SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 27, 1997
GREAT WESTERN FINANCIAL CORPORATION
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-4075 95-1913457
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
9200 Oakdale Avenue, Chatsworth, California 91311
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code:
(818) 775-3411
(Former name or former address, if changed since last report.)
Not applicable.
<PAGE>
Item 7 Financial Statements and Exhibits
1. Underwriting Agreement, dated January 22, 1997,
among Great Western Financial Corporation (the
"Company"), Great Western Financial Trust II (the
"Trust") and Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Lehman
Brothers and Smith Barney Inc., as Representatives
of the several Underwriters, relating to the
8.206% Capital Securities, Series A, of the Trust
(the "Capital Securities").
4.1 Third Supplemental Indenture, dated as of January
22, 1997, to Indenture, dated as of September 12,
1990, as amended and supplemented, between the
Company and Harris Trust and Savings Bank,
relating to the 8.206% Subordinated Deferrable
Interest Notes Due 2027 of the Company.
4.2 Amended and Restated Declaration of Trust of the
Trust, dated January 22, 1997.
4.3 Form of Capital Securities (attached as Annex 1 to
Exhibit A to the Amended and Restated Declaration
of Trust included herein as Exhibit 4.2).
4.4 Capital Securities Guarantee Agreement, dated as
of January 22, 1997, between the Company and The
First National Bank of Chicago, as Property
Trustee.
8. Opinion of O'Melveny & Myers as to certain federal
tax matters relating to the Capital Securities.
23.1 Consent of O'Melveny & Myers (included in Exhibit
8 hereto).
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
GREAT WESTERN FINANCIAL CORPORATION
/s/ STEPHEN F. ADAMS
By: Stephen F. Adams
Title: First Vice President
DATED: January 31, 1997
$300,000,000
Great Western Financial Trust II
8.206% Capital Securities, Series A
(Liquidation Amount $1,000 per Capital Security)
guaranteed to the extent set forth
in the Prospectus Supplement by
Great Western Financial Corporation
___________________________________
Underwriting Agreement
January 22, 1997
<PAGE>
GOLDMAN, SACHS & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH
85 Broad Street INCORPORATED
New York, NY 10004 World Financial Center
North Tower
250 Vesey Street
New York, NY 10281
LEHMAN BROTHERS INC.
3 World Financial Center SMITH BARNEY INC.
New York, NY 10285 388 Greenwich Street
New York, NY 10013
$300,000,000
Great Western Financial Trust II
8.206% Capital Securities, Series A
(Liquidation Amount $1,000 per Capital Security)
guaranteed to the extent set forth
in the Prospectus Supplement by
Great Western Financial Corporation
Underwriting Agreement
----------------------
January 22, 1997
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Lehman Brothers Inc.,
Smith Barney Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Great Western Financial Trust II (the "Trust" and together
with the Company, as defined below, the "Offerors"), a statutory
business trust created under the Business Trust Act of the State
of Delaware (the "Delaware Business Trust Act"), and Great
Western Financial Corporation, a Delaware corporation (the
"Company"), as depositor of the Trust and as Guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated
herein, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") for whom you are acting as represen-
tatives (in such capacity, you shall hereinafter be referred to
as the "Representatives") an aggregate of 300,000 8.206% Capital
Securities, Series A (the "Securities"), of the Trust with a
liquidation amount of $1,000 per security. The Securities
represent undivided beneficial interests in the assets of the
Trust, guaranteed by the Guarantor to the extent set forth in the
guarantee (the "Guarantee") dated as of January 22, 1997, between
the Guarantor and The First National Bank of Chicago ("First
Chicago"), as trustee (the "Guarantee Trustee"). The entire
proceeds from the sale of the Securities will be combined with
the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities"), and will be used
by the Trust to purchase $309,279,000 aggregate principal amount
of 8.206% Subordinated Deferrable Interest Notes due February 1,
2027 (the "Subordinated Notes") issued by the Company. The
Securities and the Common Securities will be issued pursuant to
the Amended and Restated Declaration of Trust dated as of
January 22, 1997 (the "Declaration") among the Company, as
depositor, Carl F. Geuther, J. Lance Erikson and Bruce F.
Antenberg (the "Regular Trustees"), First Chicago, as property
trustee (the "Property Trustee"), and First Chicago Delaware
Inc., as Delaware trustee (the "Delaware Trustee," and together
with the Issuer Trustees and the Property Trustee, the
"Trustees"), and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The
Subordinated Notes will be issued pursuant to an Indenture, dated
as of September 12, 1990, as amended and supplemented by a First
Supplemental Indenture, dated April 30, 1993, a Second
Supplemental Indenture, dated as of December 6, 1995, and the
Third Supplemental Indenture, dated as of January 22, 1997 (as
amended and supplemented, the "Subordinated Indenture"), between
the Company and Harris Trust and Savings Bank, as Indenture
Trustee. The Securities may be exchangeable into Subordinated
Notes.
The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form
S-3 (No. 333-19711) for the registration under the Securities Act
of 1933, as amended (the "1933 Act"), of certain securities,
including (i) the Securities, (ii) the Guarantee of the
Securities, (iii) the Preferred Stock, par value $1.00 per share,
of the Company (the "Company Preferred Stock"), (iv) the Common
Stock, par value $1.00 per share, of the Company (the "Common
Stock"), (v) the Depository Shares of the Company with respect to
the Company Preferred Stock (the "Depository Shares"), (vi) the
Senior Debt Securities Warrants, the Subordinated Debt Securities
Warrants, the Company Preferred Stock Warrants, the Depository
Shares Warrants and the Common Stock Warrants representing the
right to purchase Senior Debt Securities, Subordinated Debt
Securities, Company Preferred Stock, Depository Shares, and
Common Stock, respectively (such warrants are collectively
referred to herein as the "Securities Warrants"), and (vii) debt
securities of the Company, including the Subordinated Notes to be
issued and sold to the Trust by the Company (the securities set
forth in the foregoing clauses (i) to (vii) inclusive, are
collectively referred to herein as the "Registered Securities")
and the offering thereof from time to time in accordance with
Rule 415 under the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), which registration
statement has been declared effective by the Commission and
copies of which have heretofore been delivered to you. Such
registration statement (as amended, if applicable), including a
preliminary prospectus and preliminary prospectus supplement
relating to the offering of the Securities (such preliminary
prospectus and preliminary prospectus supplement are collectively
referred to herein as the "Preliminary Prospectus"), all
documents incorporated or deemed to be incorporated by reference
therein, any registration statement increasing the size of the
offering (a "Rule 462(b) Registration Statement") filed pursuant
to Rule 462(b) under the 1933 Act which became effective upon
filing, and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations, as from
time to time amended or supplemented pursuant to the 1933 Act,
the Securities Exchange Act of 1934, as amended (the "1934 Act")
or otherwise, is hereinafter referred to as the "Registration
Statement." The Offerors propose to file with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations the prospec-
tus supplement dated the date hereof (the "Prospectus
Supplement") relating to the Securities and the prospectus dated
January 21, 1997 (the "Base Prospectus") relating to the
Registered Securities, and have previously advised you of all
further information (financial and other) with respect to the
Company set forth therein. The Base Prospectus together with the
Prospectus Supplement, in their respective forms on the date
hereof (being the forms in which they are to be filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations),
including all documents incorporated or deemed to be incorporated
by reference therein through the date hereof, are hereinafter
referred to as the "Prospectus," except that if any revised
prospectus or prospectus supplement shall be provided to the
Underwriters by the Offerors for use in connection with the
offering of the Securities which differs from the Prospectus
(whether or not such revised prospectus or prospectus supplement
is required to be filed by the Offerors pursuant to Rule 424(b)
of the 1933 Act Regulations), the term "Prospectus" shall refer
to such revised prospectus or prospectus supplement, as the case
may be, from and after the time it is first provided to the
Underwriters for such use. Unless the context otherwise
requires, all references in this Agreement to documents,
financial statements and schedules and other information which is
"contained," "included," "stated," "described" or "referred to"
in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include
all such documents, financial statements and schedules and other
information which is or is deemed to be incorporated by reference
in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under
the 1934 Act after the date of this Agreement which is or is
deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to
make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been
executed and delivered.
1. Each of the Offerors, jointly and severally, represents
and warrants to, and agrees with, each of the Underwriters as of
the date hereof that:
(a) The Registration Statement, at the time it became
effective and as of the date hereof, complied and complies in all
material respects with the requirements of the 1933 Act, the 1933
Act Regulations and the Trust Indenture Act of 1939, as amended
(the "1939 Act") and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations"). The
Registration Statement, at the time it became effective and the
date hereof, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Prospectus, as of the date hereof (unless the
term "Prospectus" refers to a prospectus which has been provided
to the Underwriters by the Offerors for use in connection with
the offering of the Securities which differs from the Prospectus
filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, in which case at the time it is first provided to
the Underwriters for such use) and at the Time of Delivery (as
defined in Section 4 hereof), does not and will not include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Offerors in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement
or the Prospectus, or to those parts of the Registration
Statement that constitute the Statements of Qualification of the
Trustees under the 1939 Act, filed as exhibits to the
Registration Statement (the "Forms T-1"). For purposes of this
Section 1(a), all references to the Registration Statement, any
post-effective amendments thereto and the Prospectus shall be
deemed to include, without limitation, any electronically
transmitted copies thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis, and Retrieval system
("EDGAR").
(b) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at
the time they were filed with the Commission, complied in all
material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations").
(c) Since the respective dates as of which information is
given in the Prospectus, except for regular quarterly dividends
on the Common Stock, and regular quarterly dividends on the
Company's 8.30% Cumulative Preferred Stock, par value $1.00 per
share, (the "Cumulative Preferred Stock"), there has been no
dividend or distribution of any kind declared, paid or made by
the Offerors on any class of their capital stock.
(d) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for
subsequent issuances, if any, pursuant to reservations or
agreements referred to in the Prospectus); all of the shares of
issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable and are not
subject to any preemptive or other similar rights; all of the
shares of issued and outstanding Cumulative Preferred Stock have
been duly authorized and validly issued and are fully paid and
non-assessable and are not subject to any preemptive or other
similar rights; the Securities, the Common Securities, the
Subordinated Notes and the Guarantee conform to all statements
relating thereto contained in the Prospectus; and the issuance of
the Securities and the Guarantee is not subject to any preemptive
or other similar rights.
