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders (i) cash, (ii) direct obligations of
the United States of America, backed by its full faith and
credit ("U.S. Government Obligations"), maturing as to
principal and interest, if any, at such times and in such
amounts as will ensure the availability of cash, (iii)
obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the
United States of America, or (iv) a combination thereof, in
each case sufficient, in the opinion of a
nationally-recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the
principal of and interest, if any, on all Securities on
each date that such principal or interest, if any, is due
and payable;
(b) in the case of Legal Defeasance under Section 402,
the Company has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Company has received
from, or there has been published by, the Internal Revenue
Service a ruling or (y), since the date hereof, there has
been a change in the applicable United States federal
income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders will not recognize
income, gain or loss for U.S. federal income tax purposes
as a result of such deposit and Legal Defeasance and will
be subject to U.S. federal income tax on the same amount
and in the same manner and at the same times as would have
been the case if such deposit and Legal Defeasance had not
occurred;
(c) in the case of Covenant Defeasance under Section
403, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that, and such opinion shall confirm
that, the Holders will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such
deposit and Covenant Defeasance and will be subject to U.S.
federal income tax on the same amount and in the same
manner and at the same times as would have been the case if
such deposit and Covenant Defeasance had not occurred;
(d) such Legal Defeasance or Covenant Defeasance will
not result in a breach or violation of, or constitute a
default under, any agreement or instrument to which the
Company is a party or by which it is bound; and
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33
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent contemplated by this
provision have been complied with.
SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money and U.S. Government Obligations and
obligations of certain Persons deposited with the Trustee
pursuant to Sections 401 and 404 shall be held in trust and such
money and all money from such U.S. Government Obligations and
obligations of certain Persons shall be 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 interest for whose payment such money, U.S.
Government Obligations and obligations of certain Persons have
been deposited with the Trustee.
SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against either the U.S. Government Obligations or the obligations
of certain Persons deposited pursuant to Section 404 or the
principal or interest received in respect of such obligations,
other than any such tax, fee or other charge that by law is for
the account of the Holders.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default" wherever used herein, means any one
of the following events that has occurred and is continuing
(whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Eleven or 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):
(1) failure to pay any interest on the Securities when
due and payable, and continuance of such default for a
period of 30 days (subject to the deferral of any due date
in the case of an Extension Period); or
(2) failure to pay any principal on the Securities
when due , whether at Stated Maturity, upon redemption, by
declaration of acceleration or otherwise, provided,
however, that an extension of the Stated Maturity of the
Securities in accordance with the terms of this Indenture
shall not constitute an Event of Default; or
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34
(3) failure to observe or perform any other covenant
herein that continues for 90 days after written notice to
the Company from the Trustee or to the Company and the
Trustee from the Holders of at least 25% in aggregate
outstanding principal amount of Outstanding Securities; or
(4) entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or
order 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 law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of substantially all of
the property of the Company, or ordering the winding up or
liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or
order unstayed and in effect for a period of 90 consecutive
days; or
(5) (A) the commencement by the Company of a voluntary
case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, (B) the consent by the Company to
the entry of a decree or order for relief in respect of
itself in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against
the Company, (C) the filing by the Company of a petition or
answer or consent seeking reorganization or relief under
any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, (D) the consent by the
Company to the filing of such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of all or
substantially all of the property of the Company, (E) the
making by the Company of an assignment for the benefit of
creditors, or (F) the admission by the Company in writing
of its inability to pay its debts generally as they become
due and its willingness to be adjudicated as bankrupt, or
the taking of corporate action by the Company in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then
and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding
Securities shall have the right to declare the principal of and
the interest on all the Securities and any other amounts payable
hereunder to be due and payable immediately, provided, however,
that if upon an Event of Default the Trustee or the Holders of at
least 25% in aggregate principal amount of the outstanding
Securities fail to declare the payment of all amounts on the
Securities to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of Capital Securities
then outstanding shall have such right, by a notice in writing to
the Company (and to the Trustee if given by Holders or the
holders of Capital Securities) and upon any such declaration such
principal and all
<PAGE>
35
accrued interest shall become immediately due and payable.
Payment of principal and interest on such Securities shall remain
subordinated to the extent provided in Article 13 notwithstanding
that such amount shall become immediately due and payable as
herein provided.
At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter
provided in this Article, the Holders of a majority in aggregate
principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (1) the Company has paid or
deposited with the Trustee a sum sufficient to pay (A) all
overdue interest on all Securities, (B) the principal of any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Securities, (C) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate
borne by the Securities, and (D) all sums paid or advanced by the
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 607;
and (2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as
provided in Section 513. Should the Holders of such Securities
fail to annul such declaration and waive such default, the
holders of a majority in aggregate liquidation amount of the
Capital Securities shall have such right. No such rescission
shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on
any Security when such interest becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
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 and interest,
and, to the extent that payment thereof shall be legally
enforceable, interest on any overdue principal and on any overdue
interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and other amounts due the
Trustee under Section 607.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders 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.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition
or other similar judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such
proceeding. 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 506; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize 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 the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims 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 any express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee
under Section 607, its agents and counsel, be for the ratable
benefit of the Holders in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money collected by the
Trustee 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 on account of principal
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 under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid
for principal of and interest on the Securities 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
Securities for principal and interest, respectively.
THIRD: The balance, if any, to the Person or Persons
entitled thereto.
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SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal
amount of the Outstanding Securities 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;
(3) 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;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute any such proceeding; and
(5) 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;
it being understood and intended that no one or more 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, or to obtain or to
seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the
Holders.
Nothing contained in this Section 507 or any other
provision of this Indenture shall affect the rights of a holder
of Capital Securities set forth in Section 508 of this Indenture
and Section 7.5(c) of the Declaration.
SECTION 508. Unconditional Right of Holders to Receive Principal
and Interest;Capital Security Holders' Rights.
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 (subject to Section 307) interest on such Security on the
Stated Maturity expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
If an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to
pay interest or principal on the Securities on the date such
interest or principal is otherwise payable, a holder of Capital
Securities may directly
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institute a proceeding against the Company for enforcement of
payment to such holder directly of the principal of and interest
on the Securities having a principal amount equal to the
aggregate liquidation amount of the Capital Securities held by
such holder on or after the respective due date specified in the
Securities.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee, any holder of Capital Securities 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, to such holder of Capital Securities or
to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee, the
holders of Capital Securities and the Holders shall be restored
severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee, the
holders of Capital Securities and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee, to the
holders of Capital Securities 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee, of any holder of
Capital Securities 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, to the
holders of Capital Securities or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by
the Trustee, by the holders of Capital Securities or by the
Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power
conferred on the Trustee, provided that:
(1) such direction shall not be in conflict with any
rule of law or with this Indenture (including without
limitation the second paragraph of Section 508 hereof); and
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39
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1008 hereof, the Holders
of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all the
Securities, waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or interest on
any Security (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been
deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without
the consent of the Holder of each Outstanding Security
affected;
provided, however, that such waiver or modification to such
waiver shall not be effective until the holders of a majority in
liquidation amount of Capital Securities shall have consented to
such waiver or modification to such waiver; and provided further,
that if the consent of the Holder of each of the Outstanding
Securities is required, such waiver shall not be effective until
each holder of the Capital Securities shall have consented to
such waiver. Should the Holders of such Securities fail to waive
such default, the holders of a majority in liquidation amount of
the Capital Securities shall have such right.
Upon any such waiver, such default shall cease to
exist, effective as of the date specified in such waiver (and
effective retroactively to the date of default, if so specified)
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
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.
SECTION 514. Undertaking for Costs.
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, suffered or omitted by it as Trustee, a court may
require any party litigant in such suit to file an undertaking to
pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided, that neither this Section nor the
Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any
suit instituted by the Company or the Trustee or in any suit for
the enforcement of the right to receive the principal of and
interest on any Security.
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SECTION 515. 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 SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall
be as provided by the Trust Indenture Act. Notwithstanding the
foregoing, 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, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. 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 602. Notice of Defaults.
