As filed with the Securities and Exchange Commission on March 11, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or Other Jurisdiction of Incorporation of Organization)
95-1068610
(I.R.S. Employer Identification Number)
114 EAST FIFTH STREET
SANTA ANA, CALIFORNIA 92701-4642
(800) 854-3643
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
MARK R ARNESEN, ESQ. (Copy to)
SECRETARY NEIL W. RUST, ESQ.
THE FIRST AMERICAN FINANCIAL CORPORATION WHITE & CASE LLP
114 EAST FIFTH STREET 633 WEST FIFTH STREET
SANTA ANA, CALIFORNIA 92701 LOS ANGELES, CALIFORNIA 90071
(714) 558-3211 (213) 620-7700
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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
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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( ) Registration No.
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. ( ) Registration No.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ( )
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount Of
Title of Shares To Be Aggregate Price Aggregate Registration
To Be Registered Registered Per Unit Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior Debentures $100,000,000 100%(1) $100,000,000(1) $29,500
===============================================================================================================================
<FN>
(1) ESTIMATED SOLELY FOR PURPOSE OF CALCULATING THE REGISTRATION FEE.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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>
[INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.][RED HERRING TEXT FOR LEFT HAND MARGIN]
SUBJECT TO COMPLETION, DATED MARCH __, 1998.
Prospectus
THE FIRST AMERICAN [Logo of The First American
FINANCIAL CORPORATION Financial Corporation]
$100,000,000
[__]% SENIOR DEBENTURES DUE 2028
The First American Financial Corporation (the "Company") is offering
$100,000,000 aggregate principal amount of its [__]% senior debentures due 2028
(the "Senior Debentures"). Interest on the Senior Debentures is payable on
[__________] and [__________] of each year, commencing [__________], 1998. The
Senior Debentures will mature on [__________], 2028 and may be redeemed at the
option of the Company in whole or in part at any time after [__________], 2008
at the redemption prices set forth herein. See "Description of the Senior
Debentures."
The Senior Debentures are general unsecured obligations of the Company and rank
senior in right of payment to all existing or future indebtedness of the Company
that is by its terms expressly subordinated in right of payment to the Senior
Debentures and will rank on parity in right of payment with all other existing
or future indebtedness of the Company. The Senior Debentures will be effectively
subordinated to all existing and future liabilities and obligations of the
Company's subsidiaries and holders of the Senior Debentures should look only to
the assets of the Company for payments on the Senior Debentures. As of December
31, 1997, the Company's subsidiaries had liabilities and obligations of
approximately $642.1 million net of intercompany indebtedness. See "The First
American Financial Corporation."
The Senior Debentures will initially be represented by a global security (a
"Global Security") registered in the name of The Depository Trust Company ("DTC"
or the "Depositary") or its nominee. Beneficial interests in the Global Security
will be shown on, and transfers thereof will be effected only through, records
maintained by DTC (with respect to participants' interests) and its
participants.
Except as described herein, Senior Debentures in definitive form will not be
issued. Beneficial interests in the Senior Debentures may be purchased in
denominations of $1,000 or any integral multiple thereof. Payments of the
principal, premium if any, and interest on the Senior Debentures will be made
directly to DTC for subsequent disbursement to DTC participants, who are to
remit such payments to the beneficial owners of the Senior Debentures. See
"Description of the Senior Debentures--Book Entry System."
Initial settlement for the Senior Debentures will be made in immediately
available funds. The Senior Debentures will trade in DTC's Same-Day Funds
Settlement System, and secondary market trading activity in the Senior
Debentures will therefore settle in immediately available funds.
The Company does not intend to apply for listing of the Senior Debentures on any
securities exchange or authorization for quotation on the National Association
of Securities Dealers Inc. Automated Quotation System. No assurance can be given
as to whether an active trading market will develop for the Senior Debentures.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNTS(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Senior Debenture .......... [_____]% [_____]% [_____]%
Total.......................... $100,000,000 $[__________] $[__________]
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Plus accrued interest, if any, from [__________], 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(3) Before deducting expenses payable by the Company, estimated at $186,500.
</FN>
</TABLE>
The Senior Debentures are being offered by the Underwriters (as such term is
defined herein, see "Underwriting"), subject to prior sale, when, as and if
issued by the Company and delivered and accepted by the Underwriters and subject
to certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offers and to reject orders in whole or in part. It is
expected that delivery of the Senior Debentures will be made in book-entry form
through the facilities of the Depositary on or about [__________], 1998.
CHASE SECURITIES INC. FIRST CHICAGO CAPITAL MARKETS, INC.
THE DATE OF THIS PROSPECTUS IS [_____], 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SENIOR DEBENTURES,
INCLUDING OVERALLOTMENT, STABILIZING TRANSACTIONS AND SYNDICATE SHORT COVERING
TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549; and at the following Regional Offices of the Commission: New York
Regional Office, Seven World Trade Center, 13th Floor, Suite 1300, New York, New
York 10048; and Chicago Regional Office, Citicorp Center, 500 West Madison
Street, 14th Floor, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. The Commission also maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding the Company. In addition, such reports, proxy statements
and other information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, on which the Common
shares, $1.00 par value, of the Company are listed.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act. In accordance with the rules and regulations of the
Commission, this Prospectus does not contain all of the information contained in
the Registration Statement and the exhibits and schedules thereto. For further
information concerning the Company and the Senior Debentures offered hereby,
reference is hereby made to the Registration Statement and the exhibits and
schedules filed therewith which may be obtained at the Commission's offices
whose addresses are listed above. The Registration Statement has been filed
electronically and may be obtained at the Commission's Web site listed above.
Any statements contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (1), (2), (3), (4), (5), (6) and (7) below are
incorporated by reference in this Prospectus, and all documents filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained herein, or in
a document all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(5) The Company's Report on Form 8-K dated November 7, 1997;
(6) The Company's Report on Form 8-K dated January 23, 1998; and
(7) The Company's Report on Form 8-K dated January 27, 1998.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
MARK R ARNESEN, VICE PRESIDENT AND SECRETARY, THE FIRST AMERICAN FINANCIAL
CORPORATION, 114 EAST FIFTH STREET, SANTA ANA, CALIFORNIA 92701-4642, TELEPHONE
NUMBER: (714) 558-3211. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY [__________], 1998.
FORWARD-LOOKING STATEMENTS
Except for historical information contained in this Prospectus and in the
documents incorporated in this Prospectus by reference, the matters discussed
herein and therein contain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
suggested in the forward-looking statements, including, without limitation, the
effect of economic conditions, interest rates, market demand, competition and
other risks detailed herein and in the Company's other filings with the
Commission.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in or incorporated by
reference in this Prospectus, which should be read in its entirety. See "Risk
Factors" for a description of certain factors that should be considered in
connection with an investment in the Senior Debentures.
THE COMPANY
The First American Financial Corporation (the "Company") was organized in
1894 as Orange County Title Company, succeeding to the business of two title
abstract companies founded in 1889 and operating in Southern California. In
1924, the Company commenced issuing title insurance policies. In 1986, the
Company began a diversification program by acquiring and developing financial
service businesses closely related to the real estate transfer and closing
process. The Company is a California corporation with executive offices located
in Santa Ana, California.
The Company believes it is the leading provider of real estate-related
financial and information services to real property buyers and mortgage lenders
in the United States. The Company's products and services include title
insurance; real estate tax monitoring; mortgage credit reporting; mortgage loan
servicing systems; property information; flood zone determination; home warranty
services; appraisal services and mortgage document preparation. The Company also
provides trust and limited banking services. The title insurance and real estate
information segments operate through networks of offices nationwide. The
Company, through its subsidiaries, transacts its title insurance business
through a network of more than 300 branch offices and over 4,000 independent
agents. The Company also offers its title services in Australia, the Bahama
Islands, Bermuda, Canada, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and
the United Kingdom. Home warranty services are available in certain counties of
Arizona, California, Nevada, North Carolina, South Carolina, Texas and
Washington. The trust, banking and thrift businesses operate in Southern
California only. See "The First American Financial Corporation."
<PAGE>
THE OFFERING
Securities Offered............ $100,000,000 aggregate principal amount of
[____]% Senior Debentures due 2028.
Maturity Date................. [__________], 2028.
Interest Payment Dates........ [__________] and [__________], commencing
[__________], 1998.
Optional Redemption........... The Senior Debentures are redeemable at
the option of the Company at any time and
from time to time, in whole or in part, on
or after [________], 2008 at the redemption
prices set forth herein.
Ranking....................... The Senior Debentures are general
unsecured obligations of the Company and
rank senior in right of payment to all
existing or future indebtedness of the
Company that is by its terms expressly
subordinated in right of payment to the
Senior Debentures and will rank on parity
in right of payment with all other existing
and future indebtedness of the Company.
Same-Day Settlement........... Initial settlement for the Senior Debentures
will be made in immediately available funds.
While held in global form, the Senior
Debentures will settle in DTC's Same-Day
Funds Settlement System and settlement for
any secondary market trades and all payments
of principal and interest will be made in
immediately available funds.
Book-Entry System and Form
and Denomination of
Senior Debentures...............The Senior Debentures will be issued in
denominations of $1,000 and integral
multiples thereof. Payments of principal
and interest on Senior Debentures
represented by a permanent global Senior
Debenture registered in the name of, or
held by, the Depositary or its nominee will
be made in immediately available funds to
the Depositary or its nominee as the
registered holder of the permanent global
Senior Debenture. Senior Debentures will
not be issued in definitive form except
under the circumstances described herein.
See "Description of the Senior Debentures -
- Book-Entry System."
Principal Covenants.............The indenture under which the Senior
Debentures will be issued (the "Indenture")
imposes certain obligations and limitations
on the Company and its subsidiaries,
including, but not limited to, a limitation on
the incurrence of certain liens on the capital
stock of the Company's Restricted Subsidiaries.
(as such term is defined herein, see
"Description of the Securities -- Certain
Covenants of the Company").
Use of Proceeds.................The net proceeds from the sale of the
Senior Debentures will be used for general
corporate purposes, including, without
limitation, repayment of certain debt, the
purchase and development of certain real
properties and for potential acquisitions.
See "Use of Proceeds."
FOR ADDITIONAL INFORMATION REGARDING THE SENIOR DEBENTURES, INCLUDING
CERTAIN DEFINITIONS, SEE "DESCRIPTION OF THE SENIOR DEBENTURES."
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth summary historical consolidated financial
and other data for the Company for the five years ended December 31, 1997. The
information for the years 1993, 1994, 1995 and 1996 is qualified in its entirety
by reference to the financial statements and other information contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996,
incorporated by reference herein. The information for the year ended December
31, 1997 is not covered by a report by independent certified public accountants
as detailed financial statements for such year are not yet available and,
accordingly, have not been incorporated by reference herein. However, in the
opinion of management, all adjustments, consisting of normal recurring accruals,
necessary for fair presentation of such year have been made.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA: (Dollars in thousands, except per share data) (unaudited)
Revenues:
Operating revenues $1,379,781 $1,356,946 $1,227,185 $1,571,168 $1,860,205
Investment and other
income 18,645 19,447 23,031 26,398 27,256
---------- ---------- ---------- ---------- ----------
1,398,426 1,376,393 1,250,216 1,597,566 1,887,461
---------- ---------- ---------- ---------- ----------
Expenses:
Salaries and other
personnel costs 397,902 423,328 431,984 531,250 647,750
Premiums retained by
agents 504,375 533,598 413,444 516,593 563,137
Other operating expenses 222,934 232,532 257,823 322,709 411,319
Provision for title losses
and other claims 125,588 110,230 90,387 86,487 90,323
Depreciation and
amortization 16,333 19,796 20,790 27,242 38,149
Interest 4,419 6,267 6,242 4,796 9,994
Minority interest 5,267 2,944 2,132 2,624 3,676
---------- ---------- ---------- ---------- ----------
1,276,818 1,328,695 1,222,802 1,491,701 1,764,348
---------- ---------- ---------- ---------- ----------
Income before premium and
income taxes 121,608 47,698 27,414 105,865 123,113
Premium taxes 17,617 15,453 13,627 16,676 16,904
---------- ---------- ---------- ---------- ----------
Income before income taxes 103,991 32,245 13,787 89,189 106,209
Income taxes 41,900 13,300 6,200 35,600 41,500
---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of a change in
accounting for income taxes 62,091 18,945 7,587 53,589 64,709
Cumulative effect of a change
in accounting for income taxes 4,200 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income $66,291 $18,945 $7,587 $53,589 $64,709
========== ========== ========== ========== ==========
EARNINGS PER SHARE:*
Basic $3.89 $1.10 $0.44 $3.12 $3.73
Diluted** $3.89 $1.11 $0.45 $3.09 $3.64
========== ========== ========== ========== ==========
BALANCE SHEET DATA:
Cash and invested assets $359,127 $368,999 $340,089 $364,620 $411,014
Total assets $786,448 $828,649 $873,778 $979,794 $1,168,144
Notes and contracts $85,022 $89,600 $77,206 $71,257 $41,973
payable
Guaranteed preferred -- -- -- -- $100,000
beneficial interests in the
Company's junior
subordinated deferrable
interest debentures
Total stockholders' equity $283,718 $292,110 $302,767 $352,465 $411,412
========== ========== ========== ========== ==========
<PAGE>
OTHER DATA:
Loss ratio 9.1% 8.1% 7.4% 5.5% 4.9%
Ratio of debt to total
capitalization*** 21.5% 22.1% 19.1% 16.0% 7.3%
Cash flow from operations $105,720 $53,915 $38,482 $112,843 $111,155
EBITDA**** $142,360 $73,761 $51,658 $132,868 $171,256
Capital Expenditures $36,161 $34,562 $29,643 $48,785 $74,486
Ratio of EBITDA to 32.2 11.8 8.7 28.8 17.1
interest
Depreciation and amortization $16,333 $19,796 $20,790 $27,242 $38,149
========== ========== ========== ========== ==========
<FN>
---------------------------------
* Based upon the weighted average number of common shares outstanding. On
December 11, 1997, the Company declared a three-for-two stock split to
shareholders of record on January 1, 1998. The shares commenced trading on
a post-split basis on January 16, 1998. See the Company's Report on Form
8-K dated January 23, 1998, which is incorporated by reference herein.
AS OF THE DATE OF THIS PROSPECTUS, THE FINANCIAL DATA INCORPORATED BY
REFERENCE HEREIN, IS PRE-STOCK SPLIT DATA. THE FINANCIAL DATA APPEARING
ABOVE AND SUBSEQUENT DISCLOSURES BY THE COMPANY, INCLUDING DISCLOSURES
REQUIRED BY APPLICABLE EXCHANGE ACT REPORTING REQUIREMENTS AND INCORPORATED
BY REFERENCE HEREIN, IS POST-STOCK SPLIT DATA. CARE SHOULD BE TAKEN TO
DISTINGUISH THE TWO.
** After restatement for the adoption of statement of financial accounting
standards No. 128, "Earnings per Share."
*** Capitalization includes minority interests and junior subordinated
deferrable interest debentures.
**** "EBITDA" consists of operating income plus depreciation and amortization.
The Company believes that EBITDA provides additional information for
determining its ability to meet debt service requirements. EBITDA does not
represent and should not be considered as an alternative to net income or
cash flow from operations as determined by generally accepted accounting
principles, and EBITDA does not necessarily indicate whether cash flow will
be sufficient for cash requirements.
</FN>
</TABLE>
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus,
investors should consider carefully the following risk factors before making an
investment in the Senior Debentures. To the extent any of the information
contained or incorporated by reference in this Prospectus constitutes a
"forward-looking statement" as defined in Section 27A of the Securities Act, the
risk factors set forth below are cautionary statements identifying important
factors that could cause actual results to differ materially from those in the
forward-looking statement. See "Forward-Looking Statements."
STATUS OF COMPANY AS HOLDING COMPANY
As a holding company, the ability of the Company to make payments of
interest and principal on the Senior Debentures will be dependent primarily upon
the receipt of dividends and other distributions from its subsidiaries. First
American Title Insurance Company ("FATICO"), which is the Company's principal
subsidiary, is subject to regulatory restrictions on its ability to pay
dividends or make other payments to the Company. In 1998, the maximum amount of
dividends, loans and advances available to the Company from FATICO is $52.1
million. In addition, the right of the Company to participate in any
distribution of assets of any subsidiary, including FATICO, upon such
subsidiary's liquidation or reorganization or otherwise, will be subject to the
prior claims of creditors of that subsidiary, except to the extent that any
claims of the Company as a creditor of such subsidiary may be recognized as
such. Accordingly, the Senior Debentures will effectively be subordinated to all
existing and future liabilities and obligations of the Company's subsidiaries
and holders of the Senior Debentures should look only to the assets of the
Company for payments on the Senior Debentures. As of December 31, 1997, the
Company's subsidiaries had liabilities and obligations of approximately $642.1
million net of intercompany indebtedness. See "The First American Financial
Corporation."
ABSENCE OF PUBLIC MARKET
Prior to this offering there has been no public market for the Senior
Debentures, and there can be no assurance that such a market will develop. The
Company does not intend to apply for listing of the Senior Debentures on any
securities exchange or authorization for quotation on the National Association
of Securities Dealers Inc. Automated Quotation System. The Company has been
advised by the Underwriters that they intend to make a market in the Senior
Debentures, as permitted by applicable laws and regulations. However, the
Underwriters are not obligated to make a market in the Senior Debentures, and
any market-making activity with respect to the Senior Debentures may be
discontinued at any time without notice. Accordingly, no assurance can be given
that an active public or other market will develop for the Senior Debentures or
as to the liquidity of or the trading market for the Senior Debentures. If an
active public market does not develop, the market price and liquidity of the
Senior Debentures may be adversely affected.
CYCLICAL NATURE OF REAL ESTATE MARKET
Resales and refinancings of residential properties constitute the major
source of the Company's revenues. Real estate activity is cyclical in nature and
is affected greatly by the cost and availability of long-term mortgage funds.
Real estate activity and, in turn, the Company's revenue base, can be adversely
affected during periods of high interest rates and/or limited money supply.
However, this adverse effect is mitigated in part by the continuing
diversification of the Company's operations into areas outside of its
traditional title insurance business.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
As a key component of its growth strategy, the Company has pursued and
intends to continue to pursue acquisitions in the real estate service industry
related businesses. Certain risks are inherent in an acquisition strategy, such
as increasing leverage and debt service requirements and combining disparate
company cultures and facilities, which could adversely affect the Company's
financial position and operating results. The success of any completed
acquisition will depend in part on the Company's ability to integrate
effectively the acquired businesses into the Company. This process may involve
unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's financial and other resources. No
assurance can be given that additional suitable acquisition candidates will be
identified, financed and purchased on acceptable terms, or that recent
acquisitions or future acquisitions, if completed, will be successful.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the continued services of the
Company's senior management, particularly its President, Parker S. Kennedy, its
Chairman and Director, D.P. Kennedy, and its Executive Vice President and Chief
Financial Officer, Thomas A. Klemens. The loss of the services of any of these
individuals could have a material adverse effect on the Company's financial
position and results of operations. The Company's success also depends on its
ability to attract and retain other highly qualified managerial personnel.
YEAR 2000 COSTS
Currently, many computer systems and software products are coded to accept
only two digit entries in the date code field. These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, many companies' software and computer systems may need to be
upgraded or replaced in order to comply with such "Year 2000" requirements. The
Company and third parties with which the Company does business rely on numerous
computer programs in their day to day operations. The Company is evaluating the
Year 2000 issue as it relates to the Company's internal computer systems and
third party computer systems with which the Company interacts. The Company
expects to incur internal staff costs as well as consulting and other expenses
related to these issues; these costs will be expensed as incurred. In addition,
the appropriate course of action may include replacement or an upgrade of
certain systems or equipment at a substantial cost to the Company. There can be
no assurance that the Year 2000 issues will be resolved in 1998 or 1999. The
Company may incur significant costs in resolving its Year 2000 issues. If not
resolved, this issue could have a significant adverse impact on the Company's
operations.
GOVERNMENT REGULATION
The insurance industry is subject to extensive governmental regulation.
Applicable laws and their interpretation vary from state to state and are
enforced with broad discretion. There can be no assurance that any review of the
Company's operations and business relationships by courts or other regulatory
authorities will not result in determinations that could adversely affect the
Company or that the regulatory environment will not change to restrict the
Company's existing or future operations.
USE OF PROCEEDS
The net proceeds from the sale of the Senior Debentures will be used for
general corporate purposes, including, without limitation, repayment of certain
debt, the purchase and development of certain real properties and for potential
acquisitions. The Company will use approximately $12.1 million of net proceeds
to satisfy the Company's obligations under a certain sale-leaseback agreement
which imposes an implicit interest rate of 10.3% per annum and approximately
$4.8 million of net proceeds to retire certain of the Company's senior notes
bearing an interest rate of 9.38% per annum and maturing in April 1999. The
Company currently intends to use approximately $50 million of net proceeds to
purchase and construct the Company's new headquarters facility located in Santa
Ana, California and approximately $20 million of net proceeds to purchase and
construct offices in Poway, California to house certain of the Company's
subsidiaries. Pending such a use, some portion of such funds may be invested in
short-term marketable securities. The remainder of such proceeds may be added to
the general funds of the Company.