(e) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware
Business Trust Act with the power and authority to own property
and to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Securities, the Common
Securities and the Declaration, and the Trust is not required to
be qualified to transact business in any other jurisdiction; the
Trust is not a party to or otherwise bound by any agreement other
than those described in the Prospectus; the Trust is and will be
classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a partnership
or corporation; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(f) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued (subject to the
terms of the Declaration) and fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, and
will be entitled to the benefits of the Declaration; the issuance
of the Common Securities is not subject to preemptive or other
similar rights; and at the Time of Delivery, all of the issued
and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(g) The Declaration has been duly authorized by the Company
and, at the Time of Delivery, will have been duly executed and
delivered by the Company and the Regular Trustees, and assuming
due authorization, execution and delivery of the Declaration by
the Property Trustee and the Delaware Trustee, the Declaration
will, at the Time of Delivery, be a valid and binding obligation
of the Company and the Regular Trustees, enforceable against the
Company and the Regular Trustees in accordance with its terms,
except as may be limited by bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or similar laws
relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and by general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in
equity or at law (the "Bankruptcy Exceptions") and will conform
to all statements relating thereto in the Prospectus; and at the
Time of Delivery, the Declaration will have been duly qualified
under the 1939 Act.
(h) The Guarantee has been duly authorized by the Company
(no stockholder action being required) and, when validly executed
and delivered by the Company and assuming due authorization,
execution and delivery thereof by the Guarantee Trustee, the
Guarantee will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms except as may be limited by the Bankruptcy Exceptions; and
the Guarantee, at the Time of Delivery, will have been duly
qualified under the 1939 Act.
(i) The Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust against
payment of the consideration therefor in accordance with the
terms of this Agreement, will be validly issued (subject to the
terms of the Declaration) and fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, and
will be entitled to the benefits of the Declaration; and holders
of Securities will be entitled to the same limitation of personal
liability under Delaware law as extended to stockholders of
private corporations for profit.
(j) The Subordinated Indenture has been duly authorized by
the Company (no stockholder action being required) and, when the
Subordinated Indenture is validly executed and delivered by the
Company, the Subordinated Indenture will constitute a valid and
binding agreement of the Company, enforceable against the Company
in accordance with its terms except as may be limited by the
Bankruptcy Exceptions; and the Time of Delivery, the Subordinated
Indenture will have been duly qualified under the 1939 Act.
(k) The Subordinated Notes have been duly authorized by the
Company (no stockholder action being required) and, at the Time
of Delivery, will have been duly executed by the Company; the
Subordinated Notes, when authenticated in the manner provided for
in the Subordinated Indenture and delivered against payment
therefor as described in the Prospectus, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms except as may be limited
by the Bankruptcy Exceptions; and the Subordinated Notes will be
in the form contemplated by, and entitled to the benefits of, the
Subordinated Indenture.
(l) The Company's obligations under the Guarantee are
subordinate and junior in right of payment to all liabilities of
the Company and are, and for so long as the Securities are
outstanding, will be, pari passu with the most senior preferred
or preference stock issued by the Company.
(m) The Subordinated Notes are subordinate and junior in
right of payment to all "Senior Indebtedness" (as defined in the
Subordinated Indenture) of the Company.
(n) Each of the Regular Trustees of the Trust is an
employee of the Company and has been duly authorized by the
Company to execute and deliver the Declaration.
(o) Neither of the Offerors is an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(p) The Registration Statement is effective under the 1933
Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission.
(q) Each of the Offerors meets the registrant requirements
for use of Form S-3 and Rule 415 under the 1933 Act Regulations;
after giving effect to the sale of the Securities and the sale of
any other of the Registered Securities to be issued prior to the
delivery of the Securities, the aggregate amount of securities
which have been issued and sold by the Offerors pursuant to the
Registration Statement will not exceed the aggregate amount of
theretofore unsold Registered Securities pursuant to the
Registration Statement.
(r) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) 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 or properties of the Trust or the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and (B) neither the
Company or any of its subsidiaries nor the Trust has incurred any
liability, direct or contingent, or entered into any transaction,
other than in the ordinary course of business, that is material
to the Trust or the Company and its subsidiaries taken as a
whole.
Any certificate signed by any officer of the Company or any
Trustee of the Trust and delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and
warranty by the Company or the Trust, as applicable, to each
Underwriter as to the matters covered thereby.
2. Subject to the terms and conditions herein set forth,
the Trust agrees to issue and sell and the Company agrees to
cause the Trust to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly,
to purchase from the Trust, at a purchase price per Security of
$1,000.00, the number of Securities set forth opposite the name
of such Underwriter in Schedule I hereto.
As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale
of the Securities will be used by the Trust to purchase the
Subordinated Notes of the Company, the Company at the Time of
Delivery will pay to Goldman, Sachs & Co., for the accounts of
the several Underwriters, an amount equal to $10.00 per Security
for the Securities to be delivered by the Trust hereunder at the
Time of Delivery.
3. Upon the authorization by you of the release of the
Securities, the several Underwriters propose to offer the
Securities for sale upon the terms and conditions set forth in
this Agreement and the Prospectus.
4. (a) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global
Securities in book-entry form which will be deposited by or on
behalf of the Trust with The Depository Trust Company ("DTC") or
its designated custodian. The Trust will deliver the Securities
to Goldman, Sachs & Co., for the account of each Underwriter,
against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same day)
funds to an account designated by the Trust, by causing DTC to
credit the Securities to the account of Goldman, Sachs & Co. at
DTC. The Trust will cause the certificates representing the
Securities to be made available to Goldman, Sachs & Co. for
checking at least twenty-four hours prior to the Time of Delivery
at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York time, on January 27, 1997 or such other
time and date as Goldman, Sachs & Co., the Trust and the Company
may agree upon in writing. Such time and date for delivery of
the Securities is herein called the "Time of Delivery".
At the Time of Delivery, the Company will pay, or cause to
be paid, the commission payable at the Time of Delivery to the
Underwriters under Section 2 hereof by wire transfer of Federal
(same day) funds to an account designated by Goldman, Sachs & Co.
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7
hereof, including the cross-receipt for the Securities and any
additional documents requested by the Underwriters pursuant to
Section 7(k) hereof, will be delivered at the offices of: Great
Western Financial Corporation, 9200 Oakdale Avenue, Chatsworth,
California 91311 (the "Closing Location"), and the Securities
will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at
1:00 p.m., Los Angeles time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts
of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For
the purposes of this Section 4, "New York Business Day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to
close.
5. Each of the Trust and the Company, jointly and
severally, agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the 1933
Act not later than the Commission's close of business on the
second business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to
the Time of Delivery which shall be disapproved by you promptly
after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to file promptly
all reports and any definitive proxy or information statements
required to be filed by the Trust or the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
1934 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 or sale of the Securities; to advise you, promptly
after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus
relating to the Securities, of the suspension of the
qualification of the Securities or the Subordinated Notes for
offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order.
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities or the
Subordinated Notes for offering and sale under the securities
laws of such jurisdictions as you 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 Securities, provided that in
connection therewith neither the Trust nor the Company shall be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.
(c) Prior to 12:00 p.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and
from time to time, to use its best efforts to furnish the Under-
writers with copies of the Prospectus in New York City as amended
or supplemented in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the
offering or sale of the Securities and if at such time any event
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 during such period to amend or supplement the
Prospectus or to file under the 1934 Act any document
incorporated by reference in the Prospectus in order to comply
with the 1933 Act, the 1934 Act or the 1939 Act, to notify you
and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or
effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the 1933 Act.
(d) In the case of the Company, to make generally available
to its securityholders as soon as practicable, but in any event
not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the 1933
Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the
1933 Act and the 1933 Act Regulations thereunder (including, at
the option of the Company, Rule 158).
(e) During the period beginning from the date hereof and
continuing to and including the Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of, except as
provided hereunder any Securities, any other beneficial interests
in the assets of the Trust, or any preferred securities or any
other securities of the Trust or the Company, as the case may be,
that are substantially similar to the Securities (including any
guarantee of such securities), including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, securities, preferred securities
or any such substantially similar securities of the Trust or the
Company (other than pursuant to employee stock option plans
existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent.
(f) In the case of the Company, to issue the Guarantee
concurrently with the issue and sale of the Securities as
contemplated herein.
(g) If the Trust and the Company elect to rely upon Rule
462(b), the Trust and the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Trust and the Company shall at the time
of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b)
under the 1933 Act.
6. The Company covenants and agrees with the several
Underwriters that it will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the
Securities, the Guarantee and the Subordinated Notes under the
1933 Act and all other expenses in connection with the prepara-
tion, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of
producing any Agreement among Underwriters, this Agreement, the
Securities and the Subordinated Notes and any Blue Sky
Memorandum; (iii) all expenses in connection with the
qualification of the Securities, the Guarantee and the Subordi-
nated Notes for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey(s);
(iv) any fees charged by securities rating services for rating
the Securities and the Subordinated Notes; (v) any filing fees
incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the
National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities and the issuance of the Guarantee and
the Subordinated Notes; (vi) the cost of preparing the Securities
and the Subordinated Notes; (vii) the fees and expenses of any
Trustee, Indenture Trustee and Guarantee Trustee, and any agent
of any trustee and the fees and disbursements of counsel for any
trustee in connection with the Declaration, the Subordinated
Indenture, the Guarantee and the Securities; (viii) the cost of
qualifying the Securities with DTC; and (ix) all other costs and
expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in
this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities
by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters hereunder, as to
the Securities to be delivered at the Time of Delivery, shall be
subject, in their discretion, to the condition that all
representations and warranties and other statements of the Trust
and the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Trust and the Company
shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the 1933 Act and in accordance with Section 5(a) hereof; if
the Trust and the Company have elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement; 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 all requests for additional
information on the part of the Commission shall have been
complied with to your reasonable satisfaction.
(b) Brown & Wood llp, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the matters as you may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass
upon such matters.
In rendering such opinion, such counsel may rely as to
certain matters involving the application of Delaware law as to
the Trust, to the extent deemed proper and specified in such
opinion, upon the opinion of Skadden, Arps, Slate, Meagher & Flom
(Delaware), special counsel to the Trust, which opinion shall be
delivered pursuant to Section 7(e) hereof.
(c) Stephen F. Adams, Esq., Associate General Counsel of
the Company, shall have furnished to you his written opinion,
dated the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) Each of the Company and Great Western Bank, a
Federal Savings Bank (the "Bank") is duly qualified to
conduct business in each jurisdiction in which the conduct
of its business or the ownership or leasing of property
requires such qualification, except for those jurisdictions
where the failure so to qualify will not have a material
adverse effect on the business of the Company and its
subsidiaries taken as a whole.
(ii) To the best of such counsel's knowledge and
information, the issuance and delivery of the Subordinated
Notes and the Guarantee by the Company and the issuance and
sale of the Securities by the Trust pursuant to the terms of
this Agreement and the execution and delivery of this
Agreement, the Declaration, the Securities, the Common
Securities, the Subordinated Indenture, the Subordinated
Notes, and the Guarantee, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust or the Company or
any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its
subsidiaries may be bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
the effect of which would be material to the Company and its
subsidiaries taken as a whole, nor will any such action
result in any violation of any law, administrative
regulation or administrative or court decree, the effect of
which violation would be material to the Company and its
subsidiaries taken as a whole, or the provisions of the
Certificate of Incorporation or bylaws of the Company.