The Trustee shall give the Holders and the Property
Trustee notice of any default hereunder as and to the extent
provided by the Trust Indenture Act; provided, however, that
except in the case of a default in the payment of the principal
of and interest on any Security, 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 determine that the withholding of such notice is in the
interests of the Holders; and provided, further, that in the case
of any default of the character specified in Section 501(3), no
such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section,
(i) the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default and
(ii) the Trustee shall not be deemed to have knowledge of a
default unless a Responsible Officer of the Trustee has actual
knowledge of such default or has received written notice of such
default in the manner contemplated by Section 105.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the 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 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, conclusively rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its choice
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,
debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney
and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation;
(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;
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(h) the rights, privileges, protections, immunities
and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its
capacities hereunder.
SECTION 604. 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, and the Trustee shall not be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 605. Trustee and Other Agents May Hold Securities.
The Trustee, any Paying Agent, any Security 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 608 and 613, may otherwise deal with the
Company with the same rights it would have if it were not
Trustee, Paying Agent, Security Registrar or such other agent.
SECTION 606. 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 607. Compensation; Reimbursement; Indemnity.
The Company, in its capacity as the borrower, agrees:
(1) to pay to the Trustee from time to time such
reasonable compensation as the Company and the Trustee
shall from time to time agree in writing 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);
(2) except as otherwise expressly provided herein, 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 and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful
misconduct; and
(3) to indemnify each of the Trustee and any
predecessor Trustee for, and to hold it harmless against,
any and all loss, damage, claim, liability or expense
incurred without negligence, bad faith or willful
misconduct on its part, arising out of or in connection
with the acceptance or administration of this trust or the
trusts hereunder, including the
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43
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.
The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for
expenses, disbursements and advances and to indemnify and hold
harmless the Trustee shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of
this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior
to the Securities upon all property and money held or collected
by the Trustee as such, except funds held in trust for the
payment of principal of or interest on particular Securities.
Subject to any other rights available to the Trustee
under applicable bankruptcy law, when the Trustee incurs expenses
after the occurrence of any Event of Default specified in Section
501 (4) or (5) hereof, the expenses are intended to constitute
expenses of administration under bankruptcy law.
The provisions of this Section 607 shall survive the
termination of this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000 and has its Corporate Trust
Office in New York, New York. If such Person publishes reports of
condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. 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.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered
to
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44
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.
(c) The Trustee may be removed at any time by Act of
the Holders of a majority in principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608
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
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) 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, (i) the Company pursuant to a Board
Resolution may remove the Trustee, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of
a Security for at least six months may, on behalf of
himself 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, the Company, pursuant to a
Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy,
a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee 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, on behalf of himself and all
others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a
successor Trustee to all Holders in the manner provided in
Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust
Office.
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SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder 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;
provided that, on 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. 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 such rights, powers and trusts.
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 612. Merger, Conversion, Consolidation or Succession
to Business.
Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such
Person 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 with
the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. 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).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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46
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be furnished to
the Trustee (a) semiannually, not later than _________ __ and
____ __ in each year, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders to
the extent the Company has knowledge thereof as of a date not
more than 15 days prior to the delivery thereof, 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, excluding from any such list
names and addresses received by the Trustee in its capacity as
Security Registrar, provided that the Company shall not be
obligated to provide such list at any time such list does not
differ from the most recent list furnished or caused to be
furnished to the Trustee by the Company.
SECTION 702. 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 701, and the names and addresses of Holders
received by the Trustee in its capacity as Security Registrar.
The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and duties of
the Trustee, shall be provided by the Trust Indenture Act.
(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 any disclosure of
information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. 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) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with any
stock exchange upon which the Securities are listed, with the
Commission and with the Company. The Company will notify the
Trustee when the Securities are listed on any stock exchange and
any delisting thereof.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and 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 pursuant to
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47
such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to
Sections 13(a) or 15(d) of the Exchange Act shall be filed with
the Trustee within 15 days after the same is so required to be
filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into
which the Company is merged or the Person that acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be
a corporation, partnership or trust, shall be 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 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;
(2) 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
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance,
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 601, may rely upon such Officers' Certificate and
Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 801.
SECTION 802. Successor Person Substituted.
Upon any consolidation or merger by the Company with
or into any other Person, or any conveyance, transfer or lease by
the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 801, the
successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had
been named as the Company herein; and in the event of any such
conveyance, transfer or lease the
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48
Company shall be discharged from all obligations and covenants
under this Indenture and the Securities and may be dissolved and
liquidated.
Such successor Person 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 Person 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 Person
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 NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company 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:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or
(3) 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 which shall not be inconsistent with the
provisions of this Indenture, provided that such action
pursuant to this clause (3) shall not materially adversely
affect the interests of the Holders or, so long as any of
the Capital Securities shall remain outstanding, the
holders of the Capital Securities; or
(4) to comply with the requirements of the Commission
in order to effect or maintain the qualification of this
Indenture under the Trust Indenture Act.
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49
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Company and
the Trustee, the Company 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 under this Indenture; provided,
however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected
thereby,
(1) except to the extent permitted and subject to the
conditions set forth in Section 301 with respect to the
extension of the Stated Maturity of the Securities, change
the Stated Maturity of, the principal of, or any
installment of interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon,
or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or modify the provisions of
this Indenture with respect to the subordination of the
Securities in a manner adverse to the Holders,
(2) reduce the percentage in principal amount of the
Outstanding Securities, 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 provisions of this Indenture or
certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section,
Section 513 or Section 1008, 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 Outstanding Security affected
thereby;
provided, further, that, so long as any Capital Securities remain
outstanding, no such modification may be made that adversely
affects the holders of the Capital Securities in any material
respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate
liquidation amount of the outstanding Capital Securities and no
amendment that adversely affects the rights of the Capital
Securities holders under Section 508 shall be made without the
prior consent of all of the Capital Securities holders, in each
case unless and until the principal of the Securities and all
accrued and unpaid interest thereon have been paid in full.
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.
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50
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trust
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 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized and permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. 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 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act.
SECTION 906. 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 so modified as to conform, in the opinion of the
Trustee and the Company, 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.
ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 1001. Payment of Principal Interest.
The Company will duly and punctually pay the principal
of and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York an
office or agency where Securities may be presented or surrendered
for registration of transfer or exchange and where
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51
notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and
any change in location, of such office or agency. If at any time
the Company shall fail to maintain any such required 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 (in the United States) where
the Securities may be presented or surrendered for any or all
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 The City of New
York for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of or
interest on any of the Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal and 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 action or
failure so to act.
Whenever the Company shall have one or more Paying
Agents, it will, on or prior to each due date of the principal of
or interest on any Securities, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its
action or failure so to act; provided, however, that any such
deposit on a due date shall be initiated prior to 10:00 a.m. (New
York time) in same-day funds.
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
(i) hold all sums held by it for the payment of the principal or
interest on the 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; (ii) comply
with the provisions of the Trust Indenture Act applicable to it
as a Paying Agent and (iii) during the continuance of any default
by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all
sums held in trust by such Paying Agent as such.
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
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52
the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any moneys deposited with the Trustee or any Paying
Agent, or then held by the Company in trust, for the payment of
the principal of or interest on any Security and remaining
unclaimed for two years after such principal or interest has
become due and payable shall be repaid to the Company on Company
Request, or (if then held by the Company) shall 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 Company as trustee thereof, shall thereupon
cease.
SECTION 1004. Statements by Officers as to Default.
The Company will 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 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 and observance of any of the material terms,
provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have
knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause
to be done all things necessary to preserve and keep in full
force and effect its existence and rights (charter and
statutory); provided, however, that the Company shall not be
required to preserve any such right
if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders and, while any Capital
Securities are outstanding, the holders of the Capital
Securities.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any term, provision or condition set forth in
Sections 1005 to 1007, inclusive, Section 1010 and any covenant
provided pursuant to Section 901(2) for the benefit of the
Holders if before the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding
Securities and at least a majority in aggregate liquidation
preference of Capital Securities shall either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition, but no waiver shall extend to
or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
SECTION 1007. Payment of the Trust's Costs and Expenses.