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The Company's consolidated ratio of earnings to fixed charges is set forth
below for each of the periods indicated:
Year Ended December 31,
---------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
- -------------------------------------------------------------------------------
Earnings to Fixed Charges 24.5 6.1 3.2 19.6 11.6
For purposes of computing the ratio of earnings to fixed charges, earnings
represent net income plus applicable income taxes and fixed charges. Fixed
charges represent interest expense.
CAPITALIZATION
The following table sets forth the capitalization of the Company and its
subsidiaries, on an unaudited consolidated basis, as of December 31, 1997, and
as adjusted to give effect the offering of the Senior Debentures and the use of
proceeds therefrom. See "Use of Proceeds."
AS OF DECEMBER 31, 1997
ACTUAL AS ADJUSTED
(UNAUDITED)
(IN THOUSANDS)
NOTES AND CONTRACTS PAYABLE................... $41,973 $36,653
-------- --------
SENIOR DEBENTURES............................. -- 100,000
--------
MINORITY INTERESTS............................ 25,214 25,214
-------- --------
GUARANTEED PREFERRED BENEFICIAL
INTERESTS IN THE COMPANY'S
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES......................... 100,000 100,000
-------- --------
SHAREHOLDERS' EQUITY
Common Stock............................... 61,327 61,327
Retained Earnings.......................... 344,645 344,645
Net Unrealized Gain on Securities.......... 5,440 5,440
-------- --------
Total Shareholders' Equity.............. 411,412 411,412
-------- --------
TOTAL CAPITALIZATION.......................... $578,599 $673,279
======== ========
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
OVERVIEW
The Company was organized in 1894 as Orange County Title Company,
succeeding to the business of two title abstract companies founded in 1889 and
operating in Southern California. In 1924, the Company commenced issuing title
insurance policies. In 1986, the Company began a diversification program by
acquiring and developing financial service businesses closely related to the
real estate transfer and closing process. The Company is a California
corporation whose executive offices are located at 114 East Fifth Street, Santa
Ana, California 92701-4642, and its telephone number is (714) 558-3211.
The Company, through its subsidiaries, is engaged in the business of
providing real estate-related financial and informational services, including
title insurance, real estate tax monitoring, mortgage credit reporting, flood
zone determination, mortgage loan servicing systems, property information, home
warranty services, appraisal services and mortgage document preparation to real
property buyers and mortgage lenders. The Company also provides trust and
limited banking services.
Through growth and acquisitions, the Company believes it has become the
United States' largest provider of real estate-related financial and
informational services. The Company has assembled an array of companies which,
together, provide comprehensive services to the mortgage industry, commercial
and residential real estate developers, home buyers and other customers.
BUSINESS SEGMENTS
TITLE INSURANCE
Title insurance policies are insured statements of the condition of title
to real property, showing priority of ownership as indicated by public records,
as well as outstanding liens, encumbrances and other matters of record, and
certain other matters not of public record. Policies are issued based on a title
report prepared after a search of public records, maps, and documents and are
typically issued when a title is transferred.
Unlike other types of insurance policies, title insurance policies do not
insure against future risk. Before issuing title policies, title insurers seek
to limit their risk of loss by accurately performing title searches and
examinations. The major expenses of a title company relate to such searches and
examinations, the preparation of preliminary reports or commitments and the
maintenance of title plants, and not from claim losses as in the case of
property and casualty insurers.
The Company, through First American Title Insurance Company and its other
subsidiaries, transacts its title insurance business through a network of more
than 300 branch offices and more than 4,000 independent agents. In 1997, the
Company's title insurance operations generated $1.48 billion in revenues.
REAL ESTATE INFORMATION SERVICES
In recent years management has developed a strategy to be a "one-stop" real
estate information service company. To this end, in 1991 the Company acquired
what was believed to be the second largest tax service company, and in 1995
acquired what were believed to be, in each case, the largest mortgage credit
reporting company and the largest flood zone determination company, in the
United States.
In general, the Company's real estate information service products generate
higher margins than its title insurance products. The majority of pre-tax
profits generated by the Company from non-title business is derived from the
real estate services business, which generated $45.3 million in pre-tax profits
in 1997 and $331.2 million in revenues. Approximately 29% of the Company's
pre-tax profits in 1997 were derived from its real estate information services
businesses. These businesses are not regulated and hence not constrained by
dividend statutes enforceable by the states in which the Company operates its
title business or by constraints imposed by California on the Company's trust
and banking business.
First American Real Estate Information Services, Inc. ("FAREIS") has grown
from its tax service origins into a diversified mortgage services company.
FAREIS and its subsidiaries now serve mortgage originators, mortgage servicers,
title companies, real estate attorneys, consumers as well as non-lending
entities. The business was initially established in 1987 to advise mortgage
lenders as to the status of tax payments on real property securing their loans.
The Company's real estate information services also include mortgage and other
credit reporting services, flood zone determinations, mortgage loan servicing
systems, property inspections, appraisal services and mortgage document
preparation.
The tax service business includes both real estate tax reporting as well as
tax outsourcing and tax certification. The Company's tax service business
reports on 12 million properties annually and is believed to be the second
largest provider of tax services to the real estate market. The Company works
with over 22,000 taxing authorities nationwide.
First American CREDCO, Inc. ("CREDCO"), the Company's mortgage credit
reporting entity, is believed by the Company to be the largest provider of these
services in the United States and processes over 600,000 credit reports per
month. CREDCO provides residential mortgage credit reports, prequalifying
reports, merged credit data, resident screening services, business reports,
credit scoring tools and personal credit reports. CREDCO has recently branched
into the consumer lending and risk scoring areas, providing credit reporting and
information management services to automobile dealers, consumers and home equity
lenders nationwide. Approximately 25% of CREDCO's 1997 revenues were from
non-real estate related sources.
The Company is the leading provider of flood zone determinations. Flood
reporting services consist of a broad range of information required by
regulatory agencies regarding properties in relation to flood zones. This
business currently processes over 400,000 flood determinations per month.
The property/field services business consists of processing single family
home inspections, conducting field interviews with delinquent mortgagors,
monitoring the condition of properties and assuring timely property
preservation. The Company's acquisition in December 1996 of Ward Associates
places the Company among the leaders in this business.
The appraisal services business utilizes leading technology to provide
national mortgage lenders with property-relative value assessments. The
appraisal services business operates throughout the United States. Electronic
appraisals are supplemented with qualified local appraisers.
In April 1996, the Company acquired the Excelis Mortgage Loan Servicing
System ("Excelis MLS"), now known as Excelis, Inc. Excelis MLS is the only
commercially available real-time on-line servicing system that has been
developed since 1990 to meet increasingly sophisticated market demands. The
software employs rules-based technology, which enables the user to customize the
system to fit its individual servicing criteria and policies.
In May 1997, the Company purchased all of the operations of Strategic
Mortgage Services, Inc., a Delaware Corporation ("SMS"), other than SMS' flood
zone determination business. SMS is a leading provider of real estate
information services to the U.S. mortgage and title insurance industries. The
acquired businesses include SMS' credit division, which the Company believes is
the third largest provider of U.S. mortgage credit information; SMS' property
appraisal division, which the Company believes is the second largest provider of
U.S. appraisal services; SMS' title division, which provides title and closing
services throughout the United States, servicing primarily second mortgage
originators; SMS' settlement services business, which provides title plant
systems and accounting services, as well as escrow closing software, to the
title industry; and a controlling interest in what the Company believes is
largest mortgage document preparation firm.
On January 1, 1998, the Company and its real estate information service
subsidiaries (other than Excelis Inc.) (the "Real Estate Information
Subsidiaries") consummated a joint venture with Experian Information Solutions,
Inc. ("Experian"), pursuant to which First American Real Estate Solutions LLC
("FARES") was established. Under the joint venture, the Real Estate Information
Subsidiaries contributed substantially all of their assets and liabilities to
FARES in exchange for an 80% ownership interest and Experian transferred
substantially all of the assets and liabilities of its Real Estate Solutions
division ("RES") to FARES in exchange for a 20% ownership interest. The Company
believes that RES is the nation's foremost supplier of core real estate data,
providing, among other things, property valuation information, title
information, tax information and imaged title documents. As a result of this
joint venture, the Company believes that FARES is the nation's largest and most
diverse provider of information technology and decision support solutions for
the mortgage and real estate industries. See the Company's Report on Form 8-K
dated January 27, 1998, which is incorporated by reference herein.
HOME WARRANTY
The Company currently owns 79% of its home warranty business, with the
remaining balance owned by current and former management of this subsidiary. The
home warranty business issues one-year warranties which protect homeowners
against defects in household systems and appliances such as plumbing, water
heaters, and furnaces. The warranties issued are for household systems and
appliances only, not for the homes themselves. The Company's home warranty
business currently operates in certain counties of Arizona, California, Nevada,
North Carolina, South Carolina, Texas and Washington. The Company believes its
home warranty business is the second largest in the United States based on
contracts under service, with $51.0 million in revenues in 1997.
TRUST AND THRIFT
Since 1960, the Company has conducted a general trust business in
California. In 1985, the Company formed a banking subsidiary into which its
subsidiary trust operation was merged. As of December 31, 1997, the trust
operations were administering fiduciary and custodial assets having a market
value in excess of $1.3 billion.
During 1988, the Company, through a majority owned subsidiary, acquired an
industrial loan corporation (the "Thrift") that accepts thrift deposits and uses
deposited funds to originate and purchase loans secured by commercial properties
in Southern California. The loans made by the Thrift currently range in amount
from $20,000 to $1,105,000, with an average loan balance of $270,500. Loans are
made only on a secured basis, at loan-to-value percentages no greater than 75%.
The Thrift specializes in making commercial real estate loans and financing
commercial equipment leases. In excess of 93% of the Thrift's loans are made on
a variable rate basis. The average yield on the Thrift's loan portfolio as of
December 31, 1997, was 11%. The Thrift's average loan is 60 months in duration.
Current deposits total $62.5 million and the loan portfolio totals $63.4
million.
DESCRIPTION OF THE SENIOR DEBENTURES
The Senior Debentures will be issued under a Senior Indenture (the
"Indenture") between the Company and Wilmington Trust Company, as trustee (the
"Trustee"). This summary of the material terms and provisions of the Senior
Debentures and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the Indenture.
GENERAL
The Senior Debentures will be issued in a principal amount of one hundred
million dollars ($100,000,000). The Senior Debentures will bear interest at the
annual rate of [__]% of the principal amount thereof, payable semi-annually in
arrears on [_____] and [_____] of each year (each, an "Interest Payment Date"),
commencing [_____], 1998, to the person in whose name each Senior Debenture is
registered, subject to certain exceptions, at the close of business on the first
day of the month of the relevant Interest Payment Date. The amount of interest
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on the
Senior Debentures is not a Business Day (as such term is defined below), then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), except that if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case, with the same force and effect as if made on the date such
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 is closed for business.
MATURITY; OPTIONAL REDEMPTION
The Senior Debentures will mature on [_____], 2028 (such date, the "Stated
Maturity"). No sinking fund is provided for the Senior Debentures. The Company
may at any time, at its option, on or after [_____], 2008 and subject to the
terms and conditions of the Indenture, redeem the Senior Debentures in whole at
any time or in part from time to time at a redemption price equal to the
following prices, expressed in percentages of the principal amount, plus accrued
and unpaid interest, to but excluding the date of redemption. If redeemed during
the 12-month period beginning [_____]:
Redemption
Year Price
2008 %
2009
2010
2011
2012
2013
2014
2015
2016
2017
and at 100% on or after [_____], 2018.
RANKING
The Senior Debentures will be unsecured and will rank senior in right of
payment to all existing or future indebtedness of the Company that is by its
terms expressly subordinated in right of payment to the Senior Debentures and
will rank pari passu with all other indebtedness of the Company. The Senior
Debentures will be effectively subordinated to all existing and future
liabilities and obligations of the Company's subsidiaries and holders of the
Senior Debentures should look only to the assets of the Company for payments on
the Senior Debentures. As of December 31, 1997, the Company's subsidiaries had
liabilities and obligations of approximately $642.1 million net of intercompany
indebtedness. See "The First American Financial Corporation."
BOOK-ENTRY SYSTEM
The Senior Debentures will initially be issued in the form of a Global
Security held in book-entry form. DTC or its nominee will be the sole registered
holder of the Senior Debentures for all purposes under the Indenture.
Upon the issuance of a Global Security evidencing the Senior Debentures,
DTC or its nominee will credit the accounts of persons holding through it with
the respective principal amounts of the Senior Debentures represented by such
Global Security purchased by such persons. Such accounts shall be designated by
the Underwriters, with respect to Senior Debentures placed by the Underwriters
for the Company. Ownership of beneficial interests in a Global Security will be
limited to persons that have accounts with DTC ("participants") or persons that
may hold interests through participants. Ownership by participants of beneficial
interests in a Global Security will be shown on, and the transfer of such
ownership interests will be effected only through, records maintained by DTC for
such Global Security. Ownership of beneficial interests in such Global Security
by persons that hold through participants will be shown on, and the transfer of
such ownership interests within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
Payment of principal and interest on Senior Debentures represented by any
such Global Security will be made to DTC or its nominee, as the case may be, as
the sole registered owner and the sole holder of the Senior Debentures
represented thereby for all purposes under the Indenture. None of the Company,
any agent of the Company, or the Trustee or the Underwriters will have any
responsibility or liability for any aspect of DTC's records relating to, or
payments made on account of, beneficial ownership interests in a Global Security
representing any Senior Debentures or for maintaining, supervising, or reviewing
any of DTC's records relating to such beneficial ownership interests.
The Company has been advised by DTC that upon receipt of any payment of
principal of or interest on any Global Security, DTC will immediately credit, on
its book-entry registration and transfer system, the accounts of participants
with payments in amounts proportionate to their respective beneficial interests
in the principal or face amount of such Global Security as shown on the records
of DTC. Payments by participants to owners of beneficial interests in a Global
Security held through such participants will be governed by standing
instructions and customary practices as is now the case with securities held for
customer accounts registered in "street name" and will be the sole
responsibility of such participants.
A Global Security may not be transferred except as a whole by DTC to a
nominee of DTC. A Global Security is exchangeable for Senior Debentures only if
(i) DTC notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company executes and
delivers to the Trustee a notice that such Global Security shall be so
transferable, registrable, and exchangeable, and such transfers shall be
registrable, or (iii) there shall have occurred and be continuing an Event of
Default (defined below) or an event which, with the giving of notice or lapse of
time or both, would constitute an Event of Default (defined below) with respect
to the Senior Debentures represented by such Global Security. Any Global
Security that is exchangeable for Senior Debentures pursuant to the preceding
sentence will be transferred to, and registered and exchanged for, Senior
Debentures in authorized denominations and registered in such names as the
Depositary holding such Global Security may direct. Subject to the foregoing,
the Global Security is not exchangeable, except for a Global Security of like
denomination to be registered in the name of the Depositary or its nominee. In
the event that a Global Security becomes exchangeable for Senior Debentures, (i)
Senior Debentures will be issued only in fully registered form in denominations
of $1,000 or integral multiples thereof, (ii) payment of principal, any
repurchase price, and interest on the Senior Debentures will be payable, and the
transfer of the Senior Debentures will be registrable, at the office or agency
of the Company maintained for such purposes, and (iii) no service charge will be
made for any registration of transfer or exchange of the Senior Debentures,
although the Company may require payment of a sum sufficient to cover any tax or
governmental charge imposed in connection therewith.
So long as DTC or its nominee is the registered owner of such Global
Security, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Senior Debentures represented by such Global Security for
the purposes of receiving payment on the Senior Debentures, receiving notices,
and for all other purposes under the Indenture and the Senior Debentures.
Beneficial interests in Senior Debentures will be evidenced only by, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. Cede & Co. has been appointed as the nominee of DTC. Except as
provided above, owners of beneficial interests in a Global Security will not be
considered the holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such a Global Security
must rely on the procedures of DTC and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, in the event that the Company requests
any action of holders, or that an owner of a beneficial interest in such a
Global Security desires to give or take any action which a holder is entitled to
give or take under the Indenture, DTC would authorize the participants holding
the relevant beneficial interest to give or take such action and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
DTC has advised the Company that DTC is a limited-purpose trust company
organized under the Banking Law of the State of New York, a member of the
Federal Reserve system, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (including the Underwriters), banks, trust companies, clearing
corporations, and certain other organizations some of whom (and/or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers, and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
SAME-DAY SETTLEMENT AND PAYMENT
Initial settlement for the Senior Debentures will be made in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds or the equivalent, so long as DTC
continues to make the Same-Day Funds Settlement System available to the Company.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Senior
Debentures will trade in DTC's Same-Day Funds Settlement System. Secondary
market trading activity in the Senior Debentures will therefore be required by
DTC to settle in immediately available funds. No assurance can be given as to
the effect, if any, of settlement in immediately available funds on trading
activity in the Senior Debentures.
CERTAIN COVENANTS OF THE COMPANY
LIMITATION ON LIENS ON CAPITAL STOCK OF RESTRICTED SUBSIDIARIES
The Indenture provides that the Company may not, and may not permit any
Subsidiary to, create, assume, incur or suffer to exist any Lien, other than a
Purchase Money Lien, upon any capital stock of any Restricted Subsidiary,
whether owned on the date of the Indenture or thereafter acquired, to secure any
Indebtedness (other than the Senior Debentures) of the Company, any Subsidiary
or any other Person without in any such case making effective provision whereby
all of the outstanding Senior Debentures shall be directly secured equally and
ratably with such Indebtedness or, if such Indebtedness is secured by a Lien and
is expressly subordinated or junior in right of payment to the Senior
Debentures, secured by a Lien that is senior in priority to the Lien securing
such Indebtedness; provided, however, that this restriction will not apply to
(i) Liens on the capital stock of any Restricted Subsidiary securing
Indebtedness outstanding from time to time, provided that the principal amount
of all such Indebtedness secured by Liens on the capital stock of any Restricted
Subsidiary, at the time of each incurrence of any portion of any such
Indebtedness, does not exceed 20% of Total Capitalization and (ii) Liens
securing Indebtedness from the Company to any wholly owned Restricted Subsidiary
or from any wholly owned Restricted Subsidiary to the Company or its
subsidiaries. This provision will not restrict any other property of the Company
or its Subsidiaries. Pursuant to clause (i) above, as of December 31, 1997, the
Company could have secured by Liens on the capital stock of Restricted
Subsidiaries up to approximately $134.7 million of Indebtedness, without
providing security to the holders of the Senior Debentures. In fact, however, as
of December 31, 1997, the Company has no Indebtedness secured by Liens on the
capital stock of the Restricted Subsidiaries and the Company's Credit Facility
is unsecured.
The Indenture defines: "Total Capitalization," as of the date of
determination, as the sum of (i) all Indebtedness of the Company outstanding as
of such date, including, without limitation, the Company's junior deferrable
interest debentures, the Securities and all Indebtedness under bank credit
facilities, (ii) the Company's consolidated shareholders' equity at the end of
the most recently completed fiscal quarter of the Company immediately preceding
such date of determination for which financial statements are or are required to
be available and (iii) the minority interests in Subsidiaries of the Company at
the end of the most recently completed fiscal quarter of the Company immediately
preceding such date of determination for which financial statements are or are
required to be available; "Credit Facility" as the Amended and Restated Credit
Agreement among the Company, The Chase Manhattan Bank, and the lenders party
thereto from time to time, dated as of July 29, 1997, as amended from time to
time; "Lien" as any mortgage, pledge, hypothecation, encumbrance, charge or
security interest of any kind; "Indebtedness" as indebtedness for money borrowed
or indebtedness evidenced by a bond, note, debenture or other evidence of
indebtedness; "Person" as any individual, corporation, partnership, joint
venture, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof; "Purchase Money Lien"
as (i) a Lien upon any capital stock of any Restricted Subsidiary acquired
before or after the date of the Indenture if such Lien is for the purpose of
financing the acquisition of the capital stock of such Restricted Subsidiary,
and does not exceed the cost to the Company or any Subsidiary of acquiring the
capital stock of such Restricted Subsidiary and such financing is effected
concurrently with, or within six months after, the date of such acquisition and
(ii) any extension, renewal or refinancing of any such Lien described in clause
(i) immediately above so long as the principal amount of obligations secured
thereby shall not exceed the original principal amount of obligations so secured
at the time of any such extension, renewal or refinancing; "Restricted
Subsidiary" as any Subsidiary that is a licensed insurance company having
capital and surplus in excess of $2.5 million; "Securities" as the Company's
senior unsecured debt securities; and "Subsidiary" as a corporation or business
trust, a majority of the outstanding voting securities of which is owned,
directly or indirectly, by the Company and/or one or more Subsidiaries. On the
date hereof, the Restricted Subsidiaries of the Company are First American Title
and Trust Company, First American Title Insurance Company, First American Home
Buyers Protection Corporation, First American Title Insurance Company of New
York, First American Title Insurance Company of Oregon, First American Title
Insurance Company of Texas and Port Lawrence Title and Trust Company.