(iii) Such counsel has no knowledge of any action,
suit or proceeding pending or threatened against the Trust
or the Company or any of its subsidiaries or any of their
respective properties before or by any court, governmental
official, commission, board, or other administrative agency
which would materially and adversely affect the financial
condition or results of operations of the Trust or the
Company and its subsidiaries taken as a whole, except as may
be disclosed and correctly summarized in the Prospectus.
(iv) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge
and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933
Act or proceedings therefor initiated or threatened by the
Commission.
(v) No holders of securities of the Offerors have
rights to require either of the Offerors to arrange for the
offer or sale of such securities in connection with the
transactions contemplated by this Agreement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of California or the United States, to the
extent deemed proper and specified in such opinion, upon the
opinion of other counsel who are satisfactory to counsel to the
Underwriters and (B) as to matters of fact, to the extent deemed
proper, on certificates of the Trustees of the Trust and
responsible officers of the Company and its subsidiaries, as
applicable, and public officials.
(d) O'Melveny & Myers llp, counsel for the Company (or such
other counsel satisfactory to the Representatives), shall have
furnished to you such opinion or opinions, dated the Time of
Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and corporate
authority to conduct the business in which it is generally
engaged as described in the Prospectus and to enter into and
perform its obligations under this Agreement and the
Subordinated Indenture, and to issue the Subordinated Notes
and the Guarantee.
(ii) The Bank has been duly organized and is validly
existing and in good standing under the laws of the United
States, has been authorized by the Office of Thrift
Supervision to conduct the business of a federal savings
bank and has the corporate power and corporate authority to
conduct the business in which it is generally engaged as
described in the Prospectus.
(iii) All of the outstanding capital stock of the Bank
is owned of record by the Company.
(iv) The Company is a savings and loan holding
corporation registered under Section 10 of the Home Owners'
Loan Act of 1933, as amended.
(v) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and
has been duly executed and (assuming due execution and
delivery thereof by the Trust and by the Representatives,
for themselves and as Representatives of the Underwriters)
delivered by the Company; and the issuance and delivery of
the Subordinated Notes and the offering of the Guarantee by
the Company and the issuance and sale of the Securities by
the Trust pursuant to the terms of this Agreement and the
execution and delivery of this Agreement, the Declaration,
the Securities, the Common Securities, the Subordinated
Indenture, the Subordinated Notes and the Guarantee, will
not result in any violation of the Certificate of
Incorporation or bylaws of the Company.
(vi) The Bank is a member of the Federal Home Loan
Bank of San Francisco and the savings accounts of the
depositors in the Bank are insured by the Federal Deposit
Insurance Corporation (the "FDIC") in accordance with the
rules and regulations of the FDIC.
(vii) The Declaration has been duly qualified under
the 1939 Act.
(viii) All of the outstanding Common Securities of the
Trust are owned of record by the Company.
(ix) The Guarantee has been duly authorized by all
necessary corporate action on the part of the Company, has
been duly executed and (assuming due authorization,
execution and delivery thereof by the Guarantee Trustee)
delivered by the Company, and the Guarantee constitutes a
legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms, except as may be limited by the Bankruptcy Exceptions
and by the unenforceability under certain circumstances of
waivers of rights granted by law where the waivers are
against public policy or prohibited by law; and the
Guarantee has been duly qualified under the 1939 Act.
(x) The Subordinated Indenture has been duly
authorized by all necessary corporate action on the part of
the Company, has been duly executed and (assuming due
authorization, execution and delivery by the Indenture
Trustee) delivered by the Company and constitutes a legally
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
may be limited by the Bankruptcy Exceptions; the
Subordinated Indenture has been duly qualified under the
1939 Act.
(xi) The Subordinated Notes are in the form contem-
plated by the Subordinated Indenture, and have been duly
authorized by all necessary corporate action on the part of
the Company and, when authenticated and delivered by the
Indenture Trustee in accordance with the provisions of the
Subordinated Indenture and delivered to the Trust in
exchange for the consideration therefor, will constitute
legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as may be limited by the Bankruptcy
Exceptions.
(xii) The Declaration has been duly authorized by all
necessary corporate action on the part of the Company, has
been duly executed and (assuming due authorization,
execution and delivery by the Delaware Trustee and the
Property Trustee) delivered by the Company and the Regular
Trustees and constitutes a legally valid and binding
obligation of the Company, enforceable against the Company
in accordance with its terms, except as may be limited by
the Bankruptcy Exceptions.
(xiii) The Company is not an "investment company" nor
"controlled" by an "investment company" within the meaning
of the 1940 Act. The Trust is not subject to registration
as an "investment company" under the 1940 Act.
(xiv) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge
and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933
Act or proceedings therefor initiated or threatened by the
Commission.
(xv) No consent, authorization or order of, or filing
of the Prospectus with, any California or federal
governmental authority is required in connection with the
execution and delivery of this Agreement, the Declaration,
the Subordinated Indenture, the Guarantee, the offering of
the Guarantee, or the issuance and delivery of the
Subordinated Notes, nor the issuance and sale of the
Securities by the Trust pursuant to the terms of this
Agreement, other than such authorizations and orders as have
been applied for under the 1934 Act and such consents,
authorizations and orders as have been obtained or filings
as have been made, and except as may be required under state
securities or blue sky laws with respect to which such
counsel need express no opinion.
(xvi) The Registration Statement, as of the date it
was declared effective by the Commission, appeared on its
face to comply in all material respects with the
requirements as to form for registration statements on Form
S-3 under the 1933 Act and the 1933 Act Regulations, except
that no opinion need be expressed concerning the financial
statements and other financial and statistical information
contained or incorporated by reference therein or the
Forms T-1.
(xvii) Each of the documents filed pursuant to the 1934
Act and incorporated by reference in the Prospectus appeared
on their face to comply in all material respects with the
requirements as to form for reports on Form 10-K, Form 10-Q
and Form 8-K, as the case may be, under the 1934 Act and the
1934 Act Regulations thereunder in effect at the respective
dates of their filing, except that no opinion need be
expressed concerning the financial statements and other
financial and statistical information contained or
incorporated by reference therein.
(xviii) The authorized capital stock of the Company
consists of 200,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock, par value $1.00 per
share.
(xix) The information in the Base Prospectus under the
captions "Description of Debt Securities," "Description of
Preferred Stock," "Description of Depositary Shares,"
"Description of Common Stock," "Description of Preferred
Securities," "Description of Guarantee" and "Description of
Securities Warrants" and in the Prospectus Supplement under
the captions "Risk Factors," "Description of the Offered
Capital Securities" (except under the sub-caption "Book-
Entry Only Issuance--The Depository Trust Company"),
"Description of the Subordinated Notes" and "Effect of
Obligations Under the Subordinated Notes and the Guarantee,"
insofar as it purports to summarize matters of California,
New York or federal law applicable to the Company or the
provisions of the debt securities, capital stock and
securities warrants of the Company and the Securities, the
Subordinated Notes, and the Guarantee, is correct in all
material respects.
(xx) The Trust will be classified as a grantor trust
and not as an association taxable as a corporation for
United States federal income tax purposes; and although the
discussion set forth in the Prospectus Supplement under the
caption "Certain Federal Income Tax Consequences" does not
purport to discuss all possible United States federal income
tax consequences of the purchase, ownership and disposition
of Securities, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States
federal income tax consequences of the purchase, ownership
and disposition of the Securities under current law.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the federal laws of the United States of America, the
laws of the States of California and New York and the General
Corporation Law of the State of Delaware, to the extent deemed
proper and specified in such opinion, upon the opinion of other
counsel who are satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent deemed proper, on
certificates of the Trustees of the Trust and responsible
officers of the Company and the Bank and public officials.
(e) Skadden, Arps, Slate, Meagher & Flom (Delaware),
special Delaware counsel for the Trust, shall have furnished to
you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the extent set forth below.
To the extent used herein, (a) "Applicable Law" shall mean only
the Delaware Business Trust Act and only those other laws of the
State of Delaware which, in such counsel's experience, are
normally applicable to transactions of the type contemplated by
this Agreement, and (b) "Governmental Approval" shall mean any
consent, approval, license, authorization or validation of, or
filing, recording or registration with, any governmental
authority pursuant to Applicable Law.
(i) The issuance and sale by the Trust of the
Securities and Common Securities; the execution, delivery
and performance by the Trust of this Agreement; the
consummation by the Trust of the transactions contemplated
herein and therein; and compliance by the Trust with its
obligations hereunder and thereunder have been duly
authorized by all necessary trust action on the part of the
Trust and do not and will not violate (i) any of the
provisions of the Certificate of Trust or the Declaration or
(ii) any Applicable Law; except that such counsel does not
express any opinion in this paragraph with respect to state
securities (blue sky) laws.
(ii) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act; all filings required under the
laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a business trust have
been made; under the Delaware Business Trust Act and the
Declaration, the Trust has all necessary power and authority
to own property and to conduct its business as described in
the Registration Statement and the Prospectus and to enter
into and perform its obligations under this Agreement, the
Securities and the Common Securities.
(iii) The Common Securities have been duly authorized
for issuance and when issued, delivered and paid for, will
be validly issued and, except as otherwise provided in
Section 10.1 of the Declaration, fully paid and
non-assessable undivided beneficial interests in the assets
of the Trust; and the issuance of the Common Securities is
not subject to preemptive or other similar rights under the
Delaware Business Trust Act or the Declaration.
(iv) The Securities have been duly authorized for
issuance and, subject to the qualification set forth below,
when issued, delivered and paid for in accordance with this
Agreement, will be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets
of the Trust; the holders of the Securities will be entitled
to the same limitation of personal liability extended to
stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware;
and the issuance of the Securities is not subject to
preemptive or other similar rights under the Delaware
Business Trust Act or the Declaration. Such counsel may
bring to the attention of the Underwriters that the holders
of Securities may be obligated, pursuant to the Declaration,
to (i) provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers
of Securities and the issuance of replacement Securities,
and (ii) provide security and indemnity in connection with
requests of or directions to the Property Trustee to
exercise its rights and powers under the Declaration.
(v) Assuming the due authorization, execution and
delivery of the Declaration by the Delaware Trustee, the
Property Trustee, the Company and the Regular Trustees, the
Declaration constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(vi) No Governmental Approval is required in
connection with the issuance and sale of the Common
Securities or the offering of the Securities, the
Subordinated Notes, or the Guarantee, except for such
approvals as may be required under the state securities
(blue sky) laws or such approvals which have been obtained,
taken, or made and are in full force and effect.