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53
Because the Trust is being formed solely to facilitate
an investment in the Securities, the Company, in its capacity as
the borrower, hereby assumes and covenants to pay all debts and
obligations (other than with respect to the Capital Securities
and the Common Securities) and all costs and expenses of the
Trust (including, but not limited to, all costs and expenses
relating to the organization of the Trust, the fees and expenses
of the trustees of the Trust and all costs and expenses relating
to the operation of the Trust) and to assume and pay any and all
taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed on the Trust by the
United States, or any other taxing authority, so that the net
amounts received and retained by the Trust and the Property
Trustee after paying such expenses will be equal to the amounts
the Trust and the Property Trustee would have received had no
such costs or expenses been incurred by or imposed on the Trust.
The foregoing obligations of the Company are for the benefit of,
and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (each, a
"Creditor") whether or not such Creditor has received notice
thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company irrevocably
waives any right or remedy to require that any such Creditor take
any action against the Trust or any other Person before
proceeding against the Company. The Company shall execute such
additional agreements as may be necessary or desirable to give
full effect to the foregoing.
SECTION 1008. Limitation on Restricted Payments.
The Company will not, and will not permit any
Subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital
stock, (ii) make any payment of principal or interest, on or
repay or repurchase or redeem any debt securities of the Company
that rank pari passu with or junior in interest to the Securities
or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any Subsidiary
of the Company if such guarantee ranks pari passu with or junior
in interest to the Securities (other than (a) dividends or
distributions in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari
passu with or junior to such stock, (b) payments under the
Guarantee, (c) any declaration of a dividend in connection with
the implementation of a shareholders' rights plan, or the
issuance of rights, stock or other property under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto, (d) as a result of reclassification of the
Company's capital stock into one or more other classes or series
of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for another class
or series of the Company's capital stock, or of any class or
series of the Company's indebtedness for any class or series of
the Company's capital stock, (e) the purchase of fractional
interests in the 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 and (f) repurchases,
redemptions or other acquisitions of common stock related to the
issuance of common stock or rights under any of the Company's
employment contracts, benefit plans or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Company (or securities
<PAGE>
54
convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to
the applicable Extension Period) if at such time (x) there shall
have occurred any event of which the Company has actual knowledge
that (I) with the giving of notice or the lapse of time, or both,
would constitute an Event of Default and (II) in respect of which
the Company shall not have taken reasonable steps to cure, (y)
the Company shall be in default with respect to its payment of
any obligations under the Guarantee or (z) the Company shall have
given notice of its election to begin an Extension Period as
provided in this Indenture and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall
be continuing.
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a
Security, by his or her acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the payment of the principal of and
interest on each and all of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior
payment in full in cash of all Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred.
This Article Eleven shall constitute a continuing
offer to all Persons who 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 made
beneficiaries hereunder and any one or more of them may enforce
such provisions. Holders of Senior Indebtedness need not prove
reliance on the subordination provisions hereof.
SECTION 1102. Default on Senior Indebtedness.
In the event and during the continuation of any
default in the payment of principal or interest or any other
payment due on any Senior Indebtedness, or in the event that any
event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such
Senior Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable (unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled) or in the
event any judicial proceeding shall be pending with respect to
any such default in payment or such event of default, then no
payment shall be made by the Company with respect to the
principal (including redemption payments) of or interest on, the
Securities.
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55
In the event that, notwithstanding the foregoing, any
payment on the Securities shall be received by the Trustee or any
Holder when such payment is prohibited by the preceding paragraph
of this Section 1102, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any
of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days
of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 1103. Prior Payment of Senior Indebtedness Upon
Acceleration of Securities.
In the event of any acceleration of the Stated
Maturity of any Securities, then and in such event the holders of
the Senior Indebtedness outstanding at the time of such
acceleration will first be entitled to receive payment in full of
all amounts due on or in respect of such Senior Indebtedness
(including any amounts due upon acceleration), or provision shall
be made for such payment in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Indebtedness,
before the Holders are entitled to receive or retain any payment
or distribution of any kind or character, whether in cash,
properties or securities, by the Company on account of the
principal of or interest on the Securities or on account of the
purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that holders of Senior
Indebtedness shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by the
subordination provisions of such Senior Indebtedness to pay such
amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Company's
business.
In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such
payment is prohibited by the preceding paragraph of this Section
1103, such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of
such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days
of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 1104. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company, or distribution of assets of
the Company of any kind or character, whether in cash, property
or securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of and interest due or to become
due upon all Senior Indebtedness (including interest after the
commencement of any bankruptcy, insolvency, receivership or other
proceedings at the rate specified in the applicable
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56
Senior Indebtedness, whether or not such interest is an allowable
claim in any such proceeding) shall first be paid in full, or
payment thereof provided for in money in accordance with its
terms, before any payment is made on account of the principal or
interest on the Securities; and upon any such dissolution or
winding-up or liquidation or reorganization any payment by the
Company, or distribution of substantially all of the assets of
the Company of any kind or character, whether in cash, property
or securities, to which the Holders or the Trustee would be
entitled, except for the provisions of this Article Eleven, shall
be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this
Indenture if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay all Senior
Indebtedness in full (including interest after the commencement
of any bankruptcy, insolvency, receivership or other proceedings
at the rate specified in the applicable Senior Indebtedness,
whether or not such interest is an allowable claim in any such
proceeding) or to provide for such payment in money in accordance
with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before
any payment or distribution is made to the Holders or to the
Trustee; provided, however, that such holders of Senior
Indebtedness shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by the
subordination provisions of such Senior Indebtedness to pay such
amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Company's
business.
In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee or the Holders
before all Senior Indebtedness is paid in full (including
interest after commencement of any bankruptcy, insolvency,
receivership or other proceedings at the rate specified in the
applicable Senior Indebtedness, whether or not such interest is
an allowable claim in any such proceeding), or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been
issued, as their respective interests may appear, as calculated
by 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 money in accordance with its
terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Any holder of Senior Indebtedness may file any proof
of claim or similar instrument on behalf of the Trustee and the
Holders if such instrument has not been filed by the date which
is 30 days prior to the date specified for filing thereof.
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57
For purposes of this Article Eleven, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article
Eleven with respect to the Securities to the payment of all
Senior Indebtedness that may at the time be outstanding,
provided, however, that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the
holders of the Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or merger of the Company
into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article
Eight hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section
1104 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Eight hereof. Nothing in Section
1103 or in this Section 1104 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
SECTION 1105. Subrogation.
Subject to the payment of all Senior Indebtedness to
the extent provided in Sections 1103 and 1104 of this Indenture,
the rights of the Holders shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of 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 the 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 Eleven and no payment
over pursuant to the provisions of this Article 11, to or for the
benefit of the holders of Senior Indebtedness by Holders or the
Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the
provisions of this Article Eleven are and are intended solely for
the purposes of defining the relative rights of the Holders, on
the one hand, and the holders of the Senior Indebtedness on the
other hand.
Nothing contained in this Article Eleven or elsewhere
in this Indenture or in the Securities is intended to or shall
impair, as between the Company, its creditors other than the
holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to
the Holders, the principal of and interest 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 and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article
Eleven of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise
of any such remedy.
<PAGE>
58
Upon any payment or distribution of assets of the
Company referred to in this Article Eleven, the Trustee, subject
to the provisions of Section 601, and the Holders, shall be
entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders, for the
purposes 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 Eleven.
SECTION 1106. Trustee to Effect Subordination.
Each Holder of a Security by acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effect the
subordination provided in this Article Eleven and appoints the
Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 1107. 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 Securities pursuant to the
provisions of this Article Eleven. Notwithstanding the provisions
of this Article Eleven or any other provision of this 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 Securities pursuant
to the provisions of this Article Eleven, unless and until a
Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee 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 601,
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 Section 1107 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 interest
on any Security), 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 601,
shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish
that such notice has been given by a holder of 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 Senior Indebtedness to participate in
any payment or distribution pursuant to this Article Eleven, the
Trustee may request such Person to furnish
<PAGE>
59
evidence to the reasonable satisfaction of the Trustee as to the
amount of 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 Eleven, 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.