LIMITATION ON CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that 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 (i) the successor Person is
organized under the laws of the United States or any state or the District of
Columbia, and such successor Person expressly assumes the Company's obligations
on the Senior Debentures issued under the Indenture; (ii) immediately after
giving effect thereto, 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; (iii) any such lease shall provide that it will remain in effect
so long as any Senior Debentures are outstanding; and (iv) certain other
conditions prescribed in the Indenture are met.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Senior Debentures that has occurred and is continuing
constitutes an "Event of Default" with respect to the Senior Debentures:
(i) failure for 30 days to pay any interest on the Senior Debentures when due;
or
(ii) failure to pay any principal on the Senior Debentures when due whether at
maturity, upon redemption by declaration or otherwise; or
(iii)failure to observe or perform in any material respect any other covenant
contained in the Indenture for 90 days after written notice to the Company
from the Trustee or the holders of at least 25% in aggregate outstanding
principal amount of outstanding Senior Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the Company;
or
(v) any default or event of default under any Indebtedness of the Company or
any of its Subsidiaries other than Indebtedness secured by assets of the
Company or any of its Subsidiaries the terms of which limit the remedies of
the holder or holders thereof primarily to the assets so secured
("Nonrecourse Indebtedness"), which default or event of default results in
at least $10 million of aggregate principal amount of such Indebtedness
being declared due and payable prior to maturity and such acceleration is
not rescinded within 10 days thereafter; or
(vi) failure by the Company or any of its Subsidiaries to pay at maturity any
Indebtedness other than Nonrecourse Indebtedness in excess of $10 million
aggregate principal amount, and such failure shall not have been cured
within 10 days thereafter.
The holders of a majority in aggregate outstanding principal amount of
Senior Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee. The Trustee
or the holders of not less than 25% in aggregate outstanding principal amount of
Senior Debentures may declare the principal due and payable immediately upon an
Event of Default. The holders of a majority in aggregate outstanding principal
amount of Senior Debentures may annul such declaration and waive the default if
the default (other than the non-payment of the principal of Senior Debentures
which has become due solely by such acceleration) 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.
The holders of a majority in aggregate outstanding principal amount of the
Senior Debentures may, on behalf of the holders of all the Senior Debentures,
waive any past default, except a default in the payment of principal or interest
(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 a default in respect of a covenant or
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Senior Debenture. The Company is
required to file annually with the Trustee a certificate as to whether or not
the Company is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case an Event of Default shall occur and be continuing, the Trustee will
have the right to declare the principal of and the interest on such Senior
Debentures and any other amounts payable under the Indenture to be forthwith due
and payable and to enforce its other rights as a creditor with respect to such
Senior Debentures.
MODIFICATION OF INDENTURE
From time to time the Company and the Trustee may, without the consent of
the holders of the Senior Debentures, amend, waive or supplement the Indenture
for specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies (provided that any such action does not materially
and adversely affect the interests of the holders of Senior Debentures) and
qualifying, or maintaining the qualification of, the Indenture under the Trust
Indenture Act of 1939, as amended. The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the holders of not less than a
majority in principal amount of outstanding Senior Debentures affected, to
modify the Indenture in a manner affecting the rights of the holders of such
Senior Debentures; provided that no such modification may, without the consent
of the holder of each outstanding Senior Debenture so affected, (i) change the
stated maturity of Senior Debentures or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon (except such
extension as is contemplated hereby) or (ii) reduce the percentage of principal
amount of Senior Debentures the holders of which are required to consent to any
such modification of the Indenture.
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company, at the Company's option: (a) will
be discharged from any and all obligations in respect of the Senior Debentures
(except for certain obligations to register the transfer or exchange of Senior
Debentures, replace stolen, lost or mutilated Senior Debentures, maintain paying
agencies and hold moneys for payment in trust) or (b) need not comply with
certain restrictive covenants of the Indenture (including those described under
"Certain Covenants of the Company"), in each case if the Company deposits, in
trust with the Trustee, money or U.S. government obligations which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money, in an amount sufficient to pay all the principal of, and
interest and premium, if any, on the Senior Debentures on the dates such
payments are due in accordance with the terms of such Senior Debentures. To
exercise any such option, the Company is required to deliver to the Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the holders of Senior Debentures to recognize income, gain or loss for
United States federal income tax purposes and, in the case of a discharge
pursuant to clause (a), such opinion shall be accompanied by a private letter
ruling to that effect received by the Company from the United States Internal
Revenue Service or revenue ruling pertaining to a comparable form of transaction
to such effect by the United States Internal Revenue Service.
PAYMENT AND PAYING AGENTS
Initially, the Company will act as paying agent with respect to the Senior
Debentures. The Company at any time may designate additional paying agents or
rescind the designation of any paying agent or approve a change in the office
through which any paying agent acts, except that the Company will be required to
maintain a paying agent at the place of payment.
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
Senior Debentures and remaining unclaimed for two years after such principal or
interest has become due and payable shall, at the request of the Company, be
repaid to the Company, and the holder of such Senior Debentures shall thereafter
look, as a general unsecured creditor, only to the Company for payment thereof.
GOVERNING LAW
The Indenture and the Senior Debentures will be governed by and construed
in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEE
The Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Senior Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby. The
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
between the Company and the several Underwriters named below (each an
"Underwriter"), dated __________ __, 1998 (the "Underwriting Agreement"), the
Company has agreed to sell to the Underwriters, and the Underwriters have
severally agreed to purchase from the Company, the principal amount of the
Senior Debentures set forth below opposite their respective names:
Principal Amount of
Underwriter Senior Debentures
Chase Securities Inc............................................................
First Chicago Capital Markets, Inc..............................................
Total......................................................$100,000,000
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Senior Debentures
offered hereby if any of the Senior Debentures are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the Senior Debentures to the public initially at the respective
offering price set forth on the cover page of this Prospectus, and to certain
dealers initially at such price less a discount not in excess of 0.[_____]% of
the principal amount of the Senior Debentures. The Underwriters may allow, and
such dealers may reallow, a concession to certain other dealers not in excess of
0.[_____]% of the principal amount of the Senior Debentures on sales to certain
other dealers. After the initial public offering, the public offering price and
such concessions may be changed.
Chase Securities Inc. is an affiliate of The Chase Manhattan Bank which is
the agent for and a lender under the Credit Facility. First Chicago Capital
Markets, Inc. is an affiliate of The First National Bank of Chicago. The Chase
Manhattan Bank, The First National Bank of Chicago and their respective
affiliates participate on a regular basis in various general financing and
banking transactions for the Company and its affiliates.
The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act, and to contribute
to payments which the Underwriters might be required to make in respect thereof.
In connection with the offering of the Senior Debentures, Chase Securities
Inc., on behalf of the Underwriters, may engage in overallotment, stabilizing
transactions and syndicate covering transactions. Overallotment involves sales
in excess of the offering size, which creates a short position for the
Underwriters. Stabilizing transactions involve bids to purchase the Senior
Debentures in the open market for the purpose of pegging, fixing or maintaining
the price of the Senior Debentures. Syndicate covering transactions involve
purchases of the Senior Debentures in the open market after the distribution has
been completed in order to cover short positions. Such stabilizing transactions
and syndicate covering transactions may cause the price of the Senior Debentures
to be higher than it would otherwise be in the absence of such transactions.
Such activities, if commenced, may be discontinued at any time.
The Senior Debentures are a new series of securities with no established
trading market and will not be listed on any securities exchange. The
Underwriters have advised the Company that they intend to make a market in the
Senior Debentures, but are under no obligation to do so and such market making
may be terminated at any time. Therefore, no assurance can be given as to the
liquidity of, or the trading market for, the Senior Debentures.
LEGAL MATTERS
The validity of the Senior Debentures will be passed upon by White & Case
LLP, 633 West Fifth Street, Los Angeles, California 90071, as counsel for the
Company. Certain legal matters will be passed upon for the Underwriters by
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1996, have been
so incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
* * *
<PAGE>
(outside back cover page)
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR THE SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES, OR ANY OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY, SUCH SECURITIES, IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER
OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
Available Information 2
Incorporation of Documents by Reference 2
Forward-Looking Statements 3
Prospectus Summary 4
Risk Factors 9
Use of Proceeds 11
Ratio of Earnings to Fixed Charges 12
Capitalization 12
The First American Financial Corporation 13
Description of the Senior Debentures 17
Underwriting 26
Legal Matters 27
Experts 27
<PAGE>
Prospectus
THE FIRST AMERICAN
FINANCIAL CORPORATION
$100,000,000
[_____]% Senior Debentures due 2028
[Logo of The First American
Financial Corporation]
CHASE SECURITIES INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
Dated March __, 1998
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions,
are estimated to be as follows:
Securities and Exchange Commission registration fee..................... $29,500
Trustee's fees*......................................................... $7,000
Printing expenses*...................................................... $15,000
Legal fees and expenses*................................................ $80,000
Accounting fees and expenses*........................................... $50,000
Miscellaneous*.......................................................... $5,000
Total*.........................................................$186,500
____________
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subject to certain limitations, Section 317 of the California Corporations
Code provides in part that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the corporation to
procure a judgment in its favor) by reason of the fact that the person is or was
an agent (which term includes officers and directors) of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful.
The California indemnification statute, as provided in Section 317 of the
California Corporations Code (noted above), is nonexclusive and allows a
corporation to expand the scope of indemnification provided, whether by
provisions in its Bylaws or by agreement, to the extent authorized in the
corporation's articles.
The Restated Articles of Incorporation of the Registrant provide that: "The
liability of the directors of the Corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law." The effect
of this provision is to exculpate directors from any liability to the
Registrant, or anyone claiming on the Registrant's behalf, for breaches of the
directors' duty of care. However, the provision does not eliminate or limit the
liability of a director for actions taken in his capacity as an officer. In
addition, the provision applies only to monetary damages and is not intended to
impair the rights of parties suing on behalf of the Registrant to seek equitable
remedies (such as actions to enjoin or rescind a transaction involving a breach
of the directors' duty of care or loyalty).
The Bylaws of the Registrant provide that, subject to certain
qualifications, "(i) The corporation shall indemnify its Officers and Directors
to the fullest extent permitted by law, including those circumstances in which
indemnification would otherwise be discretionary; (ii) the corporation is
required to advance expenses to its Officers and Directors as incurred,
including expenses relating to obtaining a determination that such Officers and
Directors are entitled to indemnification, provided that they undertake to repay
the amount advanced if it is ultimately determined that they are not entitled to
indemnification; (iii) an Officer or Director may bring suit against the
corporation if a claim for indemnification is not timely paid; (iv) the
corporation may not retroactively amend this Section 1 in a way which is adverse
to its Officers and Directors; (v) the provisions of subsections (i) through
(iv) above shall apply to all past and present Officers and Directors of the
corporation." "Officer" includes the following officers of the Registrant:
Chairman of the Board, President, Vice President, Secretary, Assistant
Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer and such
other officers as the board shall designate from time to time. "Director" of the
Registrant means any person appointed to serve on the Registrant's board of
directors either by its shareholders or by the remaining board members.
Each of the Registrant's 1996 Stock Option Plan and its 1997 Directors'
Stock Plan (each individually, the "Plan") provides that, subject to certain
conditions, "The Company shall, through the purchase of insurance or otherwise,
indemnify each member of the Board (or board of directors of any affiliate),
each member of the [Compensation] Committee, and any [other] employees to whom
any responsibility with respect to the Plan is allocated or delegated, from and
against any and all claims, losses, damages, and expenses, including attorneys'
fees, and any liability, including any amounts paid in settlement with the
Company's approval, arising from the individual's action or failure to act,
except when the same is judicially determined to be attributable to the gross
negligence or willful misconduct of such person."
ITEM 16. EXHIBITS.
1 Form of Underwriting Agreement.
4.1 Form of Senior Indenture.
4.2 Form of Senior Debenture.
5 Opinion of White & Case LLP regarding validity of the Senior Debentures.
12 Statement re computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of White & Case LLP (contained in Exhibit 5).
24 Power of Attorney.
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Wilmington Trust Company to act as trustee under the Senior Debentures.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or 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.
(2) 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.
(3) 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.
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, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim of
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
* * *
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Santa Ana, state of California, on March 11, 1998.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By:/s/ Parker S. Kennedy
---------------------
Parker S. Kennedy, President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: March 11, 1998 By:/s/ D.P. Kennedy
----------------
D.P. Kennedy, Chairman and Director
Date: March 11, 1998 By:/s/ Parker S. Kennedy
---------------------
Parker S. Kennedy, President and Director
Date: March 11, 1998 By:/s/ Thomas A. Klemens
---------------------
Thomas A. Klemens, Executive Vice
President, Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: March 11, 1998 By:/s/ George L. Argyros*
----------------------
George L. Argyros, Director
Date: March 11, 1998 By:/s/ Gary J. Beban*
------------------
Gary J. Beban, Director
Date: March 11, 1998 By:/s/ J. David Chatham*
---------------------
J. David Chatham, Director
Date: March 11, 1998 By:/s/ William G. Davis*
---------------------
William G. Davis, Director
Date: March 11, 1998 By:/s/ James L. Doti*
------------------
James L. Doti, Director
Date: March 11, 1998 By:/s/ Lewis W. Douglas, Jr.*
--------------------------
Lewis W. Douglas, Jr., Director
Date: March 11, 1998 By:/s/ Paul B. Fay, Jr.*
---------------------
Paul B. Fay, Jr., Director
Date: March 11, 1998 By:/s/ Dale F. Frey*
-----------------
Dale F. Frey, Director
Date: March 11, 1998 By:/s/ Anthony R. Moiso*
---------------------
Anthony R. Moiso, Director
Date: March 11, 1998 By:/s/ Rudolph J. Munzer*
----------------------
Rudolph J. Munzer, Director
Date: March 11, 1998 By:/s/ Frank O'Bryan*
------------------
Frank O'Bryan, Director
Date: March 11, 1998 By:/s/ Roslyn B. Payne*
--------------------
Roslyn B. Payne, Director
Date: March __, 1998 By:______________________
D. Van Skilling, Director
Date: March 11, 1998 By:/s/ Virginia Ueberroth*
-----------------------
Virginia Ueberroth, Director
*By:/s/ Mark R Arnesen
Mark R Arnesen
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1 Form of Underwriting Agreement.
4.1 Form of Senior Indenture.
4.2 Form of Senior Debenture.
5 Opinion of White & Case LLP regarding validity of the Senior
Debentures.
12 Statement re computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of White & Case LLP (contained in Exhibit 5).
24 Power of Attorney.
25 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Wilmington Trust Company to act as trustee
under the Senior Debentures.
EXHIBIT 1
THE FIRST AMERICAN FINANCIAL CORPORATION
---------------------------
$100,000,000
_____% Senior Debentures due 2028
UNDERWRITING AGREEMENT
March __, 1998
CHASE SECURITIES INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
c/o Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017-2070
Ladies and Gentlemen:
The First American Financial Corporation, a California corporation (the
"Company"), proposes to issue and sell $100,000,000 of its __% Senior Debentures
due 2028 (the "Senior Debentures"). The Senior Debentures are to be issued under
an Indenture to be dated as of March __, 1998 (the "Indenture") by and between
the Company and Wilmington Trust Company, as trustee (the "Trustee"), the form
of which has been filed as an exhibit to the Registration Statement (as defined
herein). This is to confirm the agreement concerning the purchase of the Senior
Debentures from the Company by Chase Securities Inc. (the "Representative") and
First Chicago Capital Markets, Inc. (together with the Representative, the
"Underwriters").
Section 1. Representations and Warranties. The Company represents and
warrants to and agrees with the Underwriters that:
(a) A registration statement on Form S-3 (No. 333-________), including
a form of prospectus, relating to the Senior Debentures has been prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and has been filed by the Company with the Commission
(such registration statement, the "Initial Registration Statement"). The
Company may have filed one or more amendments thereto, including the
related Preliminary Prospectus (as defined herein), each of which has
previously been furnished to you. The Company will next file with the
Commission either (i) prior to effectiveness of such Initial Registration
Statement, a further amendment to such Initial Registration Statement
(including the form of final prospectus) or (ii) after effectiveness of
such Initial Registration Statement, (a) a second registration statement,
if any, increasing the size of the offering (a "Rule 462(b) Registration
Statement") prepared and filed in accordance with Rule 462(b) of the Rules
and Regulations, and/or (b) a final prospectus in accordance with Rules
430A and 424(b)(1) or (4). In the case of clause (ii) above, the Company
will have included in such Initial Registration Statement, as amended at
the Effective Time (as defined herein), all information (other than
information permitted to be omitted from the Initial Registration Statement
when it becomes effective pursuant to Rule 430A ("Rule 430A Information"))
required by the Securities Act and the Rules and Regulations to be included
in the final prospectus with respect to the Senior Debentures and the
offering thereof. As filed, such amendment and form of final prospectus, or
such final prospectus, shall contain all Rule 430A Information, together
with all other such required information with respect to the Senior
Debentures and the offering thereof, and, except to the extent the
Representative shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Underwriters prior to the
execution of this Agreement or, to the extent not completed at such time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as the Company
has advised you, prior to the execution of this Agreement, will be included
or made therein. For purposes of this Agreement, "Effective Time" means (i)
with respect to the Initial Registration Statement, the date and time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any was declared effective by the Commission and (ii)
with respect to the Rule 462(b) Registration Statement, the date and time
as of which such registration statement is filed with the Commission, and
"Effective Time" is the collective reference to the dates and times both
the Initial Registration Statement and the Rule 462(b) Registration
Statement became effective. "Preliminary Prospectus" means each prospectus
included in such registration statement, or amendments thereof, before such
registration statement becomes effective under the Securities Act, any
prospectus filed with the Commission by the Company pursuant to Rule
424(a), and the prospectus included in the Registration Statement at the
Effective Time that omits Rule 430A Information. "Registration Statement"
means both the Initial Registration Statement and any Rule 462(b)
Registration Statement at their respective Effective Times, including in
each case any documents incorporated by reference therein at such time and
all Rule 430A Information, if any, and the form of prospectus relating to
the Senior Debentures, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) or, if no such filing is required, as
included in the Registration Statement, is hereinafter referred to as the
"Prospectus." Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer and include any document filed under the Exchange Act after the
date of such Preliminary Prospectus or the Prospectus, as the case may be.
Reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant
to Section 13(a) or 15(d) of the Exchange Act after the Effective Time that
is incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus. The documents incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Prospectus (the
"Exchange Act Reports"), when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the
Registration Statement and the Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(b) (i) At the Effective Time, the Registration Statement did or will,
the Prospectus, if not required to be filed pursuant to Rule 424(b), will,
or otherwise the Preliminary Prospectus did, (ii) when the Prospectus (and
any amendments or supplements thereto) is first filed (if required) in
accordance with Rule 424(b), such Prospectus (and any amendments or
supplements thereto) will, and (iii) on the Closing Date, the Prospectus
(and any amendments or supplements thereto) will, in the case of each of
clauses (i), (ii), and (iii), comply in all material respects with the
applicable requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the respective rules
and regulations thereunder; at the Effective Time, the Registration
Statement did not or will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; at the
Effective Time and on the Closing Date, the Indenture did or will comply in
all material respects with the applicable requirements of the Trust
Indenture Act and the rules and regulations of the Commission thereunder;
and at the Effective Time, on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Preliminary Prospectus or the
Prospectus (together with any supplement thereto), as the case may be, did
not or will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The preceding sentence does not apply to (x) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act or
(y) information contained in or omitted from the Registration Statement or
the Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company through
the Representative by or on behalf of the Underwriters specifically for use
therein (the "Underwriters' Information").
(c) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of California with the
power and authority to own, lease and operate its properties, to conduct
its business and to execute, deliver and perform its obligations under the
Indenture, the Senior Debentures and this Agreement (the "Transaction
Documents"). Each subsidiary of the Company that is listed on Schedule A
hereto (such subsidiaries collectively called the "Material Subsidiaries")
is a corporation duly incorporated or organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization with power and authority to own, lease and operate its
properties and conduct its business.
(d) The Company and the Material Subsidiaries are duly qualified in or
licensed to transact business by, and are in good standing as foreign
corporations in, each jurisdiction in which they own or lease real
property, maintain an office or conduct their respective businesses and in
which the failure, individually or in the aggregate with all other failures
to be so licensed or qualified or to be in good standing, would reasonably
be expected to have a material adverse effect on the condition (financial
or otherwise), results of operations or business of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect").
(e) As of December 31, 1997, the Company had a duly authorized, issued
and outstanding capitalization as set forth in the Prospectus under the
caption "Capitalization".
(f) All of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and nonassessable. All of the outstanding shares of capital stock of each
Material Subsidiary (other than First American Title Guaranty Holding
Company, First American Home Buyers Protection Corporation and First
American Real Estate Solutions LLC) have been duly and validly authorized
and issued, are fully paid and nonassessable and are owned, directly or
indirectly, by the Company free and clear of any pledge, lien, security
interest, charge, claim, restriction on voting or transfer or encumbrance
of any kind, except that the transfer of ownership of the capital stock of
First American Title Insurance Company is subject to the prior approval of
the California Department of Insurance. The Company owns 80% of the issued
and outstanding shares of the capital stock of First American Title
Guaranty Holding Company ("FATGHC"). The Company owns 79% of the issued and
outstanding shares of the capital stock of First American Home Buyers
Protection Corporation ("FAHBPC"). The Company owns 80% of the membership
interests in First American Real Estate Solutions LLC ("FARESLLC"). The
outstanding shares of the capital stock of FATGHC and FAHBPC that are owned
by the Company have been duly and validly authorized and issued, are fully
paid and are nonassessable, and are owned, indirectly, by the Company free
and clear of any pledge, lien, security interest, charge, claim,
restriction on voting or transfer or encumbrance of any kind, except that
the holders of the minority interests in FATGHC and FAHBPC have the right
to "put" their minority interests to First American Title Insurance Company
in 1998 and have advised the Company that they intend to do so. All of the
Company's capital contributions required by FARESLLC's operating agreement
have been made and no future capital contributions are required of the
Company or any of its Subsidiaries. Under certain circumstances, the
holders of the minority membership interests in FARESLLC have the right to
"put" their minority interests to the Company and the Company has the right
to "call" such minority interests.