(vii) The information in the Base Prospectus under the
caption "Description of Preferred Securities" and in the
Prospectus Supplement under the caption "Description of the
Offered Capital Securities" (except under the sub-caption
"Book-Entry Only Issuance--The Depository Trust Company"),
insofar as such information constitutes a summary of
Delaware law or of the documents therein described that are
governed by Delaware law, or legal conclusions, have been
reviewed by them and is, in all material respects, an
accurate summary of such provisions.
(viii) This Agreement has been duly authorized,
executed and delivered by the Trust.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the General Corporation Law of the State of Delaware,
to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent
deemed proper by the Representatives, on certificates of Trustees
of the Trust and public officials.
(f) Pepper, Hamilton & Scheetz, counsel for the Property
Trustee under the Declaration, and Guarantee Trustee under the
Guarantee, shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) First Chicago is a national banking association
with trust powers, duly organized, validly existing and in
good standing under the laws of the United States with all
necessary corporate power and authority to execute, deliver,
and to carry out and perform its obligations under the terms
of, the Declaration and the Guarantee.
(ii) The execution, delivery and performance by the
Property Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the
Guarantee have been duly authorized by all necessary
corporate action on the part of the Property Trustee and the
Guarantee Trustee. The Declaration and the Guarantee have
been duly executed and delivered by the Property Trustee and
the Guarantee Trustee, respectively, and constitute the
legal, valid and binding obligation of the Property Trustee
and the Guarantee Trustee, respectively, enforceable against
the Property Trustee and the Guarantee Trustee,
respectively, in accordance with their terms, except as may
be limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Guarantee by the Property Trustee and
the Guarantee Trustee, respectively, do not conflict with or
constitute a breach of the charter or by-laws of the
Property Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee or the Guarantee Trustee
of the Declaration or the Guarantee, respectively.
(g) In giving their opinions required by subsections (b)
and (d), respectively, of this Section, O'Melveny & Myers llp and
Brown & Wood llp shall each additionally state that in connection
with such counsel's participation in the preparation of the
Registration Statement and Prospectus (exclusive of the documents
incorporated by reference therein), such counsel has not
independently verified the accuracy, completeness or fairness of
the statements contained or incorporated therein and the
limitations inherent in the examination made by such counsel and
the knowledge available to such counsel are such that such
counsel is unable to assume, and does not assume, any responsi-
bility for the accuracy, completeness or fairness of the
statements contained or incorporated in the Registration
Statement or Prospectus or the documents incorporated therein
(except as otherwise specifically stated in clause (xix) of
Subsection (d) above). However, on the basis of such counsel's
examination and participation in conferences in connection with
the preparation of the Registration Statement and Prospectus
(exclusive of the documents incorporated by reference therein),
such counsel shall state that such counsel does not believe that
the Registration Statement and the documents incorporated by
reference therein, considered as a whole at the date the
Registration Statement was declared effective by the Commission,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus and the documents incorporated by reference therein,
considered as a whole at the date of the Prospectus and at the
Time of Delivery, 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 the light
of the circumstances under which they were made, not misleading.
Such counsel need express no opinion or belief, however, as to
the financial statements or schedules contained in or excluded
from the Registration Statement or the Prospectus or the
documents incorporated by reference therein, or incorporated by
reference in the Registration Statement or the Prospectus or such
incorporated documents or those parts of the Registration
Statement that constitute the Forms T-1.
(h) Pepper, Hamilton & Scheetz, counsel to the Delaware
Trustee, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) First Chicago Delaware Inc. is a Delaware
corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full
corporate power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of,
the Declaration.
(ii) The execution, delivery and performance by the
Delaware Trustee of the Declaration has been duly authorized
by all necessary corporate action on the part of the
Delaware Trustee. The Declaration has been duly executed
and delivered by the Delaware Trustee and constitutes the
legal, valid and binding obligation of the Delaware Trustee,
enforceable against the Delaware Trustee in accordance with
its terms, except as enforcement may be limited by the
Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration by the Delaware Trustee do not conflict with or
constitute a breach of the charter or by-laws of the
Delaware Trustee.
(iv) No consent, approval or authorization of, or
registration with or notice to, any federal or Delaware
banking authority is required for the execution, delivery or
performance by the Delaware Trustee of the Declaration.
(i) Price Waterhouse llp shall have furnished to you a
letter, dated as of the Time of Delivery, in form and substance
reasonably satisfactory to you, containing statements and
information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained or
incorporated by reference in the Registration Statement and the
Prospectus.
(j) (i) None of the Trust, the Company or any of the
Company's subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus as amended prior to the date of this
Agreement any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order, decree or regulation, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of
this Agreement, and (ii) since the respective dates as of which
information is given in the Prospectus as amended prior to the
date of this Agreement there shall not have been any change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of this Agreement, the effect of
which, in any such case described in Clause (i) or (ii), is in
the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in
the manner contemplated in the Prospectus.
(k) Prior to the Time of Delivery, the Company and the
Trust shall have furnished to you certificates of officers of the
Trust and the Company satisfactory to you as to the accuracy of
the representations and warranties of the Trust and the Company
herein at and as of the Time of Delivery, as to the performance
by the Trust and the Company of all of its obligations hereunder
to be performed at or prior to the Time of Delivery, as to the
matters set forth in subsections (a) and (j) of this Section and
as to such other matters as you may reasonably request.
(l) On or after the date hereof and on or prior to the Time
of Delivery, there shall not have occurred any of the following:
(i) the outbreak or escalation of hostilities
involving the United States or the declaration by the
United States of a national emergency or war or the
occurrence of any other calamity or crisis if the
effect of such event specified in this clause (i) in
your judgment makes it impracticable or inadvisable to
proceed with the purchase of the Securities, on the
terms and in the manner contemplated in the Prospectus;
(ii) any downgrading in the rating accorded the
Company's debt securities or preferred stock by any
"nationally recognized statistical rating
organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the
1933 Act, or any public announcement by any such
organization that it has under surveillance or review,
with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(iii) trading in securities generally, or in the
securities of the Company, on the New York Stock
Exchange shall have been suspended or materially
limited (excluding a limitation on trading referred to
in paragraph 2080A (Limitations on Trading During Significant
Market Declines) of the Rules of Board--Auction Market-
-Bids and Offers of the New York Stock Exchange Guide)
or minimum prices shall have been established on such
exchange; or
(iv) a banking moratorium shall have been declared
by Federal, California or New York authorities.
8. (a) The Company and the Trust, jointly and severally
will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that
neither the Company nor the Trust shall be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by any Underwriter through Goldman, Sachs & Co. expressly
for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company and the Trust against any losses, claims, damages or
liabilities to which the Company and the Trust may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse the Company and the
Trust for any legal or other expenses reasonably incurred by the
Company and the Trust in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under such
subsection, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemni-
fying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise
or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the
Company and the Trust on the one hand and the Underwriters on the
other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to
give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Trust on the one hand
and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative
benefits received by the Company and the Trust on the one hand
and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Trust
bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth 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 information supplied
by the Company and the Trust on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission. The Company, the Trust and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such 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 1933 Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Trust under this
Section 8 shall be in addition to any liability which the Company
and the Trust may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the 1933 Act; and the
obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or the
Trust and to each person, if any, who controls the Company or the
Trust within the meaning of the 1933 Act.
9. (a) If any Underwriter shall default in its obligation
to purchase the Securities which it has agreed to purchase
hereunder at the Time of Delivery, you may in your discretion
arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Securities, then the Company and
the Trust shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms.
In the event that, within the respective prescribed periods, you
notify the Company and the Trust that you have so arranged for
the purchase of such Securities, or the Company and the Trust
notifies you that it has so arranged for the purchase of such
Securities, you or the Company and the Trust shall have the right
to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company and
the Trust, jointly and severally, agree to file promptly any
amendments to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to
such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or
Underwriters by you and the Company and the Trust as provided in
subsection (a) above, the aggregate number of such Securities
which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at the
Time of Delivery, then the Company and the Trust shall have the
right to require each non-defaulting Underwriter to purchase the
number of Securities which such Underwriter agreed to purchase
hereunder at the Time of Delivery and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share
(based on the number of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or
Underwriters by you and the Company and the Trust as provided in
subsection (a) above, the aggregate number of such Securities
which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Securities to be purchased at the Time of
Delivery, or if the Company and the Trust shall not exercise the
right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter
or the Company or the Trust, except for the expenses to be borne
by the Company and the Trust and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company
or the Trust and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company or the
Trust, or any officer or director or controlling person or
administrator of the Company or the Trust, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to
Section 9 hereof, neither the Company nor the Trust shall then be
under any liability to any Underwriter except as provided in
Sections 6 and 8 hereof; but, if for any other reason (other than
as a result of the failure of any of the conditions set forth in
Section 7(l)(i), (iii) or (iv) hereof), any Securities are not
delivered by or on behalf of the Company or the Trust as provided
herein, the Company and the Trust jointly and severally will
reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters
in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company or the Trust shall
then be under no further liability to any Underwriter except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by you
jointly or by Goldman, Sachs & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to you
as the Representatives in care of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration
Department; and if to the Company or the Trust shall be delivered
or sent by mail to the address of the Company or the Trust,
respectively set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied
to the Company and the Trust by you upon request. Any such
statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company, the Trust and,
to the extent provided in Sections 8 and 10 hereof, the officers
and directors of the Company, the Trust and each person who
controls the Company, the Trust or any Underwriter, and their
respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us five counterparts hereof, and upon
the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters
and the Company and the Trust. It is understood that your
acceptance of this letter on behalf of each of the Underwriters
is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Great Western Financial Corporation
By: __/s/ Bruce F. Antenberg___
Name: Bruce F. Antenberg
Title: Senior Vice President-
Finance and Treasurer
Great Western Financial Trust II
By: __/s/ Bruce F. Antenberg___
Bruce F. Antenberg, as Regular
Trustee
By: __/s/ J. Lance Erikson___
J. Lance Erikson, as Regular
Trustee
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Lehman Brothers Inc.
Smith Barney Inc.