SECTION 1108. Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Eleven 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 this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article Eleven, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into
this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 601, the
Trustee shall not be liable to any holder of Senior Indebtedness
if it shall pay over or deliver to holders of Securities, the
Company or any other Person money or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this
Article Eleven or otherwise.
Nothing in this Article Eleven shall apply to claims
of or payments to the Trustee under or pursuant to Section 607.
SECTION 1109. Subordination May Not Be Impaired.
No right of any present or future holder 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
that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness may, at
any time and from time to time, without the consent of or notice
to the Trustee or the Holders, without incurring responsibility
to the Holders and without impairing or releasing the
subordination provided in this Article or the obligations
hereunder of the Holders to the holders of Senior Indebtedness,
do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness or otherwise amend or supplement in
any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for
the
<PAGE>
60
collection of Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other
Person.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Optional Redemption; Conditions to Optional
Redemption.
The Securities are redeemable prior to the Stated
Maturity at the option of the Company, on or after ________,
2003, subject to the last paragraph of this Section 1201, in
whole or in part at any time at 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the
Redemption Date.
If a Special Event shall occur and be continuing, the
Company shall have the right, within 90 days of the occurrence of
such Special Event, subject to the last paragraph of this Section
1201, to redeem, upon not less than 30 days nor more than 60 days
notice, the Securities in whole, but not in part, at a Redemption
Price equal to 100% of the principal amount of Securities then
Outstanding plus accrued and unpaid interest thereon, if any, up
to but excluding the Redemption Date. Unless the Company defaults
in payment of the Redemption Price, on or after the Redemption
Date interest will cease to accrue on the Securities or portions
thereof called for redemption.
For so long as the Trust is the Holder of all
Securities Outstanding, the proceeds of any redemption described
in this Section 1201 shall be used by the Trust to redeem Capital
Securities and Common Securities in accordance with their terms.
The Company shall not redeem the Securities in part unless all
accrued and unpaid interest has been paid in full on all
Securities outstanding for all quarterly interest periods
terminating on or prior to the Redemption Date.
SECTION 1202. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by Section 1201, shall be made in accordance with such
provision and this Article.
SECTION 1203. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities
pursuant to Section 1201 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 30 days and no more than
60 days prior to the Redemption Date fixed by the Company, notify
the Trustee of such Redemption Date and of the principal amount
of Securities to be redeemed and provide a copy of the notice of
redemption given to Holders to be redeemed pursuant to Section
1205.
SECTION 1204. Selection by Trustee of Securities to be Redeemed.
<PAGE>
61
If less than all the Securities are to be redeemed,
the particular Securities to be redeemed shall be selected by
lot, at the Trustee's discretion (or such other method of
selection as the Trustee may customarily employ) not more than 60
days prior to the Redemption Date by the Trustee, from the
Outstanding Securities not previously called for redemption.
The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption as aforesaid
and, in case of any Securities selected for partial redemption as
aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall
not apply with respect to any redemption affecting only a single
Security, whether such Security is to be redeemed in whole or in
part. In the case of any such redemption in part, the unredeemed
portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
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 Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
SECTION 1205. Notice of Redemption.
Notice of redemption shall be given by certified or
registered mail, mailed not less than 30 days nor more than 60
days prior to the Redemption Date, to each Holder of Securities
to be redeemed, at his address appearing in the Security
Register.
All notices of redemption shall identify the
Securities to be redeemed (including CUSIP number) and shall
state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security to be
redeemed and that interest thereon will cease to accrue on
and after said date, and
(4) the place or places where such Securities are to
be surrendered for payment of the Redemption Price.
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 request, by the Trustee in the name and at the
expense of the Company. Notice, if mailed in the manner provided
above, 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
<PAGE>
62
Security designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any
other Security.
SECTION 1206. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money sufficient
to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date; provided,
however, that any such deposit on a Redemption Date shall be
initiated prior to 12:00 p.m. (New York time) in same-day funds.
SECTION 1207. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified,
and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon presentation and
surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms
and the provisions of Section 307.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal shall,
until paid, bear interest from the Redemption Date at the rate
borne by the Security.
SECTION 1208. Securities Redeemed in Part.
Any Security which is to be redeemed only in part
shall be surrendered at a place of payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder therefor or
his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so
surrendered.
<PAGE>
63
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed and delivered, all as of the
day and year first above written.
GWL&A FINANCIAL INC.
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:__________________________
Name:
Title:
DRAFT 11/12/98
- -----------------------------------------------------------------
GUARANTEE AGREEMENT
GREAT-WEST LIFE & ANNUITY INSURANCE CAPITAL I
Dated as of , 1998
- -----------------------------------------------------------------
<PAGE>
CROSS REFERENCE TABLE*
Section of
Trust
Indenture Section of
Act of 1939 Guarantee
as amended Agreement
- ---------- ---------
310(a) ................................................4.1(a)
310(b) ................................................4.1(c)
310(c) .............................................Inapplicable
311(a) ................................................2.2(b)
311(b) ................................................2.2(b)
311(c) .............................................Inapplicable
312(a) ................................................2.2(a)
312(b) ................................................2.2(b)
312(c) .................................................2.9
313(a) .................................................2.3
313(b) .................................................2.3
313(c) .................................................2.3
313(d) .................................................2.3
314(a) .................................................2.4
314(b) .............................................Inapplicable
314(c) .................................................2.5
314(d) .............................................Inapplicable
314(e) .................................................2.5
314(f) .............................................Inapplicable
315(a) ............................................3.1(d); 3.2(a)
315(b) ................................................2.7(a)
315(c) ................................................3.1(c)
315(d) ................................................3.1(d)
316(a) .............................................2.6; 5.4(a)
317(a) ..............................................2.10; 5.4
318(a) ................................................2.1(b)
- -------------------
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not have any bearing upon the
interpretation of any of its terms or provisions
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION AND DEFINITIONS ................................1
SECTION 1.1 Interpretation and Definitions ....................1
ARTICLE 2
TRUST INDENTURE ACT ...........................................4
SECTION 2.1 Trust Indenture Act; Application ................4
SECTION 2.2 Lists of Holders ................................4
SECTION 2.3 Reports by Guarantee Trustee ....................5
SECTION 2.4 Periodic Reports to Guarantee Trustee ...........5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent .......................................5
SECTION 2.6 Guarantee Event of Default; Waiver ..............5
SECTION 2.7 Guarantee Event of Default; Notice ..............5
SECTION 2.8 Conflicting Interests ...........................6
SECTION 2.9 Disclosure of Information .......................6
SECTION 2.10 Guarantee Trustee May File Proofs of Claim ......6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE .............................................6
SECTION 3.1 Powers and Duties of Guarantee Trustee ..........6
SECTION 3.2 Certain Rights of Guarantee Trustee .............8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Guarantee ...................................10
ARTICLE 4
GUARANTEE TRUSTEE ............................................10
SECTION 4.1 Guarantee Trustee; Eligibility .................10
SECTION 4.2 Appointment, Removal and Resignation
of Guarantee Trustee ...........................11
-i-
<PAGE>
Page
ARTICLE 5
GUARANTEE ....................................................11
SECTION 5.1 Guarantee ......................................11
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 ...........................13
SECTION 5.6 Subrogation ....................................14
SECTION 5.7 Independent Obligations ........................14
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION ....................14
SECTION 6.1 Limitation of Transactions .....................14
SECTION 6.2 Ranking ........................................15
SECTION 6.3 Pari Passu Guarantees ..........................15
ARTICLE 7
TERMINATION ..................................................15
SECTION 7.1 Termination ....................................15
ARTICLE 8
INDEMNIFICATION ..............................................16
SECTION 8.1 Exculpation ....................................16
SECTION 8.2 Indemnification ................................16
ARTICLE 9
MISCELLANEOUS ................................................16
SECTION 9.1 Successors and Assigns .........................16
SECTION 9.2 Amendments .....................................17
SECTION 9.3 Notices ........................................17
SECTION 9.4 Benefit ........................................18
SECTION 9.5 Governing Law ..................................18
-ii-
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as
of [ ], 1998, is executed and delivered by GWL&A Financial Inc.,
a Delaware corporation (the "Guarantor"), and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) of the Securities (as defined
herein) of Great-West Life & Annuity Insurance Capital I, a
Delaware statutory business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, pursuant to the Declaration (as defined
herein), the Trust is issuing on the date hereof $[ ] aggregate
liquidation amount of capital securities, having a liquidation
amount of $25 each, designated the [ ]% Capital Securities (the
"Capital Securities") and $[ ] aggregate liquidation amount of
common securities, having a liquidation amount of $25 each,
designated the [ ]% Common Securities (the "Common Securities";
together with the Capital Securities, the "Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Guarantee, to pay to
the Holders of the Securities 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, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this 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 Guarantee has the
same meaning throughout;
(c) all references to "the Guarantee" or "this
Guarantee" are to this Guarantee as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee to Articles and
Sections are to Articles and Sections of this Guarantee,
unless otherwise specified;
<PAGE>
2
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee, unless otherwise
defined in this Guarantee or unless the context otherwise
requires;
(f) a term defined in the Declaration or the Indenture
has the same meaning when used in this Guarantee, unless
otherwise defined in this Guarantee or unless the context
otherwise requires; and
(g) 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.