(g) The Company has full right, power and authority to execute and
deliver the Transaction Documents and to perform its obligations
thereunder; and all action required to be taken by the Company for the due
and proper authorization, execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated thereby
have been duly and validly taken.
(h) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law) (the
"Enforceability Exceptions").
(i) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the Company in
accordance with its terms, and assuming due authorization, execution and
delivery thereof by the Indenture Trustee, will constitute a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
the Enforceability Exceptions.
(j) The Senior Debentures have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as provided in
the Indenture, and the Company Order, dated as of the Closing Date, will be
duly and validly issued and outstanding and will constitute valid and
legally binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by the Enforceability
Exceptions.
(k) The Transaction Documents conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus.
(l) Price Waterhouse LLP, who is reporting upon the financial
statements incorporated by reference in the Prospectus, are and were
independent public accountants as required by the Securities Act and the
Rules and Regulations during the periods covered by the financial
statements which are incorporated by reference in the Registration
Statement and the Prospectus.
(m) The consolidated financial statements of the Company incorporated
by reference in the Registration Statement and the Prospectus fairly
present in all material respects the financial condition of the Company and
its consolidated subsidiaries as of the respective dates indicated and the
consolidated results of operations and changes in shareholders' equity of
the Company and its consolidated subsidiaries for the periods specified.
The consolidated financial statements of the Company incorporated by
reference in the Registration Statement and the Prospectus have been
prepared in all material respects in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as indicated in the notes thereto), and the
supporting schedules, if any, incorporated by reference in the Registration
Statement and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The summary historical
consolidated financial data of the Company included in the Registration
Statement and the Prospectus fairly present in all material respects the
information shown therein and have been compiled on a basis consistent with
that of the consolidated audited financial statements of the Company
incorporated by reference in the Registration Statement and the Prospectus.
(n) The execution, delivery and performance by the Company of the
Transaction Documents, the issuance, authentication, sale and delivery of
the Senior Debentures and compliance by the Company with the terms thereof
and hereof and the consummation of the transactions contemplated thereby
and hereby will not conflict with or result in a breach or violation of any
of the material terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries or
pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company
or any of its Material Subsidiaries, or any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of its Material
Subsidiaries or any of their properties or assets; and no consent,
approval, authorization or order of, or filing or registration with, any
such court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for the
execution, delivery and performance by the Company of the Transaction
Documents, the issuance, authentication, sale and delivery of the Senior
Debentures and compliance by the Company with the terms thereof and hereof
and the consummation of the transactions contemplated thereby and hereby
except for (i) the registration of the Senior Debentures under the
Securities Act, (ii) the qualification of the Indenture under the Trust
Indenture Act, (iii) such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Senior Debentures by the Underwriters and (iv) such
consents, approvals, authorizations, orders, filings, registrations or
qualifications which shall have been obtained or made prior to the Closing
Date.
(o) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as amended or supplemented,
except as may be otherwise stated therein (i) there has been no material
adverse change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs, management or business prospects of the Company, whether
or not arising in the ordinary course of business, (ii) the Company has not
incurred any material liability or obligation, direct or contingent, other
than in the ordinary course of business, (iii) the Company has not entered
into any material transaction other than in the ordinary course of business
and (iv) except for the issuance of [57,105] shares of the Company's common
stock pursuant to its stock bonus plans, there has not been any change in
the capital stock or long-term debt of the Company, or any dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock. There are no contracts or other documents which are
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or filed as exhibits to the Registration
Statement which have not been so described or filed.
(p) There is no legal or governmental proceeding pending to which the
Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which,
singularly or in the aggregate, if determined adversely to the Company or
any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and to the best knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(q) No action has been taken and no statute, rule, regulation or order
has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Senior Debentures or suspends the sale
of the Senior Debentures in any jurisdiction; no injunction, restraining
order or order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of its
subsidiaries which would prevent or suspend the issuance or sale of the
Senior Debentures or the use of the Preliminary Prospectus or the
Prospectus in any jurisdiction; no action, suit or proceeding is pending
against or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or
foreign, which could reasonably be expected to interfere with or adversely
affect the issuance of the Senior Debentures or in any manner draw into
question the validity or enforceability of or any action taken or to be
taken pursuant thereto; and the Company has complied with any and all
requests by any securities authority in any jurisdiction for additional
information to be included in the Preliminary Prospectus and the
Prospectus.
(r) Neither the Company nor any of its Material Subsidiaries is (i) in
violation of its charter or by-laws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any material term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject or (iii) in violation in
any material respect of any law, ordinance, governmental rule, regulation
or court decree to which it or its property or assets may be subject.
(s) The Company and each of its subsidiaries holds such licenses,
certificates, consents, orders, approvals, permits and other authorizations
from governmental authorities (including, without limitation, insurance
licenses from the insurance regulatory agencies of the various states where
it conducts business ("Insurance Licenses")) which are necessary to own or
lease, as the case may be, and to operate their respective properties and
to carry on their respective business as presently conducted, except for
such licenses, certificates, consents, orders, approvals, permits or other
authorizations the failure to hold which could not reasonably be expected
to have a Material Adverse Effect; the Company and each of its subsidiaries
has fulfilled and performed all obligations necessary to maintain such
licenses, certificates, consents, orders, approvals, permits and other
authorizations (including, without limitation, the Insurance Licenses),
except where the failure to so fulfill or perform such obligations could
not reasonably be expected to have a Material Adverse Effect. There is no
pending, or to the best knowledge of the Company threatened, action, suit,
proceeding or investigation (and, to the best knowledge of the Company, no
facts exist which the Company believes could reasonably be the basis for
any such action, suit, proceeding or investigation) that may reasonably be
expected to lead to the revocation, termination or suspension of any such
license, certificate, consent, order, approval, permit or other
authorization (including, without limitation, the Insurance Licenses),
except where such revocation, termination or suspension could not
reasonably be expected to have a Material Adverse Effect; and no insurance
regulatory agency or body has issued any order or decree restricting or
prohibiting the payment of dividends by the Company's insurance company
subsidiaries to the Company.
(t) All ceded reinsurance and retrocessional agreements to which the
Company's insurance company subsidiaries are a party are in full force and
effect. Neither the Company nor any of such subsidiaries has received any
notice from any of the other parties to such agreements that such other
party intends not to perform in any material respect such agreement and
none of the Company and such subsidiaries has any reason to believe that
any of the other parties to such agreements will be unable to perform such
agreements, except to the extent that (i) the Company or such subsidiary
has established appropriate reserves on its financial statements or (ii)
such nonperformance could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect; and each of the Company
and its insurance company subsidiaries is entitled to give effect in its
underwriting results in its most recently filed statutory financial
statements in conformity with the insurance department of the state of
domicile of each such subsidiary in effect at such time of preparation for
reinsurance ceded pursuant to such agreements.
(u) The Company is not, and is not directly or indirectly controlled
by, or acting on behalf of any person which is, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(v) Other than pursuant to this Agreement or as disclosed in the
Prospectus under the caption "Underwriting", there are no contracts,
agreements or understandings between the Company and any person that give
rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.
(w) Except as described in the Registration Statement and the
Prospectus and except for common share piggyback registration rights
granted to John B. Ward in respect of the 137,143 shares of the Company's
common stock received by him as partial consideration for the sale of
Nationwide Field Services-Ward Associates, Inc. to the Company, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the Registration Company
Statement.
Section 2. Purchase by the Underwriters. On the basis of the
representations, warranties and agreements herein contained, and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the aggregate principal
amount of Senior Debentures set forth opposite the name of such Underwriter on
Schedule I hereto at a purchase price equal to ____% of the principal amount
thereof, plus accrued and unpaid interest, if any, from the date of issuance.
The Company shall not be obligated to deliver any of the Senior Debentures
except upon payment for all the Senior Debentures to be purchased as provided
herein. The Company acknowledges and agrees that each Underwriter may sell
Senior Debentures to any of its affiliates and that any such affiliate may sell
Senior Debentures purchased by it to an Underwriter.
Section 3. Delivery of and Payment for the Senior Debentures. (a) Payment
of the purchase price for, and delivery of certificates for, the Senior
Debentures shall be made at the offices of Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York 10017, at 10:00 A.M., New York City time,
on __________, 1998 or such later date and time not more than seven full
business days thereafter as shall be agreed upon by the Representative and the
Company (such date and time of payment and delivery being herein called the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the Senior
Debentures shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Representative for the account of
each Underwriter through the book-entry facilities of The Depository Trust
Company ("DTC") of the certificates evidencing the Senior Debentures. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of the Underwriters
hereunder. Upon delivery, the Senior Debentures will be represented by a
permanent global certificate registered in the name of Cede & Co., as nominee
for DTC. The Company agrees to make the global certificate evidencing the Senior
Debentures available for inspection by the Representative in New York, New York,
at least 24 hours prior to the Closing Date.
(c) It is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Senior Debentures that it has agreed to
purchase. You may (but shall not be obligated to) make payment of the purchase
price for the Senior Debentures to be purchased by any Underwriter whose funds
shall not have been received by the Closing Date, but such payment shall not
relieve such Underwriter from its obligations hereunder.
Section 4. Further Agreements of the Company. The Company agrees with each
of the Underwriters as follows:
(a) That, if the Effective Time is prior to the execution and delivery
of this Agreement, to prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representative and to file such Rule
462(b) Registration Statement with the Commission on the date hereof, to
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) of Rule 424(b) (or, if applicable and if consented to by
the Representative, subparagraph (4) of Rule 424(b)) within the time period
prescribed by such rule, and provide evidence satisfactory to the
Representative of such timely filing;
(b) To file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a Prospectus is required in connection with the offering of the
Senior Debentures;
(c) Prior to filing with the Commission any (i) Preliminary
Prospectus, (ii) amendment to the Registration Statement or supplement to
the Prospectus, (iii) any document incorporated by reference in the
Prospectus or (iv) any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representative and counsel
for the Underwriters, and not to file any such document to which the
Representative shall reasonably object after having been given reasonable
notice of the proposed filing thereof unless the Company is required by law
to make such filing.
(d) To advise the Representative promptly of the receipt of any
comments from the Commission and of the effectiveness of the Registration
Statement (in each case if the Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplement to the Registration Statement or the Prospectus, or of any
request by the Commission therefor, and of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; to advise
the Representative promptly of any order preventing or suspending the use
of any prospectus relating to the Senior Debentures, of the suspension of
the qualification of the Senior Debentures for offering or sale in any
jurisdiction, and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance of
any stop order or of any such order preventing or suspending the use of any
prospectus relating to the Senior Debentures or suspending any such
qualification and, if any such stop order or order of suspension is issued,
to obtain the lifting thereof at the earliest possible time;
(e) To furnish promptly to the Representative and counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith; and to
deliver promptly without charge to the Underwriters such number of the
following documents as the Underwriters from time to time may reasonably
request: (i) conformed copies of the Registration Statement as originally
filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement, the Indenture and the
computation of the ratio of earnings to fixed charges), (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto);
(f) If the delivery of a prospectus is required at any time in
connection with the sale of the Senior Debentures and if at such time any
events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or if for any other
reason it shall be necessary at such time to amend or supplement the
Prospectus in order to comply with the Securities Act or the Exchange Act,
then to notify the Representative immediately thereof, and promptly to
prepare and, subject to Section 4(c) hereof, file with the Commission an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance;
(g) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission or advisable in connection with the distribution of the Senior
Debentures;
(h) As soon as practicable to make generally available to the
Company's security holders and to deliver to the Representative an earning
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including Rule 158);
(i) For so long as any of the Senior Debentures are outstanding, to
furnish to the Underwriters copies of any annual reports, quarterly reports
and current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and all such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the Senior
Debentures pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(j) Promptly, from time to time, to take such action as the
Representative may reasonably request to qualify the Senior Debentures for
offering and sale under the securities laws of such jurisdictions as the
Representative may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Senior Debentures;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation in any jurisdiction in which they are not
so qualified or to file a general consent to service of process in any
jurisdiction;
(k) The Company shall apply the net proceeds of its sale of the Senior
Debentures as set forth in the Prospectus;
(l) In connection with the offering of the Senior Debentures, until
the Representative on behalf of the Underwriters shall have notified the
Company of the completion of the distribution of the Senior Debentures, not
to, and to cause its affiliated persons (as defined in Regulation M under
the Exchange Act) not to, either alone or with other persons, bid for or
purchase, for any account in which it or any of its affiliated persons has
a beneficial interest, any Senior Debentures, or attempt to induce any
person to purchase Senior Debentures; and not to, and to cause its
affiliated purchasers not to, make bids or purchase for the purpose of
creating actual, or apparent, active trading in or of raising the price of
the Senior Debentures;
(m) For a period of 30 days from the date of the Prospectus, not to
offer for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offering
of, any debt securities (or securities convertible into debt securities) of
the Company (other than the Senior Debentures in connection herewith)
without the prior written consent of the Representative;
(n) In connection with the offering of the Senior Debentures, the
Company agrees to make its officers, trustees, independent accountants and
legal counsel reasonably available upon request by the Underwriters;
(o) The Company will do and perform all things required to be done and
performed by it under this Agreement that are within its control prior to
or after the Closing Date, and to use its reasonable best efforts to
satisfy all conditions precedent on its part to the delivery of the Senior
Debentures; and
(p) Not to, for so long as the Senior Debentures are outstanding, be
or become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder.
Section 5. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
on and as of the date hereof and the Closing Date, of the representations and
warranties of the Company contained herein, to the accuracy of the statements of
the Company and its officers made in any certificates delivered pursuant hereto,
to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, then the Registration Statement shall have become
effective and the Indenture shall have been qualified under the Trust
Indenture Act, and the Representative shall have received notice thereof,
not later than (i) 6:00 P.M. New York City time, on the date of
determination of the public offering price, if such determination occurred
at or prior to 3:00 P.M., New York City time, on such date or (ii) 12:00
Noon, New York City time, on the business day following the day on which
the offering price was determined if such determination occurred after 3:00
P.M., New York City time, on such date. If the Effective Time is prior to
the execution and delivery of this Agreement, then the Prospectus shall
have been timely filed with the Commission in accordance with Section of
this Agreement. Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Representative.
(b) The Prospectus (and any amendments or supplements thereto) shall
have been printed and copies distributed to the Underwriters as promptly as
practicable on or following the date of this Agreement or at such other
date and time as to which the Underwriters may agree.
(c) None of the Underwriters shall have discovered and disclosed to
the Company on or prior to the Closing Date that the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Underwriters, is material or omits
to state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(d) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents, the
Registration Statement and the Prospectus, and all other legal matters
relating thereto and the transactions contemplated thereby, shall be
satisfactory in all material respects to the Underwriters, and the Company
shall have furnished to the Underwriters and their counsel all documents
and information that the Underwriters or their counsel may reasonably
request to enable them to pass upon such matters.
(e) White & Case LLP shall have furnished to the Underwriters their
written opinion, as counsel to the Company, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory
to the Underwriters substantially to the effect set forth in Annex A
hereto.
(f) Craig I. DeRoy shall have furnished to the Underwriters his
written opinion, as General Counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters, substantially in the form of Annex B
hereto.
(g) The Underwriters shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents and information as the Underwriters or their counsel
reasonably request for the purpose of enabling them to pass upon such
matters.
(h) The Company shall have furnished to the Underwriters a letter (the
"Initial Letter") of Price Waterhouse LLP, addressed to the Underwriters
and dated the date hereof, in form and substance satisfactory to the
Underwriters, substantially to the effect set forth in Annex C hereto.
(i) The Company shall have furnished to the Underwriters a letter (the
"BringDown Letter") of Price Waterhouse LLP, addressed to the Underwriters
and dated the Closing Date (i) confirming that they are independent public
accountants with respect to the Company and its subsidiaries within the
meaning of the Securities Act, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
business days prior to the date of the Bring-Down Letter), that the
conclusions and findings of such accountants with respect to the financial
information and other matters covered by the Initial Letter are accurate
and (iii) confirming in all material respects the conclusions and findings
set forth in the Initial Letter.
(j) The Company shall have furnished to the Underwriters a
certificate, dated the Closing Date, of its president and its chief
financial officer stating that (A) such officers have carefully examined
the Registration Statement and the Prospectus, (B) in their opinion, the
Registration Statement, as of the Effective Time, did not, and the
Prospectus as of its date and as of the Closing Date, did not and does not,
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and since the Effective Time, no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus so that the Registration Statement
and the Prospectus (as so amended or supplemented) would not include any
untrue statement of a material fact and would not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading and since the Effective Time no event has
occurred which should have been set forth in an amendment or supplement to
the Registration Statement or the Prospectus and (C) as of the Closing
Date, the representations and warranties of the Company in this Agreement
are true and correct in all material respects, the Company has complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder on or prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the
best knowledge of such person, are contemplated by the Commission and
subsequent to the date of the most recent financial statements contained or
incorporated by reference in the Registration Statement and the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company or any of its subsidiaries, or any
change, or any development including a prospective change, in or affecting
the condition (financial or otherwise), results of operations or business
of the Company and its subsidiaries taken as a whole, except as set forth
in the Prospectus.
(k) The Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Senior Debentures shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(l) If any event shall have occurred that requires the Company under
Section 4(e) to prepare an amendment or supplement to the Prospectus, such
amendment or supplement shall have been prepared, the Underwriters shall
have consented to its use, and copies thereof shall have been delivered to
the Underwriters reasonably in advance of the Closing Date.
(m) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment or supplement thereto) and the
Prospectus (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations or business
or prospects of the Company and its subsidiaries taken as a whole, the
effect of which, in any such case described above, is, in the judgment of
the Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Senior Debentures
on the terms and in the manner contemplated by this Agreement and in the
Prospectus (exclusive of any amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Senior Debentures; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Senior Debentures.
(o) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Senior
Debentures or any of the Company's debt securities or preferred stock by
any "nationally recognized statistical rating organization", as such term
is defined by the Commission for purposes of Rule 436(g)(2) of the Rules
and Regulations and (ii) no such organization shall have publicly announced
that it has under surveillance or review (other than an announcement with
positive implications of a possible upgrading), its rating of the Senior
Debentures or any of the Company's debt securities or preferred stock.
(p) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Company on any exchange or in the over-the-counter market shall have
been suspended or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York State authorities or (iii)
an outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or (iv) a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv), is, in
the judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or the delivery of
the Senior Debentures on the terms and in the manner contemplated by this
Agreement and in the Prospectus (exclusive of any amendment or supplement
thereto).
6. Effectiveness and Termination. This Agreement shall become effective
upon the later of when (i) the Underwriters and the Company shall have received
notification of the effectiveness of the Registration Statement or (ii) the
execution of this Agreement. The obligations of the Underwriters hereunder may
be terminated by the Underwriters, in their absolute discretion, by notice given
to and received by the Company prior to delivery of and payment for the Senior
Debentures, if, prior to that time, any of the events described in Section 5(m),
(n), (o) or (p) shall have occurred and be continuing.
7. Defaulting Underwriters. (a) If, on the Closing Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
non-defaulting Underwriters may make arrangements for the purchase of the Senior
Debentures which such defaulting Underwriter agreed but failed to purchase by
other persons satisfactory to the Company and the non-defaulting Underwriters,
but if no such arrangements are made within 36 hours after such default, this
Agreement shall terminate without liability on the part of the non-defaulting
Underwriters, or the Company, except that the Company will continue to be liable
for the payment of expenses of the non-defaulting Underwriters to the extent set
forth in Sections 8 and 12 hereof and except that the provisions of Sections 9
and 10 hereof as they relate to non-defaulting Underwriters shall not terminate
and shall remain in effect. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context otherwise
requires, any party not listed in Schedule 1 hereto that, pursuant to this
Section 7, purchases Senior Debentures which a defaulting Underwriter agreed but
failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or any non-defaulting Underwriter for
damages caused by its default. If other persons are obligated or agree to
purchase the Senior Debentures of a defaulting Underwriter, either the
non-defaulting Underwriters or the Company may postpone the Closing Date for up
to seven full business days in order to effect any changes that in the opinion
of counsel for the Company or counsel for the Underwriters may be necessary in
the Registration Statement, the Prospectus or in any other document or
arrangement, and the Company agrees to file promptly any amendment or supplement
to the Registration Statement or the Prospectus that effects any such changes.
8. Reimbursement of Underwriters' Expenses. If (a) this Agreement shall
have been terminated pursuant to Section 7, (b) the Company shall fail to tender
any of the Senior Debentures for delivery to the Underwriters for any reason
permitted under this Agreement or (c) the Underwriters shall decline to purchase
the Senior Debentures for any reason permitted under this Agreement, the Company
shall reimburse the Underwriters for such out-of-pocket expenses (including
reasonable fees and disbursements of counsel) as shall have been reasonably
incurred by the Underwriters in connection with this Agreement and the proposed
purchase and resale of the Senior Debentures. If this Agreement is terminated
pursuant to Section 7 by reason of the default of one or more of the
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of such expenses.