By: __/s/ Goldman, Sachs & Co.___
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Underwriters
Total Number
of Securities to
Underwriters be Purchased
Goldman, Sachs & Co. 75,000
Merrill Lynch, Pierce, Fenner & Smith 75,000
Incorporated
Lehman Brothers Inc. 75,000
Smith Barney Inc. 75,000
------
Total 300,000
=======
GREAT WESTERN FINANCIAL CORPORATION
TO
HARRIS TRUST AND SAVINGS BANK, as Trustee
THIRD SUPPLEMENTAL INDENTURE
dated as of January 22, 1997
8.206% Subordinated Deferrable
Interest Notes Due 2027
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions . . . . . . . . . . . . 2
Section 1.1. Definition of Terms . . . . . . . . . . . . . . 2
ARTICLE II
General Terms and Conditions of the Notes. . . . . 5
Section 2.1. Designation and Principal Amount. . . . . . . . 5
Section 2.2. Maturity. . . . . . . . . . . . . . . . . . . . 5
Section 2.3. Form and Payment. . . . . . . . . . . . . . . . 6
Section 2.4. Global Note . . . . . . . . . . . . . . . . . . 6
Section 2.5. Interest. . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
Redemption of the Notes . . . . . . . . . 9
Section 3.1. Tax Event Redemption. . . . . . . . . . . . . . 9
Section 3.2. Capital Treatment Event Redemption. . . . . . . 9
Section 3.3. Optional Redemption by Company. . . . . . . . . 9
Section 3.4. Redemption Procedures . . . . . . . . . . . . . 9
Section 3.5. No Sinking Fund . . . . . . . . . . . . . . . . 10
ARTICLE IV
Extension of Interest Payment Period . . . . . . 10
Section 4.1. Extension of Interest Payment Period. . . . . . 10
Section 4.2. Notice of Extension . . . . . . . . . . . . . . 10
ARTICLE V
Expenses . . . . . . . . . . . . . 11
Section 5.1. Payment of Expenses . . . . . . . . . . . . . . 11
ARTICLE VI
Subordination. . . . . . . . . . . . 12
Section 6.1. Agreement to Subordinate. . . . . . . . . . . . 12
ARTICLE VII
Covenants. . . . . . . . . . . . . 12
Section 7.1. Limitation on Dividends; Transactions with
Affiliates. . . . . . . . . . . . . . . . . . . 12
Section 7.2. Covenants as to the Trust . . . . . . . . . . . 13
ARTICLE VIII
Events of Default. . . . . . . . . . . 13
Section 8.1. Events of Default . . . . . . . . . . . . . . . 13
Section 8.2. Waiver of Past Defaults . . . . . . . . . . . . 14
ARTICLE IX
Form of Note . . . . . . . . . . . . 14
Section 9.1. Form of Note. . . . . . . . . . . . . . . . . . 14
ARTICLE X
Original Issue of Notes . . . . . . . . . 20
Section 10.1. Original Issue of Notes . . . . . . . . . . . . 20
ARTICLE XI
Miscellaneous. . . . . . . . . . . . 20
Section 11.1. Ratification of Indenture . . . . . . . . . . . 20
Section 11.2. Trustee Not Responsible for Recitals. . . . . . 21
Section 11.3. Governing Law . . . . . . . . . . . . . . . . . 21
Section 11.4. Separability . . . . . . . . . . . . . . . . . 21
Section 11.5. Counterparts. . . . . . . . . . . . . . . . . . 21
Section 11.6. Acknowledgement of Rights of Holders of
Capital Securities. . . . . . . . . . . . . . . 21
Section 11.7. Supplemental Indentures . . . . . . . . . . . . 21
<PAGE>
THIRD SUPPLEMENTAL INDENTURE, dated as of January 22, 1997
(the "Third Supplemental Indenture"), between Great Western
Financial Corporation, a Delaware corporation (the "Company"),
Harris Trust and Savings Bank, as trustee (the "Trustee") under the
Indenture, dated as of September 12, 1990, as amended and
supplemented by the First Supplemental Indenture, dated as of April
30, 1993, and the Second Supplemental Indenture, dated as of
December 6, 1995, between the Company and the Trustee (the
"Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of the Company's
unsecured and subordinated debt securities to be issued from time
to time in one or more series as might be determined by the Company
under the Indenture, in an unlimited aggregate principal amount
which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its
Securities to be known as its "8.206% Subordinated Deferrable
Interest Notes due 2027" (the "Notes"), the form and substance of
such Notes and the terms, provisions and conditions thereof to be
set forth as provided in the Indenture and this Third Supplemental
Indenture;
WHEREAS, Great Western Financial Trust II, a Delaware
statutory business trust (the "Trust"), has offered to the public
$300 million aggregate liquidation amount of its 8.206% Capital
Securities, Series A (the "Capital Securities"), representing
undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering in $300 million
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this Third Supplemental Indenture and all requirements
necessary to make this Third Supplemental Indenture a valid
instrument in accordance with its terms and to make the Notes, when
executed by the Company and authenticated and delivered by the
Trustee, the valid obligations of the Company have been performed,
and the execution and delivery of this Third Supplemental Indenture
has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance
of the Notes by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the
Notes and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when
used in this Third Supplemental Indenture;
(b) a term defined anywhere in this Third Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this Third Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) for purposes of the Notes only, the following terms
have the meanings given to them in the Declaration
notwithstanding a contrary definition in the Indenture:
(i) Business Day; (ii) Capital Securities Guarantee;
(iii) Common Security; (iv) Delaware Trustee; (v)
Depositary; (vi) Dissolution Tax Opinion; (vii)
Ministerial Action; (viii) No Recognition Opinion;
(ix) Property Trustee; (x) Redemption Tax Opinion;
(xi) Regular Trustee; (xii) Special Event; (xiii) Trust
Securities; (xiv) Tax Event; (xv) Underwriting Agreement;
and
(g) the following terms have the meanings given to them in
this Section 1.1(g):
"Additional Interest" has the meaning given such term in
Section 2.5(c).
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate plus (i) 1.10% if such Redemption Date
occurs on or before February 1, 1998, or (ii) .50% if such
Redemption Date occurs after February 1, 1998.
"Calculation Date" means the third Business Day preceding a
Redemption Date.
"Capital Treatment Event" means that the Company (or its
successor) is, becomes or pursuant to law or regulation will become
within 180 days, subject to the capital requirements under which
all or a portion of the Capital Securities would not constitute
Tier 1 Capital applied as if the Company (or its successor) were a
bank holding company (as that concept is used in the guidelines or
regulations issued by the Board of Governors of the Federal Reserve
System as of January 22, 1997 or its then equivalent).
"Comparable Treasury Issue" means, with respect to any
Redemption Date, the United States Treasury security selected by
the Quotation Agent as having a maturity comparable to the
Remaining Life that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three
months after February 1, 2007, the two most closely corresponding
United States Treasury securities shall be used as the Comparable
Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (a) the average of five Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (b) if the
Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Compound Interest" has the meaning given such term in Section
4.1.
"Coupon Rate" has the meaning given such term in Section
2.5(a).
"Deferred Interest" means Additional Interest and Compound
Interest.
"Declaration" means the Amended and Restated Declaration of
Trust of the Trust dated as of January 22, 1997.
"Dissolution Event" means that as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved
in accordance with the Declaration, and the Notes held by the
Property Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust pro rata in accordance with the
Declaration.
"Extended Interest Payment Period" has the meaning given such
term in Section 4.1.
"Global Note" has the meaning given such term in Section
2.4(a)(i).
"Make-Whole Amount" means, with respect to any Note, an amount
equal to the greater of (a) 100% of the principal amount of the
Note or (b) as determined by the Quotation Agent, the sum of the
present values of the principal amount and premium payable as part
of the Redemption Price with respect to an optional redemption of
such Note on February 1, 2007, together with the present values of
the scheduled payments of interest for the Remaining Life, in each
case discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate.
"Maturity Date" means the date on which the Notes mature and
on which the principal shall be due and payable together with all
accrued and unpaid interest thereon, including Deferred Interest,
if any.
"Non Book-Entry Capital Securities" has the meaning given such
term in Section 2.4(a)(ii).
"Primary Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York.
"Quotation Agent" means Goldman, Sachs & Co. and its
successors; provided, however, that if the foregoing shall cease to
be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer.
"Redemption Price" means, in the case of any redemption
permitted hereunder on or after February 1, 2007, a price equal to
the following prices, expressed in percentages of the principal
amount, plus any accrued and unpaid interest, including any
Compound Interest and Additional Interest, to the date fixed for
redemption. If redeemed during the 12-month period beginning
February 1:
Year Redemption Price
---- ----------------
2007 104.1030%
2008 103.6927%
2009 103.2824%
2010 102.8721%
2011 102.4618%
2012 102.0515%
2013 101.6412%
2014 101.2309%
2015 100.8206%
2016 100.4103%
and at 100% on or after February 1, 2017. Redemption Price
means in the case of a redemption permitted hereunder prior to
February 1, 2007 a price equal to the Make-Whole Amount, plus any
accrued interest, including any Compound Interest and Additional
Interest, to the date fixed for redemption.
"Reference Treasurer Dealer" means (a) the Quotation Agent and
(b) any other Primary Treasury Dealer selected by the Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the Calculation Date.
"Remaining Life" means the period from the Redemption Date to
February 1, 2007.
"Treasury Rate" means, with respect to any Redemption Date,
(a) the yield, under the heading which represents the average for
the week immediately prior to the Calculation Date, appearing in
the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to
the Remaining Life (if no maturity is within three months before or
after the Remaining Life, yields for the two published maturities
most closely corresponding to the Remaining Life shall be
determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to
the nearest month) or (b) if such release (or any successor
release) is not published during the week preceding the Calculation
Date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price on the Calculation Date for
such Redemption Date.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1. Designation and Principal Amount.
There is hereby authorized a series of Debt Securities
designated the "8.206% Subordinated Deferrable Interest Notes due
2027", limited in aggregate principal amount to Three Hundred Nine
Million Two Hundred Seventy-Nine Thousand Dollars ($309,279,000),
which amount shall be as set forth in any written Company Order for
the authentication and delivery of Notes pursuant to Section 303 of
the Indenture.
Section 2.2. Maturity.
The Maturity Date will be February 1, 2027.
Section 2.3. Form and Payment.
Except as provided in Section 2.4, the Notes shall be issued
as Registered Debt Securities in fully registered certificated form
without interest coupons. So long as the Holder of any Notes is
the Property Trustee, the payment of the principal of, premium, if
any, and interest, including Deferred Interest, if any, on such
Notes held by the Property Trustee will be made at such place and
to such account as may be designated by the Property Trustee.
Section 2.4. Global Note.
(a) In connection with a Dissolution Event:
(i) the Notes in certificated form may be presented to
the Trustee by the Property Trustee in exchange for
one or more global Notes in an aggregate principal
amount equal to all Outstanding Notes (a "Global
Note") to be registered in the name of the
Depositary, or its nominee, and delivered by the
Trustee to or for the account of the Depositary for
crediting to the accounts of its participants
pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation
shall execute a Global Note in such aggregate
principal amount and deliver the same to the
Trustee for authentication and delivery in
accordance with the Indenture and this Third
Supplemental Indenture. Payments on the Notes
issued as a Global Note will be made to the
Depositary; and
(ii) if any Capital Securities are held in non book-
entry certificated form, the Notes in certificated
form may be presented to the Trustee by the
Property Trustee and any Capital Security
Certificate which represents Capital Securities
other than Capital Securities held by the
Depositary or its nominee ("Non Book-Entry Capital
Securities") will be deemed to represent beneficial
interests in Notes presented to the Trustee by the
Property Trustee having an aggregate principal
amount equal to the aggregate liquidation amount of
the Non Book-Entry Capital Securities until such
Capital Security Certificates are presented to the
Debt Securities Registrar for transfer or
reissuance at which time such Capital Security
Certificates will be cancelled and a Note
registered in the name of the holder of the Capital
Security Certificate or the transferee of the
holder of such Capital Security Certificate, as the
case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the
Capital Security Certificate cancelled will be
executed by the Company and delivered to the
Trustee for authentication and delivery in
accordance with the Indenture and this Third
Supplemental Indenture. On issue of such Notes,
Notes with an equivalent aggregate principal amount
that were presented by the Property Trustee to the
Trustee will be deemed to have been cancelled.