"Business Day" has the meaning given to such term in
the Indenture.
"Corporate Trust Office" means the office of the
Guarantee Trustee at which the corporate trust business of the
Guarantee Trustee shall at any particular time be principally
administered, which office at the date of execution of this
Guarantee is located 101 Barclay Street, New York, New York
10286; telecopy no. (212) [insert fax].
"Covered Person" means any Holder or beneficial owner
of the Securities.
"Debentures" means the % Junior Subordinated
Debentures due 2028 to be issued by the Guarantor, and to be held
by the Property Trustee (as defined in the Declaration) of the
Trust.
"Declaration" means the Amended and Restated
Declaration of Trust, dated as of , 1998, as amended,
modified or supplemented from time to time, among the trustees of
the Trust named therein, the Guarantor, as sponsor, and the
Holders from time to time of undivided beneficial ownership
interests in the assets of the Trust.
"Guarantee Event of Default" means a default by the
Guarantor on any of its payment or other obligations under this
Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by or on behalf of the
Trust: (i) any accumulated and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such
Securities to the extent the Trust shall have funds available
therefor at the time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption, with
respect to any Securities called for redemption by the Trust to
the extent the Trust shall have funds available therefor at the
time, and (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange
for Securities as provided in the Declaration), the lesser of (a)
the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Securities to the date of payment, to
the extent the Trust has funds on hand legally available
therefor, and (b) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust
(in either case, the "Liquidation Distribution"). If a Trust
Enforcement
<PAGE>
3
Event (as defined in the Declaration) has occurred and is
continuing, the rights of Holders of the Common Securities to
receive Guarantee Payments under this Guarantee are subordinated
to the rights of Holders of the Capital Securities to receive
payments hereunder.
"Guarantee Trustee" means The Bank of New York, until
a successor Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder of the Securities, as
registered on the books and records of the Trust; provided,
however, that, in determining whether the holders of the
requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor or any
other obligor on the Capital Securities; and provided further,
that in determining whether the holders of the requisite
liquidation amount of Capital Securities have voted on any matter
provided for in this Guarantee, then for the purpose of such
determination only (and not for any other purpose hereunder), if
the Capital Securities remain in the form of one or more Global
Certificates (as defined in the Declaration), the term "Holders"
shall mean the holder of the Global Certificate acting at the
direction of the Capital Security Beneficial Owners (as defined
in the Declaration).
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of ,
1998, between the Guarantor and The Bank of New York, as trustee
(the "Debenture Trustee"), and any indenture supplemental thereto
pursuant to which the Debentures are to be issued to the Property
Trustee (as defined in the Declaration) of the Trust.
"Majority in Liquidation Amount of the Securities"
means Holder(s) of outstanding Securities, voting as a single
class, who are the Holders of more than 50% of the
aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities.
In determining whether the Holders of the requisite amount of
Securities have voted, Securities which are owned by the
Guarantor or any Affiliate of the Guarantor or any other obligor
on the Securities shall be disregarded for the purpose of any
such determination.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by two Authorized Officers (as
defined in the Declaration) of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definitions relating thereto;
<PAGE>
4
(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.
"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.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee with direct responsibility for the
administration of this Guarantee 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.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. This
Guarantee is subject to the provisions of the Trust Indenture Act
that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this
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. (a) The Guarantor shall
provide or shall cause the Trust to provide the Guarantee Trustee
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders"), (i) semi-annually, not later than
_______ and _______ of each year, and (ii) at such other times as
the Guarantee Trustee may request in writing, within 30 days of
receipt by the Guarantor of a written request from the Guarantee
Trustee for a List of Holders as of a date no
<PAGE>
5
more than 15 days before such List of Holders is given to the
Guarantee Trustee, in each case to the extent such information is
in the possession or control of the Guarantor and has not
otherwise been received by the Guarantee Trustee in its capacity
as such. The Guarantee Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in
Lists of Holders given to it, provided that it may destroy any
List of Holders previously given to it on receipt of a new List
of Holders.
(b) The 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 Guarantee Trustee. Within 60
days after May 15 of each year (commencing with the year of the
first anniversary of the issuance of the Securities), the
Guarantee Trustee shall provide to the Holders of the Securities
such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents,
reports and information, if any, as required by Section 314 of
the Trust Indenture Act 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, provided that such compliance certificate shall be
delivered on or before 120 days after the end of each calendar
year of the Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Guarantee 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 Guarantee Event of Default; Waiver. The
Holders of a Majority in Liquidation Amount of the Securities
may, by vote, on behalf of the Holders of all of the Securities,
waive any past default or Guarantee Event of Default and its
consequences. Upon such waiver, any such default or Guarantee
Event of Default shall cease to exist, and any default or
Guarantee Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or
Guarantee Event of Default or impair any right consequent
thereon.
SECTION 2.7 Guarantee Event of Default; Notice. The
Guarantee Trustee shall, within 90 days after the occurrence of a
Guarantee Event of Default, transmit by certified or registered
mail to the Holders, notices of all Guarantee Events of Default
actually known to a Responsible Officer of the Guarantee Trustee,
unless such defaults have been cured before the giving of such
notice; provided, except in the case of a default in the payment
of a Guarantee Payment, that the Guarantee Trustee shall be
protected in withholding such notice if and so long
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6
as a Responsible Officer of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Guarantee
Trustee shall have received written notice thereof or a
Responsible Officer of the Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual
knowledge thereof.
SECTION 2.8 Conflicting Interests. The Declaration
shall be deemed to be specifically described in this Guarantee
for the purposes of clause (i) of the first provision contained
in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure
of information as to the names and addresses of the Holders of
the Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of
any existing law, or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under Section
312(b) of the Trust Indenture Act.
SECTION 2.10 Guarantee Trustee May File Proofs of
Claim. Upon the occurrence of a Guarantee Event of Default, the
Guarantee Trustee is hereby authorized to (a) recover judgment,
in its own name and as trustee of an express trust, against the
Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have its claims and those of the Holders of the Securities
allowed in any judicial proceedings relative to the Guarantor,
its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee
Trustee on behalf of the Trust for the benefit of the Holders,
and the Guarantee Trustee shall not transfer this Guarantee to
any Person except to a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment
to act in such capacity. The right, title and interest of the
Guarantee Trustee in and to this Guarantee shall automatically
vest in any Successor Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
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7
(b) If a Guarantee Event of Default actually known to
a Responsible Officer of the Guarantee Trustee has occurred and
is continuing, the Guarantee Trustee shall enforce this Guarantee
for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of
any Guarantee Event of Default and after the curing of all
Guarantee Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read
into this Guarantee against the Guarantee Trustee. In case a
Guarantee 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 Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in it
by this 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.