9. Indemnification. (a) The Company shall indemnify and hold harmless each
Underwriter, its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 9(a) and Section 10 as an
Underwriter), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Senior Debentures), to which that Underwriter may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and shall reimburse
each Underwriter promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with any Underwriters' Information; and provided, further, that with
respect to any such untrue statement in or omission from any Preliminary
Prospectus, the indemnity agreement contained in this Section 9(a) shall not
inure to the benefit of any such Underwriter to the extent that the sale to the
person asserting any such loss, claim, damage, liability or action was an
initial resale by such Underwriter and any such loss, claim, damage, liability
or action of or with respect to such Underwriter results from the fact that both
(A) to the extent required by applicable law, a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the sale
of such Senior Debentures to such person and (B) the untrue statement in or
omission from such Preliminary Prospectus was corrected in the Prospectus
unless, in either case, such failure to deliver the Prospectus was a result of
non-compliance by the Company with the provision of Section 4(e).
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers who sign the Registration Statement, its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act (collectively referred to for purposes
of this Section 9(b) and Section 10 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Underwriters' Information provided
by such Underwriter and shall reimburse the Company promptly upon demand for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 9(a) or 9(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 9 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding and contains no findings of fault or culpability or failure
to act by or on behalf of the indemnified party.
The obligations of the Company and the Underwriters in this Section 9 and
in Section 10 are in addition to any other liability that the Company or the
Underwriters, as the case may be, may otherwise have, including in respect of
any breaches of representations, warranties and agreements made herein by any
such party.
10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Senior Debentures or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Senior Debentures
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Senior Debentures
purchased under this Agreement, on the other, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to the Company or information supplied by the Company on
the one hand or to any Underwriters' Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total underwriting discounts and commissions
received by such Underwriter with respect to the Senior Debentures purchased by
it under this Agreement exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10 are several in proportion to their respective
underwriting commitments and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except as provided in Sections 9 and
10 with respect to affiliates, officers, trustees, directors, employees,
representatives, agents and controlling persons of the Company and the
Underwriters. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 11, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein. The term "successors" shall not include a
purchaser of any of the Senior Debentures from any Underwriter merely because of
such purchase.
12. Expenses. The Company agrees with the Underwriters to pay (a) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Senior Debentures and any taxes payable in that connection; (b) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, all Preliminary Prospectuses and the Prospectus and any
amendments and exhibits thereto (including the filing fees of the Commission);
(c) the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), any Preliminary Prospectus, the Prospectus and any
amendment or supplement to the Prospectus, all as provided in this Agreement;
(d) the costs of printing, reproducing and distributing the Indenture, the
Senior Debentures and this Agreement and any other underwriting and selling
group documents by mail, telex or other means of communications; (e) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Senior Debentures, including stamp duties and transfer taxes, if
any, payable upon issuance of the Senior Debentures; (f) the fees and expenses
of the Company's counsel and independent accountants; (g) the fees and expenses
of qualifying the Senior Debentures under the securities laws of the several
jurisdictions as provided in Section 4(i) and of preparing, printing and
distributing Blue Sky Memoranda (including related reasonable fees and expenses
of counsel for the Underwriters); (h) any fees charged by rating agencies for
rating the Senior Debentures; (i) the fees and expenses of the Trustee and any
paying agent (including related fees and expenses of any counsel to such
parties); (j) the cost of qualifying the Senior Debentures with DTC and other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that except as provided in this Section 12 and
Section 8, the Underwriters shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Senior Debentures and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
if to the Underwriters, shall be delivered or sent by mail or telecopy
transmission to Chase Securities Inc., 270 Park Avenue, New York, New York
10017, Attention: Mr. Louis DeCaro (telecopier no.: (212) 270-6170); or
if to the Company shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Prospectus,
Attention: Mark R Arnesen (telecopier no.: 714-836-1841);
provided that any notice to the Underwriters pursuant to Section 9(c) shall also
be delivered or sent by mail to the Representative at its address set forth on
the signature page hereof. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by the Representative.
15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Underwriters' Information. The parties hereto acknowledge and agree
that the Underwriters' Information consists solely of the following information
in the Preliminary Prospectus and the Prospectus: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Underwriters; (ii)
the legend on the inside front cover page concerning stabilizing activities by
the Underwriters; and (iii) the statements concerning the Underwriters contained
in [the second sentence of the fifth paragraph and paragraph seven] under the
heading "Underwriting".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this Agreement,
nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
20. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the Underwriters in
accordance with its terms.
Very truly yours,
THE FIRST AMERICAN FINANCIAL
CORPORATION
By__________________________
Name: Thomas A. Klemens
Title: Executive Vice President and Chief
Financial Officer
Accepted:
CHASE SECURITIES INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
By CHASE SECURITIES INC.
By____________________________
Authorized Signatory
Address for notices pursuant to Section 9(c):
Chase Securities Inc.
1 Chase Manhattan Plaza
25th Floor
New York, New York 10081
Attention: Legal Department
<PAGE>
SCHEDULE 1
Principal Amount
Underwriters of Senior Debentures
- ------------ --------------------
Chase Securities Inc. $
First Chicago Capital Markets, Inc. $___________________
Total $100,000,000
<PAGE>
SCHEDULE 2
Material Subsidiaries
---------------------
First American Trust Company
First American Title Insurance Company
First American Title Guaranty Holding Company
First American Home Buyers Protection Corporation
First American Title Insurance Company of New York
First American Flood Data Services, Inc.
First American Real Estate Information Services, Inc.
First American Real Estate Solutions LLC
<PAGE>
ANNEX A
Form of White & Case LLC Opinion
White & Case shall have furnished to the Underwriters their written
opinion, as counsel to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
substantially to the effect set forth below:
(a) The Company has full right, power and authority to execute and
deliver each of the Transaction Documents and to perform its obligations
thereunder; and all corporate action required to be taken for the due and
proper authorization, execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated thereby have been
duly and validly taken.
(b) This Agreement has been duly authorized, executed and delivered by
the Company.
(c) The Indenture has been duly authorized, executed and delivered by
the Company, and, assuming due authorization, execution and delivery
thereof by the Trustee, the Indenture constitutes a legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to the Enforceability Exceptions.
(d) The Senior Debentures have been duly authorized, executed, issued
and delivered by the Company and, when the Senior Debentures have been duly
authenticated by the Trustee and paid for by the Underwriters, will
constitute legal, valid and binding obligations of the Company, entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to the Enforceability Exceptions.
(e) Each Transaction Document conforms in all material respects to the
description thereof contained in the Prospectus.
(f) The statements set forth in the Prospectus under the caption
"Description of Senior Debentures", insofar as they purport to describe the
provisions of the law and documents referred to therein are accurate.
(g) Neither the Company nor any of its subsidiaries is an "investment
company" or a company "controlled by" an investment company within the
meaning of the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission thereunder, without taking account of any
exemption under the Investment Company Act of 1940, as amended, arising out
of the number of holders of the Company's securities.
(h) The Registration Statement was declared effective under the
Securities Act and the rules and regulations of the Commission thereunder
and the Indenture was qualified under the Trust Indenture Act at
[__________] on [__________], 1998; the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on [__________], 1998; and no stop
order suspending the effectiveness of the Registration Statement has been
issued and, to the best of such counsel's knowledge, no proceeding for that
purpose is pending or threatened by the Commission;
(i) The Registration Statement, as of the Effective Date, and the
Prospectus (including any amendments or supplements thereto), as of its
date(s) and as of the Closing Date, complied as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations and the Indenture complies as to form in all material respects
with the Trust Indenture Act and the rules and regulations of the
Commission thereunder, and the Exchange Act Reports complied as to form
when filed in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder (in the case
of the Registration Statement, the Prospectus and the Exchange Act Reports,
other than the financial statements and related schedules and the other
financial and statistical information contained therein, as to which such
counsel need express no opinion).
In addition, such counsel shall state that, although they have not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and do not assume any responsibility for the accuracy or
completeness of the statements in the Registration Statement and the
Prospectus (other than as set forth in paragraphs (e) and (f) above), as
counsel for the Company, they reviewed the documents incorporated by
reference therein (the "Exchange Act Documents"), participated in the
preparation of the Registration Statement and the Prospectus and in
discussions with representatives of the Company and its independent public
accountants and advised the Company as to the requirements of the
Securities Act and the applicable rules and regulations thereunder. Such
counsel shall also state that they reviewed certificates of certain
officers of the Company and the letter from the Company's independent
accountants. Such counsel shall state that nothing that came to their
attention that has caused them to believe that any part of the Registration
Statement (including the Exchange Act Documents) as of the Effective Date
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading or that the Prospectus as amended or
supplemented (including the Exchange Act Documents) as of its date(s) and
as of the Closing Date contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need not express an opinion with respect to the financial statements and
notes and schedules thereto or any other statistical or financial data
included therein).
<PAGE>
ANNEX B
[Form of Opinion of Craig I. DeRoy]
Craig I. DeRoy, shall have furnished to the Underwriters his written
opinion, as general counsel to the Company, addressed to the Underwriters and
dated the Closing Date, in form and substance reasonably satisfactory to the
Underwriters, substantially to the effect set forth below:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of California;
and the Company and each of its Material Subsidiaries is duly qualified or
licensed to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property, maintenance
of an office or the conduct of its businesses requires such qualification,
and has all power and authority necessary to own or hold its properties and
to conduct the businesses in which it is engaged (except where the failure
to so qualify or be licensed or have such power or authority would not,
singularly or in the aggregate, have a Material Adverse Effect).
(b) The Company has an authorized capitalization as set forth in the
Prospectus.
(c) All of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and were not issued in violation of the preemptive
rights of any other stockholder of the Company; and all of the issued and
outstanding shares of capital stock of each of the Company's Material
Subsidiaries (other than First American Title Guaranty Holding Company,
First American Home Buyers Protection Corporation and First American Real
Estate Solutions LLC) are owned of record by the Company or one or more of
its subsidiaries, and all such shares of such capital stock are duly and
validly issued, fully paid and non-assessable, except that the transfer of
ownership of the capital stock of First America Title Insurance Company is
subject to the prior approval of the California Department of Insurance.
The Company owns 80% of the issued and outstanding shares of the capital
stock of First American Title Guaranty Holding Company ("FATGHC"). The
Company owns 79% of the issued and outstanding shares of the capital stock
of First American Home Buyers Protection Corporation ("FAHBPC"). The
Company owns 80% of the membership interests in First American Real Estate
Solutions LLC ("FARESLLC"). The outstanding shares of the capital stock of
FATGHC and FAHBPC that are owned by the Company have been duly and validly
authorized and issued, are fully paid and are nonassessable, and are owned,
indirectly, by the Company free and clear of any pledge, lien, security
interest, charge, claim, restriction on voting or transfer or encumbrance
of any kind, except that the holders of the minority interests in FATGHC
and FAHBPC have the right to "put" their minority interests to First
American Title Insurance Company in 1998 and have advised the Company that
they intend to do so. All of the Company's capital contributions required
by FARESLLC's operating agreement have been made and no future capital
contributions are required of the Company or any of its Subsidiaries. Under
certain circumstances, the holders of the minority membership interests in
FARESLLC have the right to "put" their minority interests to the Company
and the Company has the right to "call" such minority interests.
(d) The execution, delivery and performance by the Company of the
Transaction Documents, the issuance, authentication, sale and delivery of
the Senior Debentures and compliance by the Company with the material terms
thereof and the consummation of the transactions contemplated thereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any of its subsidiaries or
by which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its Material Subsidiaries
or any statute or any judgment, order, decree, rule or regulation of any
court or arbitrator or governmental agency or body having jurisdiction over
the Company or any of its Material Subsidiaries or any of their properties
or assets; and no consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental agency
or body under any such statute, judgment, order, decree, rule or regulation
is required for the execution, delivery and performance by the Company of
the Indenture, the Senior Debentures and this Agreement, the issuance,
authentication, sale and delivery of the Senior Debentures and compliance
by the Company with the terms thereof and the consummation of the
transactions contemplated thereby, except for (i) the registration of the
Senior Debentures under the Securities Act, (ii) the qualification of the
Indenture under the Trust Indenture Act, (iii) such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Senior Debentures by the Underwriters
and (iv) such consents, approvals, authorizations, orders, filings,
registrations or qualifications which shall have been obtained or made
prior to the Closing Date.
(e) To the best knowledge of such counsel, there are no pending
actions or suits or judicial, arbitral, rule-making, administrative or
other proceedings to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of its
subsidiaries is the subject which (A) singularly or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect, (B) questions the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; or (C) which is required to
be disclosed in the Prospectus which is not so disclosed (and any such
proceeding as is disclosed in the Prospectus is accurately summarized in
all material respects) and, to the best knowledge of such counsel, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others. There are no contracts or other documents which are
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or filed as exhibits to the Registration
Statement which have not been so described or filed.
(f) Neither the Company nor any of its Material Subsidiaries is (A) in
violation of its charter or by-laws, (B) in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any material term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound or
to which any of its material property or assets is subject or (C) in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its material property or assets
may be subject.
<PAGE>
ANNEX C
[Form of Initial Letter]
The Company shall have furnished to the Underwriters a letter of Price
Waterhouse LLP, addressed to the Underwriters and dated the date of the
Underwriting Agreement, in form and substance satisfactory to the Underwriters,
substantially to the effect set forth below:
(a) they are independent certified public accountants with respect to
the Company within the meaning of the Securities Act;
(b) in their opinion, the audited financial statements included or
incorporated by reference in the Prospectus and reported on by them comply
in form in all material respects with the accounting requirements of the
Exchange Act and the related published rules and regulations of the
Commission thereunder (except that certain supporting schedules are
omitted);
(c) based upon a reading of the latest unaudited financial statements
made available by the Company, the procedures of the AICPA for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, reading of minutes and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters
and certain other limited procedures requested by the Underwriters and
described in detail in such letter, nothing has come to their attention
that causes them to believe that (A) any unaudited financial statements
included in the Registration Statement and the Prospectus do not comply as
to form in all material respects with applicable accounting requirements,
(B) any material modifications should be made to the unaudited financial
statements included in the Registration Statement and the Prospectus for
them to be in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus or (C) the information
included under the headings ["Summary--Summary Financial Data",
"Capitalization", "Selected Financial Data", "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and
"Management--Executive Compensation"] is not in conformity with the
disclosure requirements of Regulation S-K;
(d) based upon the procedures detailed in such letter with respect to
the period subsequent to the date of the last available balance sheet,
including reading of minutes and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters,
nothing has come to their attention that causes them to believe that (A) at
a specified date not more than three business days prior to the date of
such letter, there was any change in capital stock, increase in long-term
debt or decrease in net current assets as compared with the amounts shown
in the __________ unaudited balance sheet included or incorporated by
reference in the Prospectus or (B) for the period from __________, 199_ to
a specified date not more than five business days prior to the date of such
letter, there were any decreases, as compared with the corresponding period
in the preceding year, in net sales, income from operations, EBITDA or net
income, except in all instances for changes, increases or decreases that
the Prospectus discloses have occurred or which are set forth in such
letter, in which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said explanation is not
deemed necessary by the Underwriters; [and]
(e) they have performed certain other specified procedures as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company) set forth in the Prospectus agrees with the accounting records
of the Company, excluding any questions of legal interpretation [; and] [.]
[(f) on the basis of a reading of the unaudited pro forma financial
information included in the Registration Statement and the Prospectus,
carrying out certain specified procedures, reading of minutes and inquiries
of certain officials of the Company who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in the
pro forma financial information, nothing came to their attention which
caused them to believe that the pro forma financial information does not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such information.]
EXHIBIT 4.1
________________________________________________________________________________
------------------------------------
SENIOR INDENTURE
DATED AS OF _____________ __, 1998
------------------------------------
BETWEEN
THE FIRST AMERICAN FINANCIAL CORPORATION
AND
WILMINGTON TRUST COMPANY
AS TRUSTEE
________________________________________________________________________________
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317)
and the Senior Indenture, dated as of __________ ___, 1998.
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
ss. 310 (a) (1), (2) and (5)................................6.9
(a) (3).............................................Not Applicable
(a) (4).............................................Not Applicable
(b).................................................6.8
6.10
(c).................................................Not Applicable
ss.311 (a).................................................6.13(a)
(b).................................................6.13(b)
(b) (2).............................................7.3(a) (2)
7.3(a) (2)
ss.312 (a).................................................7.1
7.2(a)
(b).................................................7.2(b)
(c).................................................7.2(c)
ss.313 (a).................................................7.3(a)
(b).................................................7.3(b)
(c).................................................7.3(a), 7.3(b)
(d).................................................7.3(c)
ss.314 (a) (1), (2) and (3)................................7.4
(a) (4).............................................10.5
(b).................................................Not Applicable
(c) (1).............................................1.2
(c) (2).............................................1.2
(c) (3).............................................Not Applicable
(d).................................................Not Applicable
(e).................................................1.2
(f).................................................Not Applicable
ss.315 (a).................................................6.1(a)
(b).................................................6.2
7.3(a) (6)
(c).................................................6.1(b)
(d).................................................6.1(c)
(d) (1).............................................6.1(a) (1)
(d) (2).............................................6.1(c) (2)
(d) (3).............................................6.1(c) (3)
(e).................................................5.14
ss.316 (a).................................................1.1
(a) (1) (A).........................................5.12
(a) (1) (B).........................................5.13
(a) (2).............................................Not Applicable
(b).................................................5.8
(c).................................................1.4(f)
ss.317 (a) (1).............................................5.3
(a) (2).............................................5.4
(b).................................................10.3
ss.318 (a).................................................1.7
__________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Senior Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................ 1
SECTION 1.1 Definitions.................................................. 1
SECTION 1.2 Compliance Certificate and Opinions.......................... 9
SECTION 1.3 Forms of Documents Delivered to Trustee...................... 10
SECTION 1.4 Acts of Holders.............................................. 11
SECTION 1.5 Notices, Etc. to Trustee and Company......................... 13
SECTION 1.6 Notice to Holders; Waiver.................................... 14
SECTION 1.7 Conflict with Trust Indenture Act............................ 14
SECTION 1.8 Effect of Headings and Table of Contents..................... 14
SECTION 1.9 Successors and Assigns....................................... 14
SECTION 1.10 Separability Clause.......................................... 14
SECTION 1.11 Benefits of Indenture........................................ 15
SECTION 1.12 Governing Law................................................ 15
SECTION 1.13 Non-Business Days. .......................................... 15
ARTICLE II
SECURITY FORMS ........................................ 15
SECTION 2.1 Forms Generally.............................................. 15
SECTION 2.2 Legends...................................................... 17
SECTION 2.3 Form of Face of Security..................................... 20
SECTION 2.5 Form of Trustee's Certificate of Authentication. ............ 25
ARTICLE III
THE SECURITIES......................................... 25
SECTION 3.1 Title and Terms. ............................................ 25
SECTION 3.2 Denominations. .............................................. 28
SECTION 3.3 Execution, Authentication, Delivery and Dating. ............. 29
SECTION 3.4 Temporary Securities. ....................................... 31
SECTION 3.5 Registration, Transfer and Exchange. ........................ 31
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Securities. ........... 37
SECTION 3.7 Payment of Interest; Interest Rights Preserved. ............. 38
SECTION 3.8 Persons Deemed Owners. ...................................... 40
SECTION 3.9 Cancellation. ............................................... 40
SECTION 3.10 Computation of Interest. .................................... 40
SECTION 3.11 CUSIP Numbers. .............................................. 40
ARTICLE IV
SATISFACTION AND DISCHARGE .............................. 41
SECTION 4.1 Satisfaction and Discharge of Indenture. .................... 41
SECTION 4.2 Legal Defeasance............................................. 42
SECTION 4.3 Covenant Defeasance.......................................... 42
SECTION 4.4 Conditions to Legal Defeasance or Covenant Defeasance........ 43
SECTION 4.5 Application of Trust Money................................... 44
SECTION 4.6 Indemnity for U.S. Government Obligations.................... 44
ARTICLE V
REMEDIES ....................................... 44
SECTION 5.1 Events of Default. .......................................... 44
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. ......... 46
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. .................................................... 47
SECTION 5.4 Trustee May File Proofs of Claim. ........................... 48
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities. 49
SECTION 5.6 Application of Money Collected. ............................. 49
SECTION 5.7 Limitation on Suits. ........................................ 50
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest................................................. 50
SECTION 5.9 Restoration of Rights and Remedies. ......................... 51
SECTION 5.10 Rights and Remedies Cumulative. ............................. 51
SECTION 5.11 Delay or Omission Not Waiver. ............................... 51
SECTION 5.12 Control by Holders. ......................................... 52
SECTION 5.13 Waiver of Past Defaults. .................................... 52
SECTION 5.14 Undertaking for Costs. ...................................... 53
SECTION 5.15 Waiver of Usury, Stay or Extension Laws. .................... 53
ARTICLE VI
THE TRUSTEE ......................................... 54
SECTION 6.1 Certain Duties and Responsibilities. ........................ 54
SECTION 6.2 Notice of Defaults. ......................................... 55
SECTION 6.3 Certain Rights of Trustee. .................................. 56
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities. ..... 57
SECTION 6.5 May Hold Securities. ........................................ 57
SECTION 6.6 Money Held in Trust. ........................................ 57
SECTION 6.7 Compensation and Reimbursement. ............................. 57
SECTION 6.8 Disqualification; Conflicting Interests. .................... 58
SECTION 6.9 Corporate Trustee Required; Eligibility. .................... 58
SECTION 6.10 Resignation and Removal; Appointment of Successor. .......... 59
SECTION 6.11 Acceptance of Appointment by Successor. ..................... 61
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business. 62
SECTION 6.13 Preferential Collection of Claims Against Company. .......... 63
SECTION 6.14 Appointment of Authenticating Agent. ........................ 63
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY ................. 65
SECTION 7.1 Company to Furnish Trustee Names and Addresses of Holders.... 65
SECTION 7.2 Preservation of Information, Communications to Holders. ..... 65
SECTION 7.3 Reports by Trustee. ......................................... 65
SECTION 7.4 Reports by Company. ......................................... 66
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ................ 67
SECTION 8.1 Company May Consolidate, Etc., Only on Certain Terms. ....... 67
SECTION 8.2 Successor Corporation Substituted. .......................... 68
ARTICLE IX
SUPPLEMENTAL INDENTURES ............................... 69
SECTION 9.1 Supplemental Indentures without Consent of Holders. ......... 69
SECTION 9.2 Supplemental Indentures with Consent of Holders. ............ 70
SECTION 9.3 Execution of Supplemental Indentures......................... 71
SECTION 9.4 Effect of Supplemental Indentures. .......................... 71
SECTION 9.5 Conformity with Trust Indenture Act. ........................ 72
SECTION 9.6 Reference in Securities to Supplemental Indentures. ......... 72
ARTICLE X
COVENANTS....................................... 72
SECTION 10.1 Payment of Principal, Premium and Interest. ................. 72
SECTION 10.2 Maintenance of Office or Agency. ............................ 73
SECTION 10.3 Money for Security Payments to be Held in Trust. ............ 73
SECTION 10.4 Statement as to Compliance. ................................. 75
SECTION 10.5 Waiver of Certain Covenants. ................................ 75
SECTION 10.6 Calculation of Original Issue Discount. ..................... 75
SECTION 10.7 Limitation on Liens. ........................................ 76
ARTICLE XI
REDEMPTION OF SECURITIES ............................... 76
SECTION 11.1 Applicability of This Article................................ 76
SECTION 11.2 Election to Redeem; Notice to Trustee. ...................... 77
SECTION 11.3 Selection of Securities to be Redeemed. ..................... 77
SECTION 11.4 Notice of Redemption. ....................................... 78
SECTION 11.5 Deposit of Redemption Price. ................................ 79
SECTION 11.6 Payment of Securities Called for Redemption. ................ 79
ARTICLE XII
SINKING FUNDS..................................... 80
SECTION 12.1 Applicability of Article. ................................... 80
SECTION 12.2 Satisfaction of Sinking Fund Payments with Securities. ...... 80
SECTION 12.3 Redemption of Securities for Sinking Fund. .................. 81
EXHIBITS
Exhibit A Transferees Letter of Representation
<PAGE>
SENIOR INDENTURE, dated as of __________ ___, 1998, between THE FIRST
AMERICAN FINANCIAL CORPORATION, a California corporation (hereinafter called the
"Company") having its principal office at 114 East Fifth Street, Santa Ana, CA
92701, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured senior
debt securities in one or more series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and 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 Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(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,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company;
(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) The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(6) Whenever the context may require, any gender shall be deemed to include
the others; and
(7) Unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Indenture.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Members" has the meaning set forth in Section 2.1.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) 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 (iii) a day on which the
Corporate Trust Office of the Trustee is closed for business.