(b) A Global Note may be transferred, in whole but not in
part only to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company
or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary or if
at any time the Depositary for such series shall no
longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor
Depositary for such series is not appointed by the
Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case
may be, the Company will execute, and, subject to the
Indenture, the Trustee will authenticate and deliver the
Notes in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Note
in exchange for such Global Note. In addition, the
Company may at any time determine that the Notes shall no
longer be represented by a Global Note. In such event,
the Company will execute and, subject to Article Two of
the Indenture, the Trustee will authenticate and deliver
the Notes in definitive registered form without coupons,
in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the
Global Note in exchange for such Global Note. Upon the
exchange of the Global Note for such Notes in definitive
registered form without coupons, in authorized
denominations, the Global Note shall be cancelled by the
Trustee. Such Notes in definitive registered form issued
in exchange for the Global Note 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. The Trustee shall deliver such Notes to the
Depositary for delivery to the Persons in whose names
such Notes are so registered.
Section 2.5. Interest.
(a) Each Note will bear interest at the rate of 8.206% per
annum (the "Coupon Rate") from the original date of
issuance until the principal thereof becomes due and
payable, and on any overdue principal and premium, if
any, and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded
semi-annually, payable (subject to the provisions of
Article Four of this Third Supplemental Indenture) semi-
annually in arrears on February 1 and August 1 of each
year (each, an "Interest Payment Date", commencing on
August 1, 1997), to the Person in whose name such Note
or any predecessor Note is registered, at the close of
business on the regular record date for such interest
installment, which, in respect of any Notes of which the
Property Trustee is the Holder of or a Note, shall be the
close of business on the Business Day next preceding that
Interest Payment Date. Notwithstanding the foregoing
sentence, if the Capital Securities are no longer in
book-entry only form or if pursuant to the Indenture the
Notes are not represented by a Global Note, the Company
may select a regular record date for such interest
installment which shall be any date at least one Business
Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the following sentence,
the amount of interest payable for any period shorter
than a full semi-annual period for which interest is
computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event
that any date on which interest is payable on the Notes
is not a Business Day, then 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,
notwithstanding the provisions of Section 113 of the
Indenture, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(c) If at any time while the Property Trustee is the Holder
of any Notes, the Trust or the Property Trustee is
required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any
other taxing authority, then, in any case, the Company
will pay as additional interest ("Additional Interest")
on the Notes held by the Property Trustee, such
additional amounts as shall be required so that the net
amounts received and retained by the Trust and the
Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal
to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or
other governmental charges been imposed.
ARTICLE III
REDEMPTION OF THE NOTES
Section 3.1. Tax Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) the Regular Trustees shall have been informed by
independent tax counsel experienced in such matters that
a No Recognition Opinion cannot be delivered to the
Trust, then the Company shall have the right upon not
less than 30 days nor more than 60 days notice to the
Holders of the Notes to redeem the Notes in whole or in
part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event (the "90-Day
Period"), provided that, if at the time there is
available to the Company the opportunity to eliminate,
within the 90-Day Period, the Tax Event by taking some
Ministerial Action, the Company shall pursue such
Ministerial Action in lieu of redemption, and provided,
further, that the Company shall have no right to redeem
the Notes while the Trust is pursuing any Ministerial
Action pursuant to its obligations under the Declaration.
Section 3.2. Capital Treatment Event Redemption.
If a Capital Treatment Event has occurred and is continuing,
the Company shall have the right upon not less than 30 days nor
more than 60 days notice to the Holders of the Notes to redeem the
Notes in whole (but not in part) for cash at the Redemption Price
at any time within 90 days following the occurrence of such Capital
Treatment Event.
Section 3.3. Optional Redemption by Company.
Subject to the provisions of Section 3.4(b) and to the
provisions of Article Eleven of the Indenture, except as otherwise
may be specified in this Third Supplemental Indenture, the Company
shall have the right to redeem the Notes, in whole or in part, from
time to time, on or after February 1, 2007, at the Redemption
Price.
Section 3.4. Redemption Procedures.
Any redemption pursuant to this Article III will be made upon
not less than 30 nor more than 60 days' notice to the Holder of the
Notes at the Redemption Price. If the Notes are only partially
redeemed, the Notes will be redeemed pro rata or by lot or by any
other method utilized by the Trustee; provided that, if at the time
of redemption the Notes are registered as a Global Note, the
Depositary shall determine by lot the principal amount of such
Notes held by each Holder of Notes to be redeemed. The Redemption
Price shall be paid prior to 12:00 noon, New York City time, on the
date of such redemption or at such earlier time as the Company
determines provided that the Company shall deposit with the Trustee
an amount sufficient to pay the Redemption Price by 10:00 a.m. on
the date such Redemption Price is to be paid.
Section 3.5. No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time during the term
of the Notes, from time to time, to defer payments of interest by
extending the interest payment period of such Notes for up to 10
consecutive semi-annual periods (the "Extended Interest Payment
Period"). To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear
interest thereon at the Coupon Rate compounded semi-annually for
each semi-annual period of the Extended Interest Payment Period
("Compound Interest"). At the end of the Extended Interest Payment
Period the Company shall pay all interest accrued and unpaid on the
Notes, including any Deferred Interest that shall be payable, to
the Holders of the Notes in whose names the Notes are registered in
the Security Register on the first record date after the end of the
Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Company may further extend
such period, provided that such period together with all such
further extensions thereof shall not exceed 10 consecutive semi-
annual periods. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then
due, the Company may commence a new Extended Interest Payment
Period as if no Extended Interest Payment Period had previously
been declared, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment
Period, except at the end thereof.
Section 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder of
the Notes at the time the Company selects an Extended
Interest Payment Period, the Company shall give written
notice to the Regular Trustees, the Property Trustee and
the Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (a)
the next succeeding date on which Distributions on the
Trust Securities issued by the Trust are payable, or (b)
the date the Trust is required to give notice of the
record date or the date such Distributions are payable to
holders of the Capital Securities issued by the Trust,
but in any event at least one Business Day before such
record date.
(b) If the Property Trustee is not the only Holder of the
Notes at the time the Company selects an Extended
Interest Payment Period, the Company shall give the
Holders of the Notes and the Trustee written notice of
its selection of such Extended Interest Payment Period 10
Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date the
Company is required to give notice of the record or
payment date of such interest payment to Holders of the
Notes.
(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 4.2
shall be counted as one of the 10 semi-annual periods
permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Notes to the Property Trustee in connection with the sale of the
Trust Securities by the Trust, and in connection with the
maintenance of the Trust for so long as the Trust Securities are
outstanding, the Company, in its capacity as borrower with respect
to the Notes, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Notes, including commissions to the
underwriters payable pursuant to the Underwriting
Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section
607 of the Indenture;
(b) pay all debts and obligations of the Trust (other than
with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to,
costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the underwriters in
connection therewith), the fees and expenses of the
Regular Trustees, the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation
of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or
bookkeeping services, expenses of printing and engraving
and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs
and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its
assets) and all liabilities, costs and expenses with
respect to such taxes of the Trust; and
(d) pay any and all fees and expenses related to the
enforcement by the Property Trustee of the rights of the
holders of the Capital Securities.
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Notes
issued hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that all Notes shall be issued subject to the
provisions of Article THIRTEEN of the Indenture; and each Holder of
a Note, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
ARTICLE VII
COVENANTS
Section 7.1. Limitation on Dividends; Transactions with
Affiliates.
(a) If Notes are issued to the Trust or a trustee of the
Trust and (i) there shall have occurred any event that would
constitute an Event of Default or (ii) the Company shall be in
default with respect of its payment of any obligations under
the Capital Securities Guarantee, then (A) the Company shall
not, and shall cause any subsidiary of the Company that is not
a wholly owned subsidiary of the Company not to, declare or
pay any dividend on, make any distributions with respect to,
or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock or the capital stock
of any such subsidiary, and (B) the Company shall not make any
payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company which rank pari passu
with or junior to the Notes, provided that the foregoing
restriction in clause (A) does not apply to any stock
dividends paid by the Company, or any of its subsidiaries,
where the dividend stock is the same stock as that on which
the dividend is being paid.
(b) If Notes are issued to the Trust or a trustee of the
Trust and the Company shall have given notice of its election
to defer payments of interest on the Notes by extending the
interest payment period as provided in Article IV hereof and
such period, or any extension thereof, shall be continuing,
then (A) the Company shall not, and shall cause any subsidiary
of the Company that is not a wholly owned subsidiary of the
Company not to, declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock or the capital stock of any such subsidiary, and (B) the
Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company which
rank pari passu with or junior to the Notes, provided that the
foregoing restriction in clause (A) does not apply to any
stock dividends paid by the Company, or any of its
subsidiaries, where the dividend stock is the same as that on
which the dividend is being paid.
Section 7.2. Covenants as to the Trust.
For so long as such Trust Securities remain outstanding,
the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of the Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed
to the Company's ownership of the Common Securities, and (ii) use
its reasonable efforts to cause the Trust (A) to remain a statutory
business trust, except in connection with a distribution of Notes
as provided in the Declaration, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations
permitted by the Declaration, and (B) otherwise continue to be
treated as a grantor trust for United States federal income tax
purposes.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. Events of Default.
For the Notes only, a valid extension of the interest payment
period in accordance with Article IV hereof shall not constitute a
Default or Event of Default under Section 501(1) or (8) of the
Indenture.
For the Notes only, the voluntary or involuntary dissolution,
winding-up or termination of the Trust, except in connection with
the distribution of the Notes to the holders of the Trust
Securities in liquidation of the Trust, the redemption of all the
Trust Securities, or mergers, consolidations or amalgamations, each
as permitted by the Declaration, shall constitute an Event of
Default.
Section 8.2. Waiver of Past Defaults.
For the Notes only, any waiver pursuant to Section 513 of the
Indenture or any modification of such a waiver shall not be
effective until the holders of a majority in liquidation preference
of Trust Securities shall have consented to such waiver or
modification to such waiver; provided, however, that if the consent
of the Holder of each Outstanding Debt Security is required, such
waiver shall not be effective until each holder of the Trust
Securities shall have consented to such waiver.