No provision of this Guarantee shall be construed to
relieve the 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 Guarantee
Event of Default and after the curing or waiving of
all such Guarantee Events of Default that may have
occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as
are specifically set forth in this Guarantee, and
no implied covenants or obligations shall be read
into this Guarantee against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the 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 Guarantee Trustee and
conforming to the requirements of this Guarantee;
but in the case of any such certificates or
opinions that by any provision hereof are
specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements
of this Guarantee;
(ii) the Guarantee Trustee shall not be
liable for any error of judgment made in good faith by
a Responsible Officer of the Guarantee Trustee, unless
it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the 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 Securities
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8
relating to the time, method and place of conducting
any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this
Guarantee; and
(iv) subject to Section 3.1(b), no provision
of this Guarantee shall require the 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 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 Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee,
against such risk or liability is not reasonably
assured to it.
SECTION 3.2 Certain Rights of Guarantee
Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The 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 reasonably 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 Guarantee shall be sufficiently
evidenced by an Officers' Certificate unless otherwise
prescribed herein.
(iii) Whenever, in the administration of
this Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established
before taking, suffering or omitting any action
hereunder, the 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 from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no
duty to see to any recording, filing or registration
or any instrument (or any rerecording, refiling or
re-registration thereof).
(v) The Guarantee Trustee may consult with
legal counsel, and the written advice or opinion of
such legal 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 legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee
Trustee
<PAGE>
9
shall have the right at any time to seek instructions
concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Guarantee
Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
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
Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of a Guarantee
Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee.
(vii) The 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 Guarantee Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(viii) The 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.
(ix) Any action taken by the Guarantee
Trustee or its agents hereunder shall bind the Holders
of the Securities, and the signature of the 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 Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this
Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (i) may
request instructions from the Holders of a Majority in
Liquidation Amount of the 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 Guarantee shall be deemed to
impose any duty or obligation on the 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 Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable
<PAGE>
10
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 Guarantee Trustee shall be construed
to be a duty to act in accordance with such power and authority.
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 Guarantee
Trustee does not assume any responsibility for their correctness.
The Guarantee Trustee makes no representations as to the validity
or sufficiency of this Guarantee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall be at all times a 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, 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 Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the 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
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor.
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11
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall
hold such office until a Successor Guarantee Trustee shall have
been appointed. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take
effect until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor 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 Guarantee Trustee may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Guarantee Trustee all amounts
owing to the Guarantee Trustee for fees and reimbursement of
expenses which have accrued to the date of such termination,
removal or resignation.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees
to pay in full, on a subordinated basis, to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or
assert, other than the defense of payment. 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 Trust to pay such amounts to such Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of
this 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 Trust or any other Person before
proceeding against the Guarantor,
<PAGE>
12
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 Guarantee shall be absolute and
unconditional and shall remain in full force and effect until the
entire liquidation amount of all outstanding Securities shall
have been paid and such obligation shall in no way be affected or
impaired by reason of the happening from time to time of any
event, including without limitation, the following, whether or
not with notice to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or
otherwise, of the performance or observance by the Trust of
any express or implied agreement, covenant, term or
condition relating to the Securities to be performed or
observed by the Trust;
(b) The extension of time for the payment by the Trust
of all or any portion of the Distributions, Redemption
Price (as defined in the Indenture), Liquidation
Distribution or any other sums payable under the terms of
the Securities or the extension of time for the performance
of any other obligation under, arising out of, or in
connection with the Securities (other than an extension of
time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the
Debentures or any change to the maturity date of the
Debentures permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence
on the part of the Property Trustee or the Holders to
enforce, assert or exercise any right, privilege, power or
remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Securities, or any action on
the part of the Trust 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 Trust or any of the assets of the Trust;
(e) Any invalidity of, or defect or deficiency in, the
Securities;
(f) The settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) Any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor (other than payment of the
underlying obligation), 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.
<PAGE>
13
There shall be no obligation of the Guarantee Trustee
or the Holders to give notice to, or obtain consent of the
Guarantor or any other Person with respect to the happening of
any of the foregoing.
No setoff, counterclaim, reduction or diminution of
any obligation, or any defense of any kind or nature that the
Guarantor has or may have against any Holder shall be available
hereunder to the Guarantor against such Holder to reduce the
payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
(a) The Holders of not less than a Majority in
Liquidation Amount of the Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this
Guarantee or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this
Guarantee, then any Holder may, subject to the subordination
provisions of Section 6.2, institute a legal proceeding directly
against the Guarantor to enforce the Guarantee Trustee's rights
under this Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a Holder may, subject to the
subordination provisions of Section 6.2, directly institute a
proceeding against the Guarantor for enforcement of the Guarantee
for such payment to the Holder of the principal of or interest on
the Debentures on or after the respective due dates specified in
the Debentures, and the amount of the payment will be based on
the Holder's pro rata share of the amount due and owing on all of
the Securities. The Guarantor hereby waives any right or remedy
to require that any action on this Guarantee be brought first
against the Trust or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not
of collection. This Guarantee will not be discharged except by
payment of the Guarantee Payments in full (without duplication of
amounts theretofore paid by the Trust) or upon distribution of
Debentures to Holders as provided in the Declaration.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Trust in respect of any amounts
paid to such Holders by the Guarantor under this 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 Guarantee, if at
the time of any such payment any amounts are due and unpaid under
this 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 Guarantee Trustee for the benefit of the Holders.
<PAGE>
14
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Trust with
respect to the Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through
5.3(g), inclusive, hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Securities remain outstanding, if there
shall have occurred a Guarantee Event of Default or a Trust
Enforcement Event (as defined in the Declaration), then the
Guarantor shall not, and shall not permit any subsidiary of the
Guarantor, to (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, the Guarantor's capital stock, (ii) make any
payment of principal, interest or premium, if any, on, or repay,
repurchase or redeem, any debt securities that rank pari passu
with or junior to the Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Guarantor of the
debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior to the Debentures
(other than (a) dividends or distributions in the form of stock,
warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other
rights is the same stock as that on which the dividend is being
paid or ranks pari passu with or junior to such stock, (b)
payments under this Guarantee, (c) any declaration of a dividend
in connection with the implementation of a shareholders' rights
plan, or the issuance of rights, stock or other property under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (d) as a result of
reclassification of the Guarantor's capital stock into one or
more other classes or series of the Guarantor's capital stock or
the exchange or conversion of one class or series of the
Guarantor's capital stock (or any capital stock of a subsidiary
of the Guarantor) for another class or series of the Guarantor's
capital stock, or of any class or series of the Guarantor's
indebtedness for any class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in the shares of
the security being converted or exchanged and (f) repurchases,
redemptions or other acquisitions or common stock related to the
issuance of common stock or rights under any of the Guarantor's
employment contracts, benefit plans or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period).
<PAGE>
15
SECTION 6.2 Ranking.
This Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness (as defined in the Indenture)
of the Guarantor to the extent and in the manner set forth in the
Indenture, except those liabilities of the Guarantor made pari
passu or subordinate to this Guarantee by their terms.
If a Trust Enforcement Event has occurred and is
continuing under the Declaration, the rights of the Holders of
the Common Securities to receive Guarantee Payments hereunder
shall be subordinated to the rights of the Holders of the
Securities to receive payment of all amounts due and owing
hereunder.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.
This Guarantee shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of
all Securities, (ii) the distribution of the Debentures to the
Holders in exchange for all the Securities or (iii) full payment
of the amounts payable in accordance with the Declaration upon
liquidation of the Trust. Notwithstanding the foregoing, this
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 Securities or under this Guarantee.
ARTICLE 8
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 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 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
<PAGE>
16
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.
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each 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 of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the
termination of this Guarantee and the resignation or removal of
the Guarantee Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this
Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Securities then outstanding. Except
in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture
and pursuant to which the successor or assignee agrees in writing
to perform the Guarantor's obligations hereunder, the Guarantor
shall not assign its obligations hereunder.
SECTION 9.2 Amendments.
Except with respect to any changes that do not
materially and adversely affect the rights of the Holders (in
which case no consent of the Holders will be required), this
Guarantee may not be amended without the prior approval of the
Holders of not less than a Majority in Liquidation Amount of the
Securities. The provisions of Section 11.2 of the Declaration
with respect to meetings of, and action by written consent of,
the Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices.