"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 Indenture 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 Stock" means the Common shares, $1.00 par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture 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" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, the Vice Chairman of the Board of Directors, its President or a
Vice President, and by its principal financial officer, its Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
at the date hereof is Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 4.3.
"Credit Facility" shall mean the Amended and Restated Credit Agreement
among the Company, The Chase Manhattan Bank, and the lenders party thereto from
time to time, dated as of July 29, 1997, as amended from time to time.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Definitive Securities" has the meaning set forth in Section 2.1..
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"Event of Default" unless otherwise specified in the supplemental indenture
creating a series of Securities has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Global 144A Security" has the meaning set forth in Section 2.1.
"Global Registered Security" has the meaning set forth in Section 2.1.
"Global Securities Legend" has the meaning set forth in Section 2.2.
"Global Security" has the meaning set forth in Section 2.1.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indebtedness" means indebtedness for money borrowed or indebtedness
evidenced by a bond, note, debenture or other evidence of indebtedness.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Legal Defeasance" has the meaning specified in Section 4.2.
"Lien" means any mortgage, pledge, hypothecation, encumbrance, charge or
security interest of any kind.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Non-Global Purchasers" has the meaning set forth in Section 2.1.
"Nonrecourse Indebtedness" has the meaning set forth in Section 5.1.
"Notice of Default" means a written notice of the kind specified in Section
5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, a Vice Chairman of the Board of Directors, the President or
a Vice President, and by the principal financial officer, the Secretary or an
Assistant Secretary (or any person expressly authorized by any of the foregoing
persons) of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified as such in each
Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment or redemption price money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or which have been paid pursuant to
Section 3.6, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding
and legal obligations of the Company; provided, however, that in determining
whether the Holders of the requisite principal amount of Outstanding Securities
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or such other obligor. Upon the written request of the Trustee, the Company
shall furnish to the Trustee promptly an Officers' Certificate listing and
identifying all Securities, if any, known by the Company to be owned or held by
or for the account of the Company or any other obligor on the Securities or any
Affiliate of the Company or such obligor, and, subject to the provisions of
Section 6.1(b), the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for the purpose of
any such determination.
"Paying Agent" means the Trustee or any Person authorized by the Company to
pay the principal of (or premium, if any) or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest on the
Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Purchase Money Lien" means (i) a Lien upon any capital stock of any
Restricted Subsidiary acquired before or after the date of the Indenture if such
Lien is for the purpose of financing the acquisition of the capital stock of
such Restricted Subsidiary, and does not exceed, the cost to the Company or any
Subsidiary of acquiring the capital stock of such Restricted Subsidiary and such
financing is effected concurrently with, or within six months after, the date of
such acquisition and (ii) any extension, renewal or refinancing of any such Lien
described in clause (i) immediately above so long as the principal amount of
obligations secured thereby shall not exceed the original principal amount of
obligations so secured at the time of any such extension, renewal or
refinancing.
"QIB" means any "qualified institutional buyer" (as defined under the
Securities Act).
"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" means, when used with respect to any Security to be
redeemed, 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
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) if the
Securities of a series are represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii) if any of the
Securities of a series are not represented by one or more Global Securities, the
date which is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee within the Corporate Trust Office 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 that officer's knowledge of and familiarity
with the particular subject.
"Restricted Securities Legend" has the meaning set forth in Section 2.2.
"Restricted Subsidiary" means any Subsidiary that is a licensed insurance
company having capital and surplus in excess of $2.5 million.
"Rights Plan" means a plan of the Company providing for the issuance by the
Company to all holders of its Common Stock of rights entitling the holders
thereof to subscribe for or purchase shares of Common Stock or any class or
series of preferred stock of the Company, which rights (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case
until the occurrence of a specified event or events.
"Rule 144A" has the meaning set forth in Section 2.1.
"Securities" or "Security" has the meaning set forth in the first recital
of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified pursuant to
the terms of such Security as the date on which the principal of such Security
or such installment of interest is due and payable, as such date, in the case of
such principal, may be shortened or extended as provided pursuant to the terms
of such Security and this Indenture.
"Subsidiary" means a corporation or business trust, a majority of the
outstanding voting securities of which is owned, directly or indirectly, by the
Company and/or one or more Subsidiaries.
"Total Capitalization" means, as of the date of determination, the sum of
(i) all Indebtedness of the Company outstanding as of such date, including,
without limitation, the Company's junior deferrable interest debentures, the
Securities and all Indebtedness under the Credit Facility, (ii) the Company's
consolidated shareholders' equity at the end of the most recently completed
fiscal quarter of the Company immediately preceding such date of determination
for which financial statements are or are required to be available and (iii) the
minority interests in Subsidiaries of the Company at the end of the most
recently completed fiscal quarter of the Company immediately preceding such date
of determination for which financial statements are or are required to be
available.
"Transfer Restricted Securities" Securities that bear or are required to
bear the Restricted Securities Legend set forth in Section 2.2 hereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb), as amended and as in effect on the date as of this Indenture,
except as provided in Section 9.5.
"U.S. Government Obligations" has the meaning specified in Section 4.4.
"Vice President", when used with respect to the Company means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2 Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action or
request have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent (including covenants
compliance with which constitute a condition precedent), if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such Officers' Certificate and Opinion of Counsel is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 10.4) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
or caused to be made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 1.3 Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer or counsel 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 or her certificate or
opinion is based are erroneous. Any 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 rendering such Opinion of Counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent or proxy duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a Person acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient and in accordance
with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
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.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of the relevant Outstanding Securities on such
record date, and no other Holders, shall be entitled to take the relevant
action, whether or not such Holders remain Holders after such record date,
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of the relevant Outstanding Securities on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of the relevant
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of the relevant Securities in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities entitled to join in the giving or making
of (i) any Notice of Default, (ii) any declaration of acceleration referred to
in Section 5.2, (iii) any request to institute proceedings referred to in
Section 5.7(2) or (iv) any direction referred to in Section 5.12, in each case
with respect to the relevant Securities. If any record date is set pursuant to
this paragraph, the Holders of the relevant Outstanding Securities on such
record date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date, provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of the relevant Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of the
relevant Outstanding Securities on the date such action is taken. Promptly after
any record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of the relevant Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of the relevant Outstanding Securities in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.5 Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for every
purpose (except as otherwise provided in Section 5.1) hereunder if in writing
and mailed, first class, postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
instrument or at any other address subsequently furnished in writing to the
Trustee by the Company.
SECTION 1.6 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
SECTION 1.7 Conflict with Trust Indenture Act.
At such time, if any, as this Indenture is qualified under the Trust
Indenture Act, if any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.9 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10 Separability Clause.
In case any provision of this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, holders of indebtedness ranking pari passu with the Securities and the
Holders of the Securities any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 1.12 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THEREOF.
SECTION 1.13 Non-Business Days.
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 the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day (and no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (in each case with the same force
and effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1 Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case 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 applicable tax laws or the rules of any
securities exchange or automated quotation system on which the Securities may be
listed or traded or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 3.3 with respect to the authentication and delivery of
such Securities.
Securities registered under the Securities Act, shall be issued initially
in the form of one or more permanent global Securities in definitive, fully
registered form without interest coupons with the Global Securities Legend set
forth in Section 2.2 hereof (each, a "Global Registered Security"), which shall
be duly executed by the Company and authenticated by the Trustee as hereinafter
provided.
Securities that are not registered under the Securities Act and are offered
and sold to QIBs in reliance on Rule 144A under the Securities Act ("Rule
144A"), shall be issued initially in the form of one or more permanent global
Securities in definitive, fully registered form without interest coupons with
the Global Securities Legend and Restricted Securities Legend set forth in
Section 2.2 hereof (each, a "Global 144A Security"; and when referred to herein
with a Global Registered Security, a "Global Security"), which shall be duly
executed by the Company and authenticated by the Trustee as hereinafter
provided.
This paragraph shall apply only to Global Securities. Members of, or
participants in, the Depositary ("Agent Members") shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the
Depositary or by the Trustee as the custodian of the Depositary or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute 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 the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of the Depositary
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
Except as provided in Section 3.5, owners of beneficial interests in Global
Securities will not be entitled to receive Definitive Securities (as hereinafter
defined). Securities that are not registered under the Securities Act and are
offered and sold to Persons who are not QIBs (referred to herein as the
"Non-Global Purchasers") shall be issued initially to such Persons in the form
of certificated Securities bearing the Restricted Securities Legend set forth in
Section 2.2 below ("Definitive Securities"); provided, however, that upon
transfer of such Definitive Securities to a QIB, such Definitive Securities
will, unless a Global Security has previously been exchanged, be exchanged for
an interest in a Global Security pursuant to the provisions of Section 3.5
hereof. Definitive Securities will bear the Restricted Securities Legend set
forth in Section 2.2 unless removed in accordance with Section 2.2 hereof.
The Securities shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange or automated quotation system on which the Securities may be listed or
traded, on a steel engraved border or steel engraved borders or may be produced
in any other manner permitted by the rules of any securities exchange or
automated quotation system on which the Securities may be listed or traded, all
as determined by the officers executing such Securities, as evidenced by their
execution of such securities.
SECTION 2.2 Legends.
Each Security certificate evidencing Global Securities (and all Securities
issued in exchange therefor or substitution thereof) shall bear a legend in
substantially the following form ("Global Securities Legend"):
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
Each Security certificate evidencing Global 144A Securities and Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form ("Restricted
Securities Legend"):
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE ISSUER OF THIS
SECURITY THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS
TWO YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OF THIS SECURITY OR ANY AFFILIATE OF THE ISSUER OF THIS
SECURITY WAS THE OWNER OF SUCH RESTRICTED SECURITIES (OR ANY PREDECESSOR)
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSES (II)(C), (D) AND (E) IS SUBJECT TO THE
RIGHT OF THE ISSUER OF THIS SECURITY TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THE ISSUER IN
FORM AND SUBSTANCE."
Upon any sale or transfer of a Transfer Restricted Security (including any
Transfer Restricted Security represented by a Global 144A Security) pursuant to
Rule 144 under the Securities Act or pursuant to an effective registration
statement under the Securities Act:
(a) in the case of any Transfer Restricted Security that is a Definitive
Security, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security that does not bear
the Restricted Securities Legend set forth above and rescind any
restriction on the transfer of such Security; and
(b) in the case of any such Transfer Restricted Security represented by a
Global 144A Security, such Transfer Restricted Security shall not be
required to bear the Restricted Securities Legend, although it shall
continue to be subject to the provisions of Section 3.5 hereof; provided,
however, that with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global 144A Security for a
Definitive Security that does not bear the Restricted Securities Legend,
which request is made in reliance upon Rule 144, the Holder thereof shall
certify in writing to the Trustee that such request is being made pursuant
to Rule 144 (such certification to be in the form set forth on the reverse
of the Security).
SECTION 2.3 Form of Face of Security.
THE FIRST AMERICAN FINANCIAL CORPORATION
CUSIP ____
__% SENIOR DEBENTURES DUE ______________
No. __________ $__________
THE FIRST AMERICAN FINANCIAL CORPORATION, a corporation organized and
existing under the laws of the state of California (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay
to____________________, or registered assigns, the principal sum of __________
Dollars on __________ __, ____. The Company further promises to pay interest on
said principal sum from __________ __, ____ or from the most recent interest
payment date (each such date, an "Interest Payment Date") on which interest has
been paid or duly provided for, [monthly] [quarterly] [semi-annually] in arrears
on [insert applicable Interest Payment Dates] of each year, commencing
__________, at the rate of ____% per annum, until the principal hereof shall
have become due and payable, until the principal hereof is paid or duly provided
for or made available for payment. The amount of interest payable for any period
shall be computed on the basis of twelve 30-day months and a 360-day year. The
amount of interest payable for any partial period shall be computed on the basis
of the number of days elapsed in a 360-day year of twelve 30-day months. 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 Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. A "Business Day"
shall mean any day other than (i) a Saturday or Sunday, (ii) 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 (iii) a day on which the Corporate Trust
Office of the Trustee 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 this
Security (or one or more Predecessor Securities is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the [insert definition of Regular Record Dates]. 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 this Security (or one or more Predecessor Securities)
is 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 of Securities of this series 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 or automated
quotation system on which the Securities of this series may be listed or traded,
and upon such notice as may be required by such exchange or self-regulatory
organization, all as more fully provided in said Indenture.
Payment of principal of (and premium, if any) and interest on this Security
will be made at the office or agency of the Company 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 [if applicable, insert -; 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 Securities
Register or (ii) by wire transfer in immediately available funds at such place
and to such account as may be designated in writing at least 15 days before the
relevant Interest Payment Date by the Person entitled thereto as specified in
the Securities Register].
The indebtedness evidenced by this Security is unsecured and ranks senior
in right of payment to all existing or future indebtedness of the Company that
is by its terms expressly subordinated in right of payment to this Security and
ranks pari passu with all other indebtedness of the Company.
Reference is hereby made to the further provisions of this Security set
forth 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, the Company has caused this instrument to be duly
executed under its corporate seal.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By:_____________________________
[President or Vice President]
Attest:
__________________________________
[Secretary or Assistant Secretary]
SECTION 2.4 Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Senior Indenture, dated as of __________ __, 1998 (herein called
the "Indenture"), between the Company and Wilmington Trust Company, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which 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 of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$[__________].
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them therein.
[If applicable, insert- The Company may at any time, at its option, on or
after _________, ____, and subject to the terms and conditions of Article XI of
the Indenture, redeem this Security in whole at any time or in part from time to
time at a redemption price equal to the following prices, expressed in
percentages of the principal amount, plus accrued and unpaid interest, to but
excluding the Redemption Date. If redeemed during the 12-month period beginning
_____ __:
Redemption
Year Price
---- ----------
20__ %
20__
20__
20__
20__
20__
20__
20__
20__
20__
and at 100% on or after _________ __, 20__.]
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of all series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of all series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, -As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders) and upon any such declaration the principal amount of and the
accrued interest on all the Securities of this series shall become immediately
due and payable.]
[If the Security is a Discount Security, -As provided in and subject to the
provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series may
declare an amount of principal of the Securities of this series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders). Such amount shall be equal to - insert formula for
determining the amount. Upon any such declaration, such amount of the principal
of and the accrued interest on all the Securities of this series shall become
immediately due and payable.]
Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.
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 premium, if any) 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 Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained under Section 10.2 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, 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 Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $__________ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
THE INDENTURE AND THIS SECURITY 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 2.5 Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:_____________ _______________________________________
The Wilmington Trust Company as Trustee
By:____________________________________
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 3.1 Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series. The
following matters shall be established in or pursuant to a Board Resolution, and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of a series:
(a) the title of the Securities of such series, which shall distinguish the
Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to the last paragraph of Section 3.3, are deemed
never to have been authenticated and delivered hereunder); provided, however,
that the authorized aggregate principal amount of such series may be increased
above such amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;
(d) the rate or rates, if any, at which the Securities of such series shall
bear interest, if any, the Interest Payment Dates on which such interest shall
be payable, and the Regular Record Date for the interest payable on any Interest
Payment Date or the method by which any of the foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;
(f) the period or periods within which, or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;
(g) the obligation or the right, if any, of the Company to redeem, repay or
purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or upon the happening of a specified event,
or at the option of a Holder thereof, and the period or periods within which,
the price or prices at which, the currency or currencies (including currency
unit or units) in which and the other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect to the
Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(n) whether the Securities of the series, or any portion thereof, shall
initially be issuable in the form of a temporary Global Security representing
all or such portion of the Securities of such series and provisions for the
exchange of such temporary Global Security for definitive Securities of such
series;
(o) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositaries for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.2 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(p) the appointment of any Paying Agents for the Securities of such series;
(q) the terms of any right to convert or exchange Securities of such series
into any other securities or property of the Company, and the additions or
changes, if any, to this Indenture with respect to the Securities of such series
to permit or facilitate such conversion or exchange;
(r) the terms of any right to convert or exchange Securities of such series
into any other securities or property of the Company, and the additions or
changes, if any, to this Indenture with respect to the Securities of such series
to permit or facilitate such conversion or exchange;
(s) the additions, modifications or deletions, if any, in the Events of
Default that apply to any Securities of the series and any change in the right
of the Trustee or the requisite Holder of such Securities to declare the
principal amount thereof due and payable pursuant to Section 5.2;
(t) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(u) any other terms, conditions and rights of the Securities of such series
(which terms, conditions and rights shall not be inconsistent with the
provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 3.2 Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $1,000 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 3.1.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its President
or one of its Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series 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 the Company
Order shall authenticate and make such Securities available for delivery. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.1, that such terms
have been established in conformity with the provisions of this Indenture;
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and
(4) that all requirements of New York, California and Federal law in
respect of the execution and delivery by the Company of such Securities,
and all covenants and conditions set forth in this Indenture which are
conditions precedent hereto, have been complied with.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall not be entitled to the benefits of this Indenture.