ARTICLE IX
FORM OF NOTE
Section 9.1. Form of Note.
The Notes and the Trustee's Certificate of Authentication to
be endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF NOTE)
(IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is
a Global Note within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Note is exchangeable for Global
Notes registered in the name of a person other than the Depositary
or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer
of this Note as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in
limited circumstances. Every Note delivered upon registration of
transfer of, or in exchange for, or in lieu of, this Global Note
shall be a Global Note, subject to the foregoing, except in the
limited circumstances described above.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC") to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (or to such other
entity 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 ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.)
<PAGE>
No. __________________
$309,279,000
CUSIP No.__________________
8.206% SUBORDINATED DEFERRABLE INTEREST NOTE
DUE 2027
Great Western Financial Corporation, a Delaware corporation
(the "Company"), which term includes any successor corporation
under the Indenture hereinafter referred to), for value received,
hereby promises to pay to The First National Bank of Chicago, as
Property Trustee for Great Western Financial Trust II, or
registered assigns, the principal sum of Three Hundred Nine Million
Two Hundred Seventy Nine Thousand Dollars ($309,279,000) on
February 1, 2027. The Company further promises to pay interest on
said principal sum from January 27, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, semi-annually
(subject to deferral as set forth herein) in arrears on February 1
and August 1 of each year commencing August 1, 1997, at the rate of
8.206% per annum until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded semi-
annually. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-
day months. In the event that any date on which interest is
payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or
more Predecessor Notes, as defined in said Indenture) is registered
at the close of business on the regular record date for such
interest installment, which shall be the close of business on the
Business Day next preceding such Interest Payment Date. [IF
PURSUANT TO THE PROVISIONS OF THE INDENTURE THE NOTES ARE NO LONGER
REPRESENTED BY A GLOBAL NOTE -- which shall be the close of
business on the ____ Business Day next preceding such Interest
Payment Date.] Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to
the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special record
date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders
of this series of Notes not less than 10 days prior to such special
record date, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Note
shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed
to the registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the
Holder of this Note is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Note will
be made at such place and to such account as may be designated by
the Property Trustee.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness,
and this Note is issued subject to the provisions of the Indenture
with respect thereto. Each Holder of this Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives
all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse side hereof,
this Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated___________________
GREAT WESTERN FINANCIAL CORPORATION
By________________________________
Attest:
By__________________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK,
as Trustee
HARRIS TRUST AND SAVINGS BANK, _________________________
as Trustee or as Authentication Agent
By________________________ By_______________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in
the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of September 12, 1990,
as amended and supplemented by a First Supplemental Indenture dated
as of April 30, 1993, a Second Supplemental Indenture dated as of
December 6, 1995 and a Third Supplemental Indenture dated as of
January 22, 1997, duly executed and delivered between the Company
and Harris Trust and Savings Bank, as Trustee (the "Trustee") (the
Indenture as so supplemented, the "Indenture"), to which Indenture
and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series that may vary as to
amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Notes is limited in
aggregate principal amount as specified in said Third Supplemental
Indenture.
The Company shall have the right to redeem this Note at the
option of the Company, in whole or in part at any time on or after
February 1, 2007 (a "Optional Redemption") or at any time in
certain circumstances upon the occurrence of a Tax Event, or in
whole only within a limited time after the occurrence and
continuance of a Capital Treatment Event, in each case at the
redemption price specified in the Indenture plus any accrued but
unpaid interest, to the date of such redemption (the "Redemption
Price"). Any redemption pursuant to this paragraph will be made
upon not less than 30 nor more than 60 days' notice to the Holder
of the Notes at the Redemption Price. If the Notes are only
partially redeemed by the Company, the Notes will be redeemed pro
rata or by lot or by any other method utilized by the Trustee;
provided that if, at the time of redemption, the Notes are
registered as a Global Note, the Depositary shall determine by lot
the principal amount of such Notes held by each Holder of Notes to
be redeemed.
In the event of a redemption of this Note in part only, a new
Note for the unredeemed portion thereof will be issued in the name
of the Holder hereof upon cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Notes may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes of each series
affected at the time outstanding, as defined in the Indenture, to
execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes;
provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Notes of any series, or reduce the
principal amount thereof, or reduce the rate, or reduce any premium
payable upon the redemption thereof, without the consent of the
Holder of each Note so affected, or (ii) reduce the aforesaid
percentage of Notes, the Holders of which are required to consent
to any such supplemental indenture, without the consent of the
Holders of each Note then outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Notes of any series
at the time outstanding affected thereby, on behalf of all of the
Holders of the Notes of such series, to waive any past default in
the performance of any of the covenants contained in the Indenture,
or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the
Notes of such series. Any such consent or waiver by the registered
Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Note and of any Note issued in
exchange heretofore or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any notation
of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note 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 Note at the
time and place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term
of the Notes from time to time to extend the interest payment
period of such Notes to up to 10 consecutive semi-annual periods
(an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Notes
to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended
Interest Payment Period together with all such further extensions
thereof shall not exceed 10 consecutive semi-annual periods. At
the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the
registered Holder hereof on the Security Register of the Company,
upon surrender of this Note for registration of transfer at the
office or agency of the Company in the City and State of New York
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes of authorized
denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and any Security
Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made
by anyone other than the Security Registrar) for the purpose of
receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying
agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
The notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral
multiple thereof. This Global Note is exchangeable for Notes in
definitive form only under certain limited circumstances set forth
in the Indenture. Notes of this series so issued are issuable only
in registered form without coupons in denominations of $1,000 and
any integral multiple thereof as provided in the Indenture and
subject to certain limitations herein and therein set forth. Notes
of this series so issued are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ARTICLE X
ORIGINAL ISSUE OF NOTES
Section 10.1. Original Issue of Notes.
Notes in the aggregate principal amount of Three Hundred Nine
Million Two Hundred Seventy-Nine Thousand Dollars ($309,279,000)
may, upon execution of this Third Supplemental Indenture, be
executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and
deliver said Notes to or upon the written order of the Company,
signed by its Chairman of the Board, its President, or one of its
Vice Presidents and attested to by its Secretary or one of its
Assistant Secretaries, without any further action by the Company.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Ratification of Indenture.
The Indenture, as supplemented by this Third Supplemental
Indenture, is in all respects ratified and confirmed, and this
Third Supplemental Indenture shall be deemed part of the Indenture
in the manner and to the extent herein and therein provided.
Section 11.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this Third Supplemental Indenture.
Section 11.3. Governing Law.
This Third Supplemental Indenture and each Note shall be
deemed to be a contract made under the internal laws of the State
of New York, and for all purposes shall be construed in accordance
with the laws of said State.
Section 11.4. Separability.
In case any one or more of the provisions contained in this
Third Supplemental Indenture or in the Notes shall for any reason
be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provisions of this Third Supplemental Indenture or of the
Notes, but this Third Supplemental Indenture and the Notes shall be
construed as if such invalid or illegal or unenforceable provision
had never been contained herein or therein.
Section 11.5. Counterparts.
This Third Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
Section 11.6. Acknowledgement of Rights of Holders of Capital
Securities.
The Company acknowledges that the holders of the Capital
Securities are each entitled to enforce and exercise the rights and
remedies under the Indenture to the extent set forth in Section
5(b) of Exhibit A to the Declaration.
Section 11.7. Supplemental Indentures.
For the Notes only, any supplemental indenture referred to in
Section 902 of the Indenture shall not be effective until the
holders of a majority in liquidation preference of Trust Securities
shall have consented to such supplemental indenture; provided,
however, that if the consent of the Holder of each Outstanding Debt
Security is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities shall have
consented to such supplemental indenture.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, on the date or
dates indicated in the acknowledgements and as of the day and year
first above written.