All notices provided for in this Guarantee 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:
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17
(a) If given to the Guarantee Trustee, at the
Guarantee Trustee's mailing address set forth below (or
such other address as the Guarantee Trustee may give notice
of to the Guarantor and the Holders):
The Bank of New York
101 Barclay Street
New York, New York 10286
[insert phone]
Att:
(b) If given to the Guarantor, at the Guarantor's
mailing addresses set forth below (or such other address as
the Guarantor may give notice of to the Guarantee Trustee
and the Holders):
GWL&A Financial Inc.
8515 East Orchard Road
Englewood, Colorado 80111
303-689-3000
Att:
(c) If given to any 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 certified or registered mail, 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. No notice to
or demand on any party hereto in any case shall, unless otherwise
required under this Guarantee, entitle such party to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any party hereto to any
other or further action in any circumstances without notice or
demand. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed by
facsimile or telecommunication transmission, when received unless
received outside of business hours, in which case on the next
open of business on a Business Day.
SECTION 9.4 Benefit.
This Guarantee is solely for the benefit of the
Holders of the Securities and, subject to Section 3.1(a), is not
separately transferable from the Securities.
SECTION 9.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
<PAGE>
18
IN WITNESS WHEREOF, this Guarantee is executed as of
the day and year first above written.
GWL&A FINANCIAL INC.,
as Guarantor
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Guarantee Trustee
By:____________________________
Name:
Title:
Exhibit 5.1
[Letterhead of Richards, Layton & Finger, P.A.]
November 13, 1998
Great-West Life & Annuity Insurance Capital I
c/o GWL&A Financial Inc.
8515 East Orchard Road
Englewood, Colorado 80111
Re: Great-West Life & Annuity Insurance Capital I
---------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for GWL&A
Financial Inc., a Delaware corporation (the "Company"), and
Great-West Life & Annuity Insurance Capital I, a Delaware
business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Trust of the Trust, dated as of
September 25, 1998 (the "Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on September 28, 1998;
(b) The Declaration of Trust, dated as of September
28, 1998, among the Company, as sponsor, Mitchell T.G. Graye, as
regular trustee, The Bank of New York, as property trustee, and
The Bank of New York (Delaware), as Delaware trustee;
(c) The Registration Statement (the "Initial
Registration Statement") on Form S-3, as filed by the Company,
the Trust and others as set forth therein with the Securities and
Exchange Commission (the "SEC") on September 28, 1998, as amended
by Pre-Effective Amendment No. 1 to the Initial Registration
Statement, as filed by the Company, the Trust and others as set
forth therein with the SEC on November 5, 1998 ("Amendment No.
1"), as amended by Pre-Effective Amendment No. 2 to the Initial
Registration Statement, as proposed to
<PAGE>
Great-West Life & Annuity Insurance Capital I
November 13, 1998
Page 2
be filed by the Company, the Trust and others as set forth
therein with the SEC on or about November 13, 1998 ("Amendment
No. 2"), including a preliminary prospectus (the "Prospectus"),
relating to the Subordinated Income Capital Securities of the
Trust representing undivided beneficial interests in the assets
of the Trust (each, a "Capital Security" and collectively, the
"Capital Securities") (the Initial Registration Statement, as
amended by Amendment No. 1 and Amendment No. 2 is hereinafter
referred to as the "Registration Statement");
(d) A form of Amended and Restated Declaration of
Trust, to be entered into among the Company, as sponsor, the
trustees of the Trust named therein, and the holders, from time
to time, of undivided beneficial interests in the Trust
(including Exhibits A and B thereto) (the "Declaration"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust,
dated November 13, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have
assumed that there exists no provision in any document that we
have not reviewed that bears upon or is inconsistent with the
opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that
the Declaration constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the Trust, and that the Declaration and the Certificate are in
full force and effect and have not been amended, (ii) except to
the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents
examined by us under the laws of the jurisdiction governing its
creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has
the power and
<PAGE>
Great-West Life & Annuity Insurance Capital I
November 13, 1998
Page 3
authority to execute and deliver, and to perform its obligations
under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us,
(vi) the receipt by each Person to whom a Capital Security is to
be issued by the Trust (collectively, the "Capital Security
Holders") of a certificate evidencing the Capital Security and
the payment for the Capital Security acquired by it, in
accordance with the Declaration and the Registration Statement,
and (vii) that the Capital Securities are issued and sold to the
Capital Security Holders in accordance with the Declaration and
the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities and blue sky laws of the State
of Delaware), and we have not considered and express no opinion
on the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, 12 Del. C. ss. 3801, et seq.
2. The Capital Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below,
fully paid and nonassessable undivided beneficial interests in
the assets of the Trust.
3. The Capital Security Holders, 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. We note that the Capital Security Holders may be
obligated to make payments as set forth in the Declaration.
<PAGE>
Great-West Life & Annuity Insurance Capital I
November 13, 1998
Page 4
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. In addition, we hereby consent to the use
of our name under the heading "Legal Matters" in the Prospectus.
In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for
any purpose.
Very truly yours,
/s/ Richards, Layton & Finger PA
Exhibit 5.2
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2552
November 13, 1998
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc.
c/o GWL&A Financial Inc.
8515 East Orchard
Englewood, Colorado 80111
Ladies and Gentlemen:
We have acted as special counsel to Great-West Life &
Annuity Insurance Capital I, a Delaware business trust (the
"Trust"), and GWL&A Financial Inc., a Delaware corporation (the
"Company"), in connection with the registration by the Trust and
the Company under the Securities Act of 1933, as amended (the
"Securities Act"), of (i) the Trust's Subordinated Capital Income
Securities (liquidation amount of $25 per security) (the "Capital
Securities"), (ii) the Company's __% Junior Subordinated
Debentures due 2028 (the "Debentures") and (iii) the guarantee of
the Capital Securities by the Company for the benefit of the
holders from time to time of the Capital Securities (the
"Guarantee"). The Capital Securities will be issued under an
amended and restated declaration of trust of the Trust among the
Company and the trustees named therein (the "Amended and Restated
Declaration of Trust"). The Debentures will be issued under an
indenture between the Company and the trustee named therein (the
"Indenture"). The Guarantee will be issued under a guarantee
agreement between the Company and the trustee named therein (the
"Guarantee Agreement"). The Capital Securities, the Debentures
and the Guarantee are being registered by the Trust and the
Company pursuant to a Registration
<PAGE>
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc., p. 2
Statement on Form S-3 (Nos. 333-64473 and 333-64473-01) (the
"Registration Statement") filed with the Securities and Exchange
Commission (the "Commission") on September 28, 1998, as amended
by Amendment No. 1 to the Registration Statement, filed with the
Commission on November 5, 1998, and by Amendment No. 2 to the
Registration Agreement, filed with the Commission on the date of
this opinion.
In arriving at the opinions expressed below, we have
reviewed the following documents:
(a) the Registration Statement, the related
Prospectus and the documents incorporated by
reference therein;
(b a form of the Amended and Restated Declaration of
Trust, filed as an exhibit to the Registration
Statement;
(c) a form of the Indenture, filed as an exhibit to
the Registration Statement; and
(d) a form of the Guarantee Agreement, filed as an
exhibit to the Registration Statement.
In addition, we have reviewed the originals or copies certified
or otherwise identified to our satisfaction of all such corporate
records of the Company and the Trust and such other instruments
and other certificates of public officials, officers and
representatives of the Company and the Trust and such other
persons, and we have made such investigations of law, as we have
deemed appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have
assumed the authenticity of all documents submitted to us as
originals and the conformity to the originals of all documents
submitted to us as copies. In addition, we have assumed and have
not verified (i) the accuracy as to factual matters of each
document we have reviewed, (ii) that the Amended and Restated
Declaration of Trust and the Capital Securities will conform to
the form thereof that we have reviewed and that the Capital
Securities will be duly authenticated in accordance with the
terms of the Amended and Restated Declaration of Trust, (iii)
that the Indenture and the Debentures will conform to the form
thereof that we have reviewed and that the Debentures will be
duly authenticated in accordance with the terms of the Indenture,
and (iv) that the Guarantee Agreement will conform to the form
thereof that we have reviewed.