SECTION 3.4 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
Definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of Definitive Securities, the temporary Securities shall
be exchangeable for Definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge (except for tax or other governmental charges, if applicable) to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations having the same
Original Issue Date and Stated Maturity and having the same terms as such
temporary Securities. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 3.5 Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers and exchanges of
Securities as herein provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and make available for delivery, in the name
of the designated transferee or transferees, one or more new Securities of the
same series of any authorized denominations, of a like aggregate principal
amount, of the same Original Issue Date and Stated Maturity and having the same
terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Securities Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act at a time when the Depositary is required to be so
registered to act as depositary, in either case unless the Company has
approved a successor Depositary within 90 days, (B) there shall have
occurred and be continuing an Event of Default with respect to such Global
Security, (C) the Company in its sole discretion determines that such
Global Security will be so exchangeable or transferable or (D) there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or
11.6 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
The provisions of Clause (1) below shall only apply to transfers and
exchanges of Definitive Securities:
(1) When Definitive Securities are presented by a Holder to the
Securities Registrar with a request:
(a) to register the transfer of such Definitive Securities; or
(b) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Securities Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that:
(i) such Definitive Securities shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Securities Registrar, duly
executed by such Holder or his attorney duly authorized in writing;
and
(ii) if such Definitive Securities are Transfer Restricted
Securities, such Definitive Securities shall also be accompanied by
the following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being
delivered to the Securities Registrar by a Holder for
registration in the name of such Holder, without transfer, a
certification from such Holder to that effect (in the form set
forth on the reverse of the Security); or
(B) if such Transfer Restricted Securities are being
transferred (x) to the Company or to a QIB in accordance with
Rule 144A under the Securities Act or (y) pursuant to an
effective registration statement under the Securities Act, a
certification from such Holder to that effect (in the form set
forth on the reverse of the Security); or
(C) if such Transfer Restricted Securities are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities
Act; or (x) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act that is acquiring the Security for its own account, or for
the account of such an institutional accredited investor, in each
case in a minimum principal amount of the Securities of $100,000
for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the
Securities Act; or (y) in reliance on another exemption from the
registration requirements of the Securities Act: (i) a
certification to that effect from such Holder (in the form set
forth on the reverse of the Security), (ii) if the Company or the
Trustee so requests, an Opinion of Counsel reasonably acceptable
to the Company and to the Trustee to the effect that such
transfer is in compliance with the Securities Act and (iii) in
the case of clause (x), a signed letter from the transferee
substantially in the form of Exhibit A hereto.
The provisions of Clause (1) below shall only apply to transfers and
exchanges of a Definitive Security for a beneficial interest in a Global
Security.
(1) A Definitive Security may not be exchanged for a beneficial
interest in a Global Security except upon satisfaction of the requirements
set forth below. Upon receipt by the Trustee of a Definitive Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(a) certification, in the form set forth on the reverse of the
Security, to the effect that such Definitive Security is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act; and
(b) written instructions from the Holder thereof directing the
Trustee to make, or to direct the Securities Registrar to make, an
endorsement on the Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security,
then the Trustee shall cancel such Definitive Security and cause, or direct
the Securities Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Registrar, the aggregate principal amount of Securities
represented by the Global Security to be increased accordingly. If no
Global Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form
of an Officers' Certificate, a new Global Security in the appropriate
principal amount. The Trustee shall deliver copies of each certification
and instruction received by it pursuant to clauses (a) and (b) above to the
Depositary and, upon receipt thereof, the Depositary shall make appropriate
adjustments to its books and records to reflect exchange of such Definitive
Security for an interest in the Global Security in accordance with this
Section 3.5.
The provisions in Clauses (1) and (2) below shall only apply to the
transfer and exchange of a beneficial interest in a Global Security for a
Definitive Security.
(1) Any person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Definitive Security of
the same aggregate principal amount; provided that such request is
accompanied by the information specified below. Upon receipt by the Trustee
of written instructions (or such other form of instructions as is customary
for the Depositary) from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Security and, in the case
of a Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile):
(a) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the owner of a beneficial
interest in a Global Security, a certification from such Person to
that effect (in the form set forth on the reverse of the Security); or
(b) if such beneficial interest is being transferred (x) to a QIB
in accordance with Rule 144A under the Securities Act or (y) pursuant
to an effective registration statement under the Securities Act, a
certification from such person to that effect (in the form set forth
on the reverse of the Security); or
(c) if such beneficial interest is being transferred (w) pursuant
to an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act; or (x) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act that is acquiring the security for its
own account, or for the account of such an institutional accredited
investor, in each case in a minimum principal amount of the Securities
of $100,000 for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act; or (y) in reliance on another exemption from the
registration requirements of the Securities Act: (i) a certification
to that effect from the transferee (in the form set forth on the
reverse of the Security), (ii) if the Company or the Trustee so
requests, an Opinion of Counsel reasonably acceptable to the Company
and to the Trustee to the effect that such transfer is in compliance
with the Securities Act, and (iii) in the case of clause (x), a signed
letter from the transferee in the form of Exhibit A hereto;
then the Securities Registrar, at the direction of the Trustee, will cause,
in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Registrar, the aggregate
principal amount of the Global Security to be reduced accordingly and,
following such reduction, the Company will execute and the Trustee will
authenticate and deliver to the transferee one or more Definitive
Securities in accordance with clause (2) below.
(2) Definitive Securities issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 3.5 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 in writing. The Trustee shall deliver such
Definitive Securities to the Persons in whose names such Securities are so
registered in accordance with the instructions of the Depositary.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article XI and
ending at the close of business on the day of mailing of notice of redemption or
(b) to transfer or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
SECTION 3.6 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 make available for delivery in exchange therefor a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity and bearing the same interest rate as
such mutilated Security, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and make available for
delivery, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity and bearing the same interest rate as
such destroyed, lost or stolen Security, and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of the
principal of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Security of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities. At the option of
the Company, interest on any series of Securities may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Securities Register of such series or (ii) by wire transfer in immediately
available funds at such place and to such account as designated by the Person
entitled thereto as specified in the Securities Register of such series.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted 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 of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Upon such deposit, the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may (but shall have no duty to), in its discretion, in the name and at
the expense of the Company, cause a similar notice to be published at least once
in a newspaper, customarily published in the English language on each Business
Day and of general circulation in the Borough of Manhattan, The City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (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
or automated quotation system on which the Securities of the series in respect
of which interest is in default may be listed or traded and, upon such notice as
may be required by such exchange (or by the Trustee if the Securities are not
listed), if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 3.8 Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.7) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 3.9 Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be returned by the
Trustee to the Company and destroyed by the Company.
SECTION 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series for any period shall be
computed on the basis of a 360- day year of twelve 30-day months and interest on
the Securities of each series for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
SECTION 3.11 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 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 3.6 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 10.3) 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 such purpose in an amount sufficient to
pay and discharge the entire indebtedness on 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 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 6.7 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.5 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2 Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section 4.1, in the
case of any Securities with respect to which the exact amount described in
subparagraph A of Section 4.4 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 4.4 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 of Securities to
receive, solely from the trust fund described in subparagraph A of Section 4.4,
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
4.2 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 supplied by the
Company acknowledging the same.
SECTION 4.3 Covenant Defeasance.
In the case of any Securities with respect to which the exact amount
described in subparagraph A of Section 4.4 can be determined at the time of
making the deposit referred to in such subparagraph A, (a) 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 of Securities to receive, solely from
the trust fund described in subparagraph A of Section 4.4, 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 4.3 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), and (b) the
occurrence of any event specified in Section 5.1(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 4.4 are satisfied (hereinafter called "Covenant Defeasance"),
and the Trustee, at the cost and expense of the Company, shall execute proper
instruments supplied by the Company 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 (to the extent so specified in the case of Section
5.1(3)), 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 other provision herein or in any other document, but the remainder of
this Indenture and the Securities shall be unaffected thereby.
SECTION 4.4 Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 4.2
or 4.3 to the Outstanding Securities:
A. with reference to Section 4.2 or 4.3, 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 of Securities (i) cash in an amount, (ii) direct
obligations of the United States of America, backed by its full faith and credit
or 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 (collectively, "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, or (iii) 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 4.2, the Company has
delivered to the Trustee an Opinion of Counsel based on the face 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 of the Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and Legal Defeasance and will be subject to 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 4.3, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that, and such
opinion shall confirm that, the Holders of the Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and Covenant Defeasance and will be subject to federal income tax on the same
amount 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
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 4.5 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
4.1 and Section 4.4 shall be held in trust and such money and all money from
such U.S. Government Obligations 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 and U.S. Government
Obligations has been deposited with the Trustee.
SECTION 4.6 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 the U.S. Government Obligations
deposited pursuant to Section 4.4 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 of Outstanding Securities.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default.
"Event of Default", wherever used herein with respect to the Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series
when it becomes due and payable, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of (or premium, if any, on) any
Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Company in this Indenture with respect to that
series (other than a covenant or warranty a default in the performance of which
or the breach of which is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied; or
(4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit for creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action; or
(6) any default or event of default under any Indebtedness of the Company
or any of its Subsidiaries other than Indebtedness secured by assets of the
Company or any of its Subsidiaries the terms of which limit the remedies of the
holder or holders thereof primarily to the assets so secured ("Nonrecourse
Indebtedness"), which default or event of default results in at least $10
million of aggregate principal amount of such Indebtedness being declared due
and payable prior to maturity and such acceleration is not rescinded within 10
days thereafter; or
(7) failure by the Company or any of its Subsidiaries to pay at maturity
any Indebtedness other than Nonrecourse Indebtedness in excess of $10 million
aggregate principal amount, and such failure shall not have been cured within 10
days thereafter; or
(8) any other Event of Default provided with respect to Securities of that
series.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders) and upon any such declaration
such principal amount (or specified portion thereof) of and the accrued interest
on all the Securities of such series shall become immediately due and payable.
If an Event of Default specified in Section 5.1(4) or 5.1(5) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if the Securities of that series are
Discount Securities, such portion of the principal amount of such Securities as
may be specified by the terms of that series) shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of the Outstanding
Securities of that series, 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 installments of interest on all Securities of that series,
(B) the unpaid principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration, and
(C) 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
(2) all Events of Default with respect to Securities of that series (or all
series, as the case may be), other than the non-payment of the principal of (or
the premium, if any, on) or interest on Securities of that series (or of all
series, as the case may be) which have become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest; and, in addition
thereto, all amounts owing the Trustee under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the Securities of
any series shall then be due and payable as therein expressed or by declaration
of acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest shall be entitled and empowered (but shall have no
duty), to the fullest extent permitted by law, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be due and payable pursuant to a declaration in accordance with
Section 5.2) (and premium, if any) and interest owing and unpaid in respect to
the Securities and to file such other papers or documents as may be necessary or
advisable and, at such time, if any, as this Indenture is qualified under the
Trust Indenture Act, to take any and all actions as are authorized under the
Trust Indenture Act in order to have the claims of the Holders and any
predecessor to the Trustee under Section 6.7 allowed in any such judicial
proceedings; and
(ii) in particular, the Trustee shall be authorized to collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee for distribution in
accordance with Section 5.6, and in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due to it and any predecessor Trustee under Section 6.7.
Nothing herein contained 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; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5 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 an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing the Trustee and any predecessor Trustee
under Section 6.7, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
SECTION 5.6 Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid upon such series
of Securities for principal (and premium, if any), interest, in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such series of Securities for principal (and premium, if any) and interest,
respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7 Limitation on Suits.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series 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 security
or 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 security or 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 of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest on such Security on the respective Stated Maturities 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 right shall not
be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
such Holder, then and in every such case the Company, the Trustee or the Holders
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee or the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or the Holders, as the case may be.
SECTION 5.12 Control by Holders.
The Holders of not less than of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have the
right to decline to follow such direction if a Responsible Officer or Officers
of the Trustee shall, in good faith, determine that the proceeding so directed
would be unjustly prejudicial to the Holders not joining in any such direction
or would involve the Trustee in personal liability.
SECTION 5.13 Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may waive any past default hereunder and
its consequences with respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or interest on
any Security of such series (unless all Events of Default with respect to
Securities of that series, other than the non-payment of the principal of
Securities of that series which has become due solely by such acceleration, have
been cured or annulled as provided in Section 5.3 and the Company has paid or
deposited with the Trustee a sum sufficient to pay all overdue installments of
interest on all Securities of that series, the principal of (and premium, if
any, on) any Securities of that series which have become due otherwise than by
such declaration of acceleration, and all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel), or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all the
Securities of such series.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security on
or after the respective Stated Maturities expressed in such Security.
SECTION 5.15 Waiver of Usury, 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 usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not on their face they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2 Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on any Security of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of
Securities of such series; and provided, further, that, in the case of any
default of the character specified in Section 5.1(3), no such notice to Holders
of Securities of such series shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
SECTION 6.3 Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and (h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 6.4 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 neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.
SECTION 6.5 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.7 Compensation and Reimbursement.
The Company, as borrower, agrees
(1) to pay to the Trustee from time to time such compensation as shall be
agreed in writing between the Company and the Trustee for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(2) 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 or bad faith;
and
(3) to indemnify each of the Trustee and any predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence or bad
faith, arising out of or in connection with the acceptance or administration of
this trust or the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. This
indemnification shall survive the termination of this Agreement and the
resignation or removal of the Trustee hereunder.
To secure the Company's payment obligations in this Section, the Company
and the Holders agree that the Trustee shall have a lien prior to the Securities
on all money or property held or collected by the Trustee. Such lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code of 1978, as amended, or any successor
statute.
SECTION 6.8 Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
SECTION 6.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the United
States of America or of any state or territory or the District of Columbia,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal, state, territorial or District of
Columbia authority, or
(b) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,
in either case, having securities rated in one of the three highest rating
categories by a nationally recognized statistical rating organization and having
a combined capital and surplus of at least $50,000,000, subject to supervision
or examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then, for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. Neither the Company nor any Person directly or indirectly controlling,
controlled by or under common control with the Company shall serve as Trustee
for the Securities of any series issued hereunder.
SECTION 6.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after such removal, the Trustee
being removed may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 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 6.9 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, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to all Securities, or (ii)
subject to Section 5.14, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee with respect to the Securities of
that or those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee with respect to the Securities of such series and supersede
the successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of all amounts due to it under Section 6.7, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee, upon payment of all amounts due to it under Section 6.7, shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any state or territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal, or state, territorial or
District of Columbia authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
/s/_________________________________
As Trustee
By:_________________________________
As Authenticating Agent
By:_________________________________
Authorized Officer
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 15 and July 15 in
each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.2 Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 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 privileges of the Trustee, shall be as provided in 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 the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3 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. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
(b) If this Indenture shall have been qualified under the Trustee Indenture
Act, a copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, if any, and also with the Commission. The Company will
promptly notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 7.4 Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act shall be filed with
the Trustee within 15 days after the same is required to be filed with the
Commission. At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a Holder or a beneficial owner of a
Security, the Company shall promptly furnish the information specified in Rule
144A (d) (4) of the Securities Act (or any successor provision), or cause such
information to be furnished, to such Holder or beneficial owner in order to
permit compliance by such Holder or beneficial owner with Rule 144A under the
Securities Act; provided, however, that the Company shall not be required to
furnish such information at any time to a prospective purchaser located outside
the United States who is not a "U.S. person" within the meaning of Regulation S
under the Securities Act. If this Indenture shall have been qualified under the
Trustee Indenture Act, the Company also shall comply with the other provisions
of Trust Indenture Act Section 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 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 which 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 organized and existing under the laws of the
United States of America or any State or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the Company
to be performed or observed;
(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 6.1,
may rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 8.1.
SECTION 8.2 Successor Corporation 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
8.1, 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 Company shall be discharged from all obligations and
covenants under the 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 written 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 make
available for delivery 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 IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form reasonably 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 contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee or to surrender any right or power herein conferred upon the
Company; or
(3) to establish the form or terms of Securities of any series as permitted
by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such additional Events of Default are
to be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the benefit
of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall (a) become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision or (b) not apply to any Outstanding Securities; or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause (7) shall not
adversely affect the interest of the Holders of Securities of any series in any
material respect; or
(8) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11(b); or
(9) at such time, if any, as this Indenture is qualified under the Trust
Indenture Act, to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) 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 reduce any premium payable upon the redemption thereof, or
reduce the amount of principal of a Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2, 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
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain 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 5.13 or Section
10.5, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3 Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5 Conformity with Trust Indenture Act.
At such time, if any, as this Indenture is qualified under the Trust
Indenture Act, every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6 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 Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such Securities and this Indenture.
SECTION 10.2 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment and an office or agency where Securities of that
series may be surrendered for transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
of such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation and any change in
the location of any such office or agency.
SECTION 10.3 Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) at such time, if any, as this Indenture is qualified under the Trust
Indenture Act, comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the direction and expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 10.4 Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each calendar year of the Company ending after the date hereof, an Officers'
Certificate, one of the signatories of which shall be the principal executive,
principal financial or principal accounting officer of the Company, covering the
preceding calendar year, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance, observance or
fulfillment of or compliance with any of the terms, provisions, covenants and
conditions of this Indenture, and if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
SECTION 10.5 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant
or condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with respect to
the Securities of any series, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company in respect of any such covenant
or condition shall remain in full force and effect.
SECTION 10.6 Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year, if any.
SECTION 10.7 Limitation on Liens.
The Company shall not, and shall not permit any Subsidiary to, create,
assume, incur or suffer to exist any Lien, other than a Purchase Money Lien,
upon any capital stock of any Restricted Subsidiary, whether owned on the date
of the Indenture or thereafter acquired, to secure any Indebtedness (other than
the Senior Debentures) of the Company, any Subsidiary or any other Person
without in any such case making effective provision whereby all of the
outstanding Senior Debentures shall be directly secured equally and ratably with
such Indebtedness or, if such Indebtedness is secured by a Lien and is expressly
subordinated or junior in right of payment to the Senior Debentures, secured by
a Lien that is senior in priority to the Lien securing such Indebtedness;
provided, however, that this restriction will not apply to (i) Liens on the
capital stock of any Restricted Subsidiary securing Indebtedness outstanding
from time to time, provided that the principal amount of all such Indebtedness
secured by Liens on the capital stock of any Restricted Subsidiary, at the time
of each incurrence of any portion of any such Indebtedness, does not exceed 20%
of Total Capitalization and (ii) Liens securing Indebtedness from the Company to
any wholly owned Restricted Subsidiary or from any wholly owned Restricted
Subsidiary to the Company or its subsidiaries.
Nothing in this Section 10.7 or elsewhere in this Indenture contained shall
prevent or be deemed to restrict any other property of the Company or its
Subsidiaries or to prohibit the creation, assumption, or guaranty by the Company
or any Subsidiary of any debentures, notes, or other evidences of unsecured
indebtedness, whether in the ordinary course of business or otherwise.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 Applicability of This Article.
Redemption of Securities of any series (whether by operation of a sinking
fund or otherwise) as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Except as otherwise set forth
in the form of Security for such series, each Security of such series shall be
subject to partial redemption only in the amount of $1,000 or, in the case of
the Securities of a series issued to a Trust, $1,000, or integral multiples
thereof.
SECTION 11.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of the Securities, the Company shall, not less than 45 nor more than
60 days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such date and of the
principal amount of Securities of that series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction.
SECTION 11.3 Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by lot or such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed. If the
Company shall so direct, Securities registered in the name of the Company, any
Affiliate or any Subsidiary thereof shall not be included in the Securities
selected for redemption.
SECTION 11.4 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
the address of such Holder as it appears in the Securities Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall identify the Securities to be redeemed (including CUSIP number,
if a CUSIP number has been assigned to such Securities of such Series) and shall
state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be calculated
prior to the time the notice is required to be sent, an estimate of the
Redemption Price together with a statement that it is an estimate and the actual
Redemption Price will be calculated on the third Business Day prior to the
Redemption Date (and, if such an estimate of the Redemption Price is given, a
subsequent notice shall be given as set forth above on the date that such
Redemption Price is calculated setting forth the actual Redemption Price);
(c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest thereon,
if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case; and
(g) such other provisions as may be required in respect of the terms of a
particular series of Securities.
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 and shall be revocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.5 Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date specified in
the notice of redemption given as provided in Section 11.4, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.3) an amount of money sufficient to pay the Redemption
Price of, and any accrued interest on, all the Securities which are to be
redeemed on that date.
SECTION 11.6 Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4, the
Securities or portion of Securities shall become due and payable on the date and
at the place or places stated in such notice at the applicable Redemption Price.
On presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 3.1, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will 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 3.7.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the Holder thereof, at the expense of the Company, a new Security or Securities
of the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms. If a Global Security is so
surrendered, such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
ARTICLE XII
SINKING FUNDS
SECTION 12.1 Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any sinking fund payment in excess of such minimum amount which is
permitted to be made by the terms of such Securities of any series is herein
referred to as an "optional sinking fund payment". If provided for by the terms
of any Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of such Securities.
SECTION 12.2 Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, the Company may at its option, at
any time no more than 16 months and no less than 30 days prior to the date on
which such sinking fund payment is due, deliver to the Trustee Securities of
such series (together with the unmatured coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company, except Securities of
such series that have been redeemed through the application of mandatory or
optional sinking fund payments pursuant to the terms of the Securities of such
series, accompanied by a Company Order instructing the Trustee to credit such
obligations and stating that the Securities of such series were originally
issued by the Company by way of bona fide sale or other negotiation for value;
provided that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the Redemption Price for such Securities, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 12.3 Redemption of Securities for Sinking Fund.