Based on the foregoing, and subject to the further
assumptions and qualifications set forth below, it is our opinion
that:
1. With respect to the Debentures, when (a) the
Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), (b) the
<PAGE>
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc., p. 3
Board of Directors of the Company (the "Board") has taken all
necessary corporate action to approve the issuance of and
establish the terms of such Debentures, the offering thereof and
related matters, (c) the Indenture has been duly executed and
delivered, (d) the Debentures have been duly executed and
delivered by the Company in the manner provided for in the
Indenture, and (e) the Debentures have been issued, sold and
delivered in the manner and at such prices as approved by the
Board, upon payment of the consideration provided for therein,
the Debentures to be issued under the Indenture will (assuming
the Debentures so issuable are still validly authorized as of the
issue date) be the valid, binding and enforceable obligations of
the Company, entitled to the benefits of the Indenture.
2. With respect to the Guarantee, when (a) the
Guarantee Agreement has been duly qualified under the Trust
Indenture Act, (b) the Board has taken all necessary corporate
action to approve the issuance of and establish the terms of such
Guarantee, the offering thereof and related matters, (c) the
Guarantee Agreement has been duly executed and delivered, (d) the
Amended and Restated Declaration of Trust has been duly executed
and delivered, and (e) the Capital Securities have been issued,
sold and delivered in the manner and at such prices as approved
by the Trust, upon payment of the consideration provided for
therein, the Guarantee will (assuming the Guarantee is still
validly authorized as of the issue date) be a valid, binding and
enforceable obligation of the Company, entitled to the benefits
of the Guarantee Agreement.
In connection with our opinions expressed above, we
have assumed that (i) the Registration Statement and any
amendments thereto (including post-effective amendments) will
have become effective and will comply with all applicable laws at
the time the Capital Securities, the Debentures and the Guarantee
are offered or issued as contemplated by the Registration
Statement; (ii) the terms of the Capital Securities and of their
issuance and sale will have been duly established in conformity
with the Amended and Restated Declaration so as not to violate
any applicable law and so as to comply with any requirement or
restriction imposed by any court or government body having
jurisdiction over the Trust; (iii) the terms of the Debentures
and of their issuance and sale will have been duly established in
conformity with the Indenture so as not to violate any applicable
law and so as to comply with any requirement or restriction
imposed by any court or government body having jurisdiction over
the Company; and (iv) the Capital Securities will be issued and
sold in compliance with applicable federal and state laws and in
the manner stated in the Registration Statement and the
Prospectus.
Insofar as the foregoing opinion relates to the
validity, binding effect or enforceability of any agreement or
obligation of the Company, (a) we have assumed that each other
party to such agreement or obligation will satisfy those legal
requirements that are applicable to it to the extent necessary to
make such agreement or obligation enforceable against it, and (b)
such opinion is subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general
principles of equity.
<PAGE>
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc., p. 4
The foregoing opinion is limited to the federal law of
the United States of America, the law of the State of New York
and the General Corporation Law of the State of Delaware. In
particular, we express no opinion as to the Capital Securities,
as to which we understand that you are relying on the opinion of
Richards, Layton & Finger, special Delaware counsel to the
Company and the Trust.
We are furnishing this letter to you solely for your
benefit in connection with the offering of the Capital
Securities. This letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to our
name under the heading "Legal Matters" in the Prospectus included
in the Registration Statement. By giving such consent, we do not
thereby admit that we are experts with respect to any part of the
Registration Statement, including this exhibit, within the
meaning of the term "expert" as used in the Securities Act or the
rules and regulations of the Commission issued thereunder.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ David W. Hirsch
--------------------------------
David W. Hirsch, a Partner
Exhibit 8.1
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2980
November 13, 1998
Great West Life & Annuity Insurance Capital I
GWL&A Financial Inc.
c/o GWL&A Financial Inc.
8515 East Orchard Road
Englewood, Colorado 80111
Ladies and Gentlemen:
We have acted as special counsel to Great-West Life &
Annuity Insurance Capital I, a Delaware business trust (the
"Trust"), and GWL&A Financial Inc., a Delaware corporation (the
"Company"), in connection with the registration by the Trust and
the Company under the Securities Act of 1933, as amended (the
"Securities Act"), of (i) the Trust's Subordinated Capital Income
Securities (liquidation amount of $25 per security) (the "Capital
Securities"), (ii) the Company's __% Junior Subordinated
Debentures due 2028 (the "Debentures") and (iii) the guarantee of
the Capital Securities by the Company for the benefit of the
holders from time to time of the Capital Securities (the
"Guarantee"). The Capital Securities will be issued under an
amended and restated declaration of trust of the Trust among the
Company and the trustees named therein (the "Amended and Restated
Declaration of Trust"). The Debentures will be issued under an
indenture between the Company and the trustee named therein (the
"Indenture"). The Guarantee will be issued under a guarantee
agreement between the Company and the trustee named therein (the
"Guarantee Agreement"). The Capital Securities, the Debentures
and the Guarantee are being registered by the Trust and the
Company pursuant to a Registration Statement on Form S-3 (Nos.
333-64473 and 333-64473-01) (the "Registration Statement") filed
with the Securities and Exchange Commission (the
<PAGE>
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc., p. 2
"Commission") on September 28, 1998, as amended by Amendment No.
1 to the Registration Statement, filed with the Commission on
November 5, 1998, and by Amendment No. 2 to the Registration
Agreement, filed with the Commission on the date of this opinion.
In arriving at the opinions expressed below, we have
examined an executed copy of the Registration Statement dated the
date hereof, which you have provided us, as well as the forms of
(i) the Amended and Restated Declaration of Trust, (ii) the
Indenture and (iii) the Guarantee Agreement, each of which is
filed as an exhibit to the Registration Statement. We have also
examined such other documents relating to the issuance of the
Debentures, the Capital Securities and the Guarantee described in
the prospectus which form a part of the Registration Statement
(the Amended and Restated Declaration of Trust, the Indenture,
the Guarantee Agreement and such other documents being referred
to herein as the "Operative Documents"). In addition, we have
made such investigations of law as we have deemed appropriate as
a basis for the opinion expressed below.
In rendering the opinions expressed below, we have
assumed the authenticity of all documents submitted to us as
originals and the conformity to the originals of all documents
submitted to us as copies. In addition, we have assumed and have
not verified (i) the accuracy as to factual matters of each
document we have reviewed, (ii) that the Amended and Restated
Declaration of Trust and the Capital Securities will conform to
the form thereof that we have reviewed, (iii) that the Indenture
and the Debentures will conform to the form thereof that we have
reviewed, and (iv) that the Guarantee Agreement will conform to
the form thereof that we have reviewed.
Based on the foregoing, and subject to the
assumptions, qualifications and conditions set forth herein and
in the discussion set forth in the Registration Statement under
the caption "U.S. Federal Income Tax Consequences," and the
accuracy of certain representations of the Company and the Trust,
it is our opinion that:
1. Under current law and assuming the performance of
the Operative Documents in accordance with the terms described
therein, the Debentures will be treated for United States federal
income tax purposes as indebtedness of the Company.
2. Under current law and assuming the performance of
the Operative Documents in accordance with the terms described
therein, the Trust will be treated for United States federal
income tax purposes as a grantor trust and not as an association
taxable as a corporation.
Our opinion is based on the U.S. Internal Revenue Code
of 1986, as amended, Treasury regulations promulgated thereunder,
and administrative and judicial interpretations thereof, all as
of the date hereof and all of which are subject to change,
possibly on a retroactive basis. In rendering this opinion, we
are expressing our views only as to the federal income tax laws
of the United States of America.
<PAGE>
Great-West Life & Annuity Insurance Capital I
GWL&A Financial Inc., p. 3
We are furnishing this letter to you solely for your
benefit in connection with the offering of the Capital
Securities. This letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to our
name under the heading "U.S. Federal Income Tax Consequences" in
the Prospectus included in the Registration Statement. By giving
such consent, we do not thereby admit that we are experts with
respect to any part of the Registration Statement, including this
exhibit, within the meaning of the term "expert" as used in the
Securities Act or the rules and regulations of the Commission
issued thereunder.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ Erika W. Nijenhuis
---------------------------------
Erika W. Nijenhuis, a Partner