Not less than 30 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of the failure of the Company
to deliver such Officers' Certificate (or, as required by this Indenture, the
Securities and coupons, if any, specified in such Officers' Certificate), the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit Securities as provided in
Section 12.2 and without the right to make the optional sinking fund payment
with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by the Company if the Company is acting as its own Paying Agent) on the sinking
fund payment date on which such payment is made (or, if such payment is made
before a sinking fund payment date, on the sinking fund payment date immediately
following the date of such payment) to the redemption of Securities of such
series at the Redemption Price specified in such Securities with respect to the
sinking fund. Any sinking fund moneys not so applied or allocated by the Trustee
(or, if the Company is acting as its own Paying Agent, segregated and held in
trust by the Company as provided in Section 10.3) for such series and together
with such payment (or such amount so segregated) shall be applied in accordance
with the provisions of this Section 12.3. Any and all sinking fund moneys with
respect to the Securities of any particular series held by the Trustee (or if
the Company is acting as its own Paying Agent, segregated and held in trust as
provided in Section 10.3) on the last sinking fund payment date with respect to
Securities of such series and not held for the payment or redemption of
particular Securities of such series shall be applied by the Trustee (or by the
Company if the Company is acting as its own Paying Agent), together with other
moneys, if necessary, to be deposited (or segregated) sufficient for the
purpose, to the payment of the principal of the Securities of such series at
Maturity. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.4. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Company shall pay to the Trustee (or, if the Company is acting as its
own Paying Agent, the Company shall segregate and hold in trust as provided in
Section 10.3) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 3.1) equal to the principal
and any interest accrued to the Redemption Date for Securities or portions
thereof to be redeemed on such sinking fund payment date pursuant to this
Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a series
with sinking fund moneys or mail any notice of redemption of Securities of such
series by operation of the sinking fund for such series during the continuance
of a default in payment of interest, if any, on any Securities of such series or
of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or the Company, if the Company is then
acting as its own Paying Agent) shall redeem such Securities if cash sufficient
for that purpose shall be deposited with the Trustee (or segregated by the
Company) for that purpose in accordance with the terms of this Article XII.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such default or
Event of Default, be held as security for the payment of the Securities and
coupons, if any, of such series; provided, however, that in case such default or
Event of Default shall have been cured or waived herein, such moneys shall
thereafter be applied on the next sinking fund payment date for the Securities
of such series on which such moneys may be applied pursuant to the provisions of
this Section 12.3.
* * * *
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY
as Trustee
By:_________________________
Name:
Title:
<PAGE>
EXHIBIT A
Transferee Letter of Representation
The First American Financial Corporation
Wilmington Trust Company, as Trustee
Dear Sirs:
This certificate is delivered to request a transfer of $ principal amount
of the ________% Senior Debentures Due __________ (the "Restricted Securities")
of The First American Financial Corporation ("Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor") that is purchasing Restricted Securities with a principal
amount of at least $100,000, and if the Restricted Securities are to be
purchased for one or more accounts ("investor accounts") for which we are acting
as fiduciary or agent, each such account is an Institutional Accredited Investor
that is purchasing Restricted Securities with a principal amount of at least
$100,000. In the normal course of our business, we invest in or purchase
securities similar to the Restricted Securities and we have such knowledge and
experience in financial business matters as to be capable of evaluating the
merits and risks of purchasing the Restricted Securities. We are aware that we
(or any investor account) may be required to bear the economic risk of an
investment in the Restricted Securities for an indefinite period of time and we
are (or such account is) able to bear such risk for an indefinite period.
2. We acknowledge that none of the Company or the Initial Purchasers (as
defined in the Offering Memorandum), or any person representing the Company or
the Initial Purchasers, has made any representation to us with respect to the
Company or the offering of the Restricted Securities, other than the Offering
Memorandum dated ____________________ (the "Offering Memorandum"), a copy of
which has been delivered to us and upon which we are relying in making our
investment decision with respect to the Restricted Securities. Accordingly, we
acknowledge that no representation or warranty is made by the Initial Purchasers
as to the accuracy or completeness of such materials. We have had access to such
financial and other information concerning the Company and the Restricted
Securities as we deemed necessary in connection with our decision to purchase
the Restricted Securities, including an opportunity to ask questions and request
information from the Company and the Initial Purchasers. We acknowledge that we
have read and agreed to the matters stated under the caption "Transfer
Restrictions" in such Offering Memorandum and the restrictions on duplication
and circulation of such Offering Memorandum.
3. We understand that any subsequent transfer of the Restricted Securities
is subject to certain restrictions and conditions set forth in the Offering
Memorandum under the caption "Transfer Restrictions" and we agree to be bound
by, and not to resell, pledge or otherwise transfer the Restricted Securities
except in compliance with such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act").
4. We understand and hereby acknowledge that prior to the effectiveness of
a registration statement filed with the Securities and Exchange Commission
relating to the Restricted Securities, the Restricted Securities have not been
registered under the Securities Act, and may not be sold except as permitted in
the following sentence. We agree to offer, sell or otherwise transfer such
Restricted Securities prior to the date which is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Restricted Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) for so long as the Restricted Securities
are eligible for resale pursuant to Rule 144A under the Securities Act, to a
person we reasonable believe is qualified institutional buyer under Rule 144A
("QIB") that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d)
outside the United States in a transaction meeting the requirements of Rule 904
of Regulation S under the Securities Act or (e) pursuant to any other available
exemption from the registration requirements of the Securities Act, and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and subject to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control. The
foregoing restriction on resale will not apply subsequent to the Resale
Restriction Termination Date. We acknowledge that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Restricted Securities pursuant to clause (d)
or (e) above to require the delivery of an opinion of counsel, certifications or
other information acceptable to the Company and the Trustee in form and
substance. We acknowledge that the Restricted Securities purchased by us will be
in the form of definitive physical certificates and will bear a legend
reflecting the substance of this paragraph 4.
5. Prior to any proposed transfer of the Restricted Securities (other than
pursuant to an effective registration statement) occurring before the Resale
Restriction Termination Date, we must check the appropriate box set forth on the
reverse of the certificate(s) evidencing such Restricted Securities relating to
the manner of such transfer and submit such certificate(s) to the Trustee. We
understand that the Trustee will not be required to accept any Restricted
Securities for registration of transfer, except upon presentation of evidence
satisfactory to the Company and to the Trustee that the foregoing restrictions
on transfer have been complied with.
6. We are acquiring the Restricted Securities for our own account or for
one or more accounts (each of which is an "institutional accredited investor")
as to each of which we exercise sole investment discretion.
7. We are not acquiring the Restricted Securities with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act.
8. We shall provide to any person purchasing any Restricted Securities from
us a notice advising such purchaser that transfers of the Restricted Securities
are restricted as set forth herein.
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete. You are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW.
TRANSFEREE:_____________________
BY______________________________
EXHIBIT 4.2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, 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 SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THE FIRST AMERICAN FINANCIAL CORPORATION
CUSIP [_____]
[_____]% Senior Debentures Due __________ __, 2028
No.[__________] $[__________]
THE FIRST AMERICAN FINANCIAL CORPORATION, a corporation organized and
existing under the laws of the state of California (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
[____________________], or registered assigns, the principal sum of one thousand
Dollars on [__________ ____], 2028. The Company further promises to pay interest
on said principal sum from [__________ ____], 1998 or from the most recent
interest payment date (each such date, an "Interest Payment Date") on which
interest has been paid or duly provided for, semi-annually in arrears on
[__________] 15 and [__________] 15 of each year, commencing [__________] 15,
1998, at the rate of [_____]% per annum, until the principal hereof shall have
become due and payable until the principal hereof is paid or duly provided for
or made available for payment. The amount of interest payable for any period
shall be computed on the basis of twelve 30-day months and a 360-day year. The
amount of interest payable for any partial period shall be computed on the basis
of the number of days elapsed in a 360-day year of twelve 30-day months. 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 Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. A "Business Day"
shall mean any day other than (i) a Saturday or Sunday, (ii) 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 (iii) a day on which the Corporate Trust
Office of the Trustee 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 this
Security (or one or more Predecessor Securities is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the Business Day next preceding such Interest Payment Date. 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 this Security (or one or more Predecessor Securities)
is 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 of Securities of this series 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 or automated
quotation system on which the Securities of this series may be listed or traded,
and upon such notice as may be required by such exchange or self-regulatory
organization, all as more fully provided in said Indenture.
Payment of principal of (and premium, if any) and interest on this Security
will be made at the office or agency of the Company 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 Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing at least 15 days before the relevant Interest Payment Date
by the Person entitled thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is unsecured and ranks senior
in right of payment to all existing or future indebtedness of the Company that
is by its terms expressly subordinated in right of payment to this Security and
ranks pari passu with all other indebtedness of the Company.
Reference is hereby made to the further provisions of this Security set
forth 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, the Company has caused this instrument to be duly
executed under its corporate seal.
THE FIRST AMERICAN FINANCIAL CORPORATION
By:________________________________________
Thomas A. Klemens, Executive Vice President
Attest:
______________________________
Mark R Arnesen, Secretary
<PAGE>
(reverse)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Senior Indenture, dated as of __________ ____, 1998 (herein
called the "Indenture"), between the Company and Wilmington Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which 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 of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$100,000,000.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them therein.
The Company may at any time, at its option, on or after [_______________]
15, 2008, and subject to the terms and conditions of Article XI of the
Indenture, redeem this Security in whole at any time or in part from time to
time at a redemption price equal to the following prices, expressed in
percentages of the principal amount, plus accrued and unpaid interest including
Additional Interest, if any, to but excluding the Redemption Date. If redeemed
during the 12-month period beginning [__________] 15:
Redemption
Year Price
------ ----------
2008 %
2009
2010
2011
2012
2013
2014
2015
2016
2017
and at 100% on or after [__________] 15, 2018.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of all series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of all series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Securities of this series at the time Outstanding
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders) and upon any such declaration the principal
amount of and the accrued interest on all the Securities of this series shall
become immediately due and payable.
Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.
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 premium, if any) 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 Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained under Section 10.2 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, 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 Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
THE INDENTURE AND THIS SECURITY 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.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:_____________ _______________________________________
The Wilmington Trust Company as Trustee
By:____________________________________
Authorized Signatory
* * *
EXHIBIT 5
[White & Case LLP Letterhead]
March 11, 1998
The First American Financial Corporation
114 East Fifth Street
Santa Ana, CA 92701
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 (the "Registration
Statement") filed today by The First American Financial Corporation (the
"Company") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, for the registration of $100,000,000 in aggregate principal
amount of the Company's debt securities (the "Securities"), to be issued under
an Indenture, dated as of __________ __, 1998, between the Company and The
Wilmington Trust Company, Delaware, as trustee.
In our opinion, when the Securities have been duly executed, authenticated
and delivered against payment therefor, the Securities will be legally issued
and will be legally binding obligations of the Company, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ White & Case LLP
NWR:GPR
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of The First
American Financial Corporation of our report dated February 11, 1997, appearing
on page 21 of The First American Financial Corporation's Annual Report on Form
10-K for the year ended December 31, 1996. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
By: /s/ Price Waterhouse LLP
------------------------
Price Waterhouse LLP
Costa Mesa, California
Date: March 11, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of The First
American Financial Corporation, a California corporation (the "Corporation"),
hereby constitute and appoint Parker S. Kennedy and Mark R Arnesen, and each of
them, the true and lawful agents and attorneys-in-fact of the undersigned, with
full power and authority in said agents and attorneys-in-fact, and in either or
both of them, to sign for the undersigned and in their respective names as
directors of the Corporation the Registration Statement on Form S-3 to be filed
with the United States Securities and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933, as amended, and any amendment or amendments to
such Registration Statement, relating to the senior unsecured notes of the
Corporation to be offered thereunder, and the undersigned ratify and confirm all
acts taken by such agents and attorneys-in-fact, or either or both of them, as
herein authorized. This Power of Attorney may be executed in one or more
counterparts.
Date: January 28, 1998 By:/s/ George L. Argyros
---------------------
George L. Argyros
Date: January 28, 1998 By:/s/ Gary J. Beban
-----------------
Gary J. Beban
Date: January 28, 1998 By:/s/ J. David Chatham
--------------------
J. David Chatham
Date: January 28, 1998 By:/s/ William G. Davis
--------------------
William G. Davis
Date: January 28, 1998 By:/s/ James L. Doti
-----------------
James L. Doti
Date: January 28, 1998 By:/s/ Lewis W. Douglas, Jr.
-------------------------
Lewis W. Douglas, Jr.
Date: January 28, 1998 By:/s/ Paul B. Fay, Jr.
--------------------
Paul B. Fay, Jr.
Date: January 28, 1998 By:/s/ Dale F. Frey
----------------
Dale F. Frey
Date: January 28, 1998 By:/s/ Anthony R. Moiso
--------------------
Anthony R. Moiso
Date: January 28, 1998 By:/s/ Rudolph J. Munzer
---------------------
Rudolph J. Munzer
Date: January 28, 1998 By:/s/ Frank O'Bryan
-----------------
Frank O'Bryan
Date: January 28, 1998 By:/s/ Roslyn B. Payne
-------------------
Roslyn B. Payne
Date: January 28, 1998 By:_____________________
D. Van Skilling
Date: January 28, 1998 By:/s/ Virginia Ueberroth
----------------------
Virginia Ueberroth
EXHIBIT 25
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
California 95-1068610
(State of incorporation) (I.R.S. employer identification no.)
114 East Fifth Street
Santa Ana, California 92701-4622
(Address of principal executive offices) (Zip Code)
___% Senior Debentures Due 2028
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an affiliate
of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of Eligibility
and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to exercise
corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 11th day
of March, 1998.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
--------------------- -------------------
Assistant Secretary Name: James P. Lawler
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington, County
of New Castle; the name of its resident agent is WILMINGTON TRUST
COMPANY whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains and
operates branch offices in the City of Newark, New Castle County,
Delaware, the Town of Newport, New Castle County, Delaware, at
Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New
Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or
agencies of the government of the State of Delaware empowered to
confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to
the same extent as natural persons might or could do and in any part
of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of law
or equity and to make and use a common seal, and alter the seal
at pleasure, to hold, purchase, convey, mortgage or otherwise
deal in real and personal estate and property, and to appoint
such officers and agents as the business of the Corporation shall
require, to make by-laws not inconsistent with the Constitution
or laws of the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of money,
or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally
to use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or
necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate
or interests therein, and to guarantee the holder of such
property, real or personal, against any claim or claims, adverse
to his interest therein, and to prepare and give certificates of
title for any lands or premises in the State of Delaware, or
elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of
every sort and kind, from executors, administrators, guardians,
public officers, courts, receivers, assignees, trustees, and from
all fiduciaries, and from all other persons and individuals, and
from all corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other receptacles
for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be
agreed upon between the two parties, and in like manner may act
as Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places
of responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with
any other person, or persons, corporation, or corporations, or in
like manner become surety upon any bond, recognizance,
obligation, judgment, suit, order, or decree to be entered in any
court of record within the State of Delaware or elsewhere, or
which may now or hereafter be required by any law, judge, officer
or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity in the receiving, holding, managing, and
disposing of any and all estates and property, real, personal or
mixed, and to be appointed as such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons, corporations,
court, officer, or authority, in the State of Delaware or
elsewhere; and whenever this Corporation is so appointed by any
person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as security
for the performance of the duties devolving upon it by such
appointment.
(10) And for its care, management and trouble, and the exercise
of any of its powers hereby given, or for the performance of any
of the duties which it may undertake or be called upon to
perform, or for the assumption of any responsibility the said
Corporation may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or
of any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for,
and dispose of interest, dividends and income upon and from any
of the bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures,
notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and
all the rights, powers and privileges of individual owners
thereof, including the right to vote thereon; to invest and deal
in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and
from time to time to vary or realize such investments; to issue
bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held
or owned by the Corporation, and to sell and pledge such bonds,
as and when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property
of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred
by the laws of the State of Delaware, it is hereby expressly provided
that the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of
the world.
(2) To acquire the good will, rights, property and franchises and
to undertake the whole or any part of the assets and liabilities
of any person, firm, association or corporation, and to pay for
the same in cash, stock of this Corporation, bonds or otherwise;
to hold or in any manner to dispose of the whole or any part of
the property so purchased; to conduct in any lawful manner the
whole or any part of any business so acquired, and to exercise
all the powers necessary or convenient in and about the conduct
and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and
to lease, sell, exchange, transfer, or in any manner whatever
dispose of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent
as natural persons might or could do, to purchase or otherwise
acquire, to hold, own, to mortgage, sell, convey or otherwise
dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the
United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any
other clause of this or any other paragraph in this charter, but
that the objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as independent
objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding;
and, subject to the provisions of subparagraph 1 of Paragraph (c) of
this Article FOURTH, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or resolutions
adopted prior to the issuance of any shares of a particular series of
Preferred Stock, the voting powers and the designations, preferences
and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall
be paid, the extent of the preference or relation, if any, of
such dividends to the dividends payable on any other class or
classes, or series of the same or other class of stock and
whether such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares
of any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and the
time or times at which, and the terms and conditions on which,
Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under
such circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential dividends
on the Preferred Stock (fixed in accordance with the provisions of
section (b) of this Article FOURTH), if any, shall have been met and
after the Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking funds or
redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article FOURTH), and subject further
to any conditions which may be fixed in accordance with the provisions
of section (b) of this Article FOURTH, then and not otherwise the
holders of Common Stock shall be entitled to receive such dividends as
may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions of
such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or
of options, warrants or other rights to purchase shares of any class
or series of stock or of other securities of the Corporation shall
have any preemptive right to purchase or subscribe for any unissued
stock of any class or series or any additional shares of any class or
series to be issued by reason of any increase of the authorized
capital stock of the Corporation of any class or series, or bonds,
certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the Corporation of any
class or series, or carrying any right to purchase stock of any class
or series, but any such unissued stock, additional authorized issue of
shares of any class or series of stock or securities convertible into
or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations,
whether such holders or others, and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of Directors in the resolution
or resolutions adopted pursuant to authority granted in section (b) of
this Article FOURTH and the consent, by class or series vote or
otherwise, of the holders of such of the series of Preferred Stock as
are from time to time outstanding shall not be required for the
issuance by the Board of Directors of any other series of Preferred
Stock whether or not the powers, preferences and rights of such other
series shall be fixed by the Board of Directors as senior to, or on a
parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors
may provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to section (b) of this Article FOURTH
that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any
or all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more
than twenty-five as fixed from time to time by vote of a majority of
the whole Board, provided, however, that the number of directors shall
not be reduced so as to shorten the term of any director at the time
in office, and provided further, that the number of directors
constituting the whole Board shall be twenty-four until otherwise
fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office for
a term expiring at the next succeeding annual meeting, directors of
the second class shall be elected to hold office for a term expiring
at the second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Any vacancies in the Board of Directors for
any reason, and any newly created directorships resulting from any
increase in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen
and until his successor shall be elected and qualified. No decrease in
the number of directors shall shorten the term of any incumbent
director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation), any
director or the entire Board of Directors of the Corporation may be
removed at any time without cause, but only by the affirmative vote of
the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting
of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election
of directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 14 days nor
more than 50 days prior to any meeting of the stockholders called for
the election of directors; provided, however, that if less than 21
days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary
of the Corporation not later than the close of the seventh day
following the day on which notice of the meeting was mailed to
stockholders. Notice of nominations which are proposed by the Board of
Directors shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment
of such nominee and (iii) the number of shares of stock of the
Corporation which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants
as may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power
to authorize the seal of the Corporation to be affixed to all papers
which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by
a vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may
be adopted only by the affirmative vote of the holders of two-thirds
or more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered
for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of
this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, considered for the purpose of this Article FIFTEENTH
as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required,
or that some lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote
on such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority
of any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act
of Incorporation or the By-Laws of the Corporation (and in addition to
any other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of
at least two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) shall be required
to amend, alter or repeal any provision of Articles FIFTH, THIRTEENTH,
FIFTEENTH or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be
amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability
to act, or disqualification of any director, the Board of Directors, although
less than a quorum, shall have the right to elect the successor who shall hold
office for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall be
selected by the Board of Directors from its own members, none of whom shall be
an officer of the Company, and shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than five
(5) members who shall be selected by the Board of Directors from its own members
who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix
in advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust Company"
within the inner circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: March 11, 1998 By: /s/ James P. Lawler
-------------------
Name: James P. Lawler
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved by
any state banking authorities. Refer to your appropriate state banking
authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
------------------------ ----------
Name of Bank City
in the State of DELAWARE, at the close of business on December 31, 1997.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................236,646
Interest-bearing balances........................................................................... 0
Held-to-maturity securities............................................................................... 331,880
Available-for-sale securities.............................................................................1,258,661
Federal funds sold and securities purchased under agreements to resell...................................... 91,500
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,822,320
LESS: Allowance for loan and lease losses. . . . . . 59,373
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,762,947
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases)....................................................129,740
Other real estate owned...................................................................................... 2,106
Investments in unconsolidated subsidiaries and associated companies............................................ 22
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................4,905
Other assets................................................................................................100,799
Total assets..............................................................................................5,919,206
LIABILITIES
Deposits:
In domestic offices.......................................................................................4,034,633
Noninterest-bearing . . . . . . . . 839,928
Interest-bearing. . . . . . . . . . 3,194,705
Federal funds purchased and Securities sold under agreements to repurchase................................. 575,827
Demand notes issued to the U.S. Treasury.....................................................................61,290
Trading liabilities (from Schedule RC-D)..........................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................673,000
With original maturity of more than one year.....................................................43,000
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities (from Schedule RC-G).................................................................... 76,458
Total liabilities.........................................................................................5,464,208
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus (exclude all surplus related to preferred stock).....................................................62,118
Undivided profits and capital reserves......................................................................385,018
Net unrealized holding gains (losses) on available-for-sale securities........................................7,362
Total equity capital........................................................................................454,998
Total liabilities, limited-life preferred stock, and equity capital.......................................5,919,206
</TABLE>