GREAT WESTERN FINANCIAL CORPORATION
By: __________________________
Name:
Title:
Attest:
_______________________
Secretary
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By: __________________________
Name:
Title:
Attest:
_______________________
Assistant Secretary
AMENDED AND RESTATED DECLARATION OF TRUST
GREAT WESTERN FINANCIAL TRUST II
Dated as of January 22, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS. . . . . . . . 3
Section 1.1 Definitions. . . . . . . . . . . . . . . . 3
ARTICLE II
TRUST INDENTURE ACT . . . . . . . . . . 11
Section 2.1 Trust Indenture Act; Application . . . . . 11
Section 2.2 Lists of Holders of Trust Securities . . . 12
Section 2.3 Reports by the Property Trustee. . . . . . 12
Section 2.4 Periodic Reports to Property Trustee . . . 12
Section 2.5 Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . . . . . 13
Section 2.6 Events of Default; Waiver. . . . . . . . . 13
Section 2.7 Event of Default; Notice . . . . . . . . . 15
ARTICLE III
ORGANIZATION . . . . . . . . . . . . 15
Section 3.1 Name . . . . . . . . . . . . . . . . . . . 15
Section 3.2 Office . . . . . . . . . . . . . . . . . . 16
Section 3.3 Purpose. . . . . . . . . . . . . . . . . . 16
Section 3.4 Authority. . . . . . . . . . . . . . . . . 16
Section 3.5 Title to Property of the Trust . . . . . . 16
Section 3.6 Powers and Duties of the Regular
Trustees . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.7 Prohibition of Actions by the Trust and
the
Trustees. . . . . . . . . . . . . . . . . . . . 19
Section 3.8 Powers and Duties of the Property
Trustee. . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.9 Certain Duties and Responsibilities of
the Property Trustee . . . . . . . . . . . 22
Section 3.10 Certain Rights of Property Trustee . . . . 25
Section 3.11 Delaware Trustee . . . . . . . . . . . . . 27
Section 3.12 Execution of Documents . . . . . . . . . . 27
Section 3.13 Not Responsible for Recitals or Issuance
of Trust
Securities. . . . . . . . . . . . . . . . . . . 28
Section 3.14 Duration of Trust. . . . . . . . . . . . . 28
Section 3.15 Mergers. . . . . . . . . . . . . . . . . . 28
ARTICLE IV
SPONSOR . . . . . . . . . . . . . 30
Section 4.1 Sponsor's Purchase of Common Securities . . . . 30
Section 4.2 Responsibilities of the Sponsor. . . . . . 30
ARTICLE V
TRUSTEES . . . . . . . . . . . . . 30
Section 5.1 Number of Trustees . . . . . . . . . . . . 30
Section 5.2 Delaware Trustee . . . . . . . . . . . . . 31
Section 5.3 Property Trustee; Eligibility. . . . . . . 31
Section 5.4 Qualifications of Regular Trustees and
Delaware
Trustee Generally . . . . . . . . . . . . . . . 32
Section 5.5 Initial Trustees . . . . . . . . . . . . . 32
Section 5.6 Appointment, Removal and Resignation of
Trustees . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.7 Vacancies Among Trustees . . . . . . . . . 34
Section 5.8 Effect of Vacancies. . . . . . . . . . . . 35
Section 5.9 Meetings . . . . . . . . . . . . . . . . . 35
Section 5.10 Delegation of Power. . . . . . . . . . . . 35
Section 5.11 Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 36
ARTICLE VI
DISTRIBUTIONS. . . . . . . . . . . . 36
Section 6.1 Distributions. . . . . . . . . . . . . . . 36
ARTICLE VII
ISSUANCE OF TRUST SECURITIES . . . . . . . . 37
Section 7.1 General Provisions Regarding Trust
Securities . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
TERMINATION . . . . . . . . . . . . 38
Section 8.1 Termination of Trust . . . . . . . . . . . 38
ARTICLE IX
TRANSFER OF INTEREST . . . . . . . . . . 39
Section 9.1 Transfer of Trust Securities . . . . . . . 39
Section 9.2 Transfer of Certificates . . . . . . . . . 39
Section 9.3 Deemed Trust Security Holders. . . . . . . 40
Section 9.4 Book Entry Interests . . . . . . . . . . . 40
Section 9.5 Notices to Depositary. . . . . . . . . . . 41
Section 9.6 Appointment of Successor Depositary. . . . 41
Section 9.7 Definitive Capital Security
Certificates . . . . . . . . . . . . . . . . . . . . 42
Section 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF TRUST SECURITIES, TRUSTEES OR OTHERS . . . . . 43
Section 10.1 Liability. . . . . . . . . . . . . . . . . 43
Section 10.2 Exculpation. . . . . . . . . . . . . . . . 43
Section 10.3 Fiduciary Duty . . . . . . . . . . . . . . 44
Section 10.4 Indemnification. . . . . . . . . . . . . . 45
Section 10.5 Outside Businesses . . . . . . . . . . . . 46
ARTICLE XI
ACCOUNTING. . . . . . . . . . . . . 46
Section 11.1 Fiscal Year. . . . . . . . . . . . . . . . 46
Section 11.2 Certain Accounting Matters . . . . . . . . 47
Section 11.3 Banking. . . . . . . . . . . . . . . . . . 47
Section 11.4 Withholding. . . . . . . . . . . . . . . . 48
ARTICLE XII
AMENDMENTS AND MEETINGS . . . . . . . . . 48
Section 12.1 Amendments . . . . . . . . . . . . . . . . 48
Section 12.2 Meetings of the Holders of Trust
Securities; Action by Written Consent. . . 50
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE. . . 52
Section 13.1 Representations and Warranties of
Property Trustee . . . . . . . . . . . . . 52
Section 13.2 Representations and Warranties of
Delaware Trustee . . . . . . . . . . . . . 53
ARTICLE XIV
MISCELLANEOUS. . . . . . . . . . . . 54
Section 14.1 Notices. . . . . . . . . . . . . . . . . . 54
Section 14.2 Governing Law. . . . . . . . . . . . . . . 55
Section 14.3 Intention of the Parties . . . . . . . . . 55
Section 14.4 Headings . . . . . . . . . . . . . . . . . 55
Section 14.5 Successors and Assigns . . . . . . . . . . 55
Section 14.6 Partial Enforceability . . . . . . . . . . 55
Section 14.7 Counterparts . . . . . . . . . . . . . . . 55
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
ANNEX I. . . . . . . . . . . . . . . . . . . . . . . . . . . .I-1
ANNEX II . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 22, 1997, by the undersigned
trustees (together with all other Persons from time to time duly
appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), Great Western
Financial Corporation, a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the Holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant
to this Declaration;
WHEREAS, the Trustees and the Sponsor established Great
Western Financial Trust II (the "Trust"), a trust under the
Delaware Business Trust Act pursuant to a Declaration of Trust
dated as of January 6, 1997, (the "Original Declaration") and
a Certificate of Trust filed with the Secretary of State of
Delaware on January 10, 1997, for the sole purpose of issuing and
selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds
thereof in certain Notes of the Note Issuer (as hereinafter
defined);
WHEREAS, as of the date hereof, no interests in the Trust
have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision
of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business
Trust Act and that this Declaration, including Exhibit A hereto
which is expressly made a part hereof, constitute the governing
instrument of such business trust, the Trustees declare that all
assets contributed to the Trust will be held in trust for the
benefit of the Holders, from time to time, of the securities
representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this
Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of
and Exhibits to this Declaration unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise
defined in this Declaration or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Additional Interest" has the meaning given such term in the
Third Supplemental Indenture dated as of January 22, 1997 to the
Indenture.
"Adjusted Treasury Rate" means, with respect to any
redemption date, the Treasury Rate plus (a) 1.10% if such
redemption date occurs on or before February 1, 1998, or (b) .50%
if such redemption date occurs after February 1, 1998.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Depositary as
described in Section 9.4.
"Business Day" means any day other than a day on which
banking institutions in New York, New York or Los Angeles,
California are authorized or required by any applicable law to
close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be
amended from time to time.
"Calculation Date" means the third Business Day preceding
any redemption date.
"Capital Securities Guarantee" means the guarantee agreement
to be dated as of January 22, 1997, of the Sponsor in respect of
the Capital Securities.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such
Book Entry Interest, as reflected on the books of the Depositary,
or on the books of a Person maintaining an account with such
Depositary (directly as a Depositary Participant or as an
indirect participant, in each case in accordance with the rules
of such Depositary).
"Capital Security Certificate" means a certificate
representing a Capital Security substantially in the form of
Annex I to Exhibit A.
"Certificate" means a Common Security Certificate or a
Capital Security Certificate.
"Closing Date" means January 27, 1997.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act
or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing
such duties at such time.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement
dated as of January 22, 1997, of the Sponsor in respect of the
Common Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security
substantially in the form of Annex II to Exhibit A.
"Comparable Treasury Issue" means, with respect to any
redemption date, the United States Treasury security selected by
the Quotation Agent as having a maturity comparable to the
Remaining Life that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to
the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to
three months after February 1, 2007, the two most closely
corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding
to the nearest month using such securities.
"Comparable Treasury Price" means, with respect to any
redemption date (a) the average of five Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (b) if
the Note Trustee obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Compound Interest" has the meaning given such term in the
Third Supplemental Indenture dated as of January 22, 1997 to the
Indenture.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent
of (i) the Trust or (ii) the Trust's Affiliates; and (b) any
Holder of Trust Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Capital Security Certificates" has the meaning
set forth in Section 9.4.
"Depositary" means an organization registered as a clearing
agency pursuant to Section 17A of the Exchange Act that is acting
as depositary for the Capital Securities and in whose name or in
the name of a nominee of that organization shall be registered a
Global Certificate and which shall undertake to effect book entry
transfers and pledges of the Capital Securities.
"Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time
the Depositary effects book entry transfers and pledges of
securities deposited with the Depositary.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of
Trust Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Event of Default" in respect of the Trust Securities means
an Event of Default (as defined in the Indenture) has occurred
and is continuing in respect of the Notes.
"Guarantees" means, collectively, the Common Securities
Guarantee and the Capital Securities Guarantee.
"Holder" means a Person in whose name a Certificate
representing a Trust Security is registered on the books and
records of the Trust, such Person being a beneficial owner within
the meaning of the Business Trust Act, provided, that, in
determining whether the holders of the requisite percentage of
Capital Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Sponsor, as
guarantor of the Trust Securities, or any Affiliate of the
Sponsor.
"Indemnified Person" means (a) any Trustee; (b) any
Affiliate of any Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or
agents of any Trustee; or (d) any employee or agent of the Trust
or its Affiliates.
"Indenture" means the Indenture dated as of September 12,
1990 between the Note Issuer and the Note Trustee as amended and
supplemented by a First Supplemental Indenture, dated as of
April 30, 1993, the Second Supplemental Indenture, dated as of
December 6, 1995, and the Third Supplemental Indenture, dated as
of January 22, 1997.
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
Exhibit A.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Trust Securities"
means, except as provided in the terms of the Capital Securities
and the Trust Indenture Act, Holder(s) of outstanding Trust
Securities voting together as a single class or, as the context
may require, Holders of outstanding Capital Securities or
Holder(s) of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Trust
Securities of the relevant class.
"Make-Whole Amount" means, with respect to any Note, an
amount equal to the greater of (a) 100% of the principal amount
of the Note or (b) as determined by the Quotation Agent, the sum
of the present values of the principal amount and premium payable
as part of the Redemption Price with respect to an optional
redemption of such Note on February 1, 2007, together with the
present values of the scheduled payments of interest for the
Remaining Life, in each case discounted to the redemption date on
a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate.
"Ministerial Action" has the meaning set forth in Exhibit A.
"Note Issuer" means the Sponsor in its capacity as issuer
of the Notes.
"Note Trustee" means Harris Trust and Savings Bank, as
trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Notes" means the series of debt securities of the Note
Issuer under the Indenture to be held by the Property Trustee for
the benefit of the Holders.
"Officers' Certificate" means, with respect to any Person,
a certificate signed by two Authorized Officers of such Person.
Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Declaration
shall include:
(a) a statement that each officer signing the Certificate
has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer
in rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Primary Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them, and if there
is only one Regular Trustee, such Regular Trustee.
"Quotation Agent" means Goldman, Sachs & Co. and its
successors; provided, however, that if the foregoing shall cease
to be a Primary Treasury Dealer, the Sponsor shall substitute
therefor another Primary Treasury Dealer.
"Redemption Price" means, in the case of any redemption
permitted hereunder on or after February 1, 2007, a price equal
to the following prices, expressed in percentages of the
liquidation amount, plus any accrued and unpaid interest,
including any Compound Interest and Additional Interest, to the
date fixed for redemption. If redeemed during the 12-month
period beginning February 1:
Year Redemption Price
---- ----------------
2007 104.1030%
2008 103.6927%
2009 103.2824%
2010 102.8721%
2011 102.4618%
2012 102.0515%
2013 101.6412%
2014 101.2309%
2015 100.8206%
2016 100.4103%
and at 100% on or after February 1, 2017. Redemption Price means
in the case of a redemption permitted hereunder prior to February
1, 2007, a price equal to the Make-Whole Amount, plus any accrued
interest, including any Compound Interest and Additional
Interest, to the date fixed for redemption.
"Reference Treasurer Dealer" means (a) the Quotation Agent
and (b) any other Primary Treasury Dealer selected by the Note
Trustee after consultation with the Sponsor.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Note Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the
Note Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the Calculation Date.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any
other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
"Remaining Life" means the period from the redemption date
to February 1, 2007.
"Responsible Officer" means, with respect to the Property
Trustee, any vice-president, any assistant vice-president, the
secretary, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any
other officer in the Corporate Trust Services Division of the
Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular
subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"66-2/3% in liquidation amount of the Trust Securities"
means, except as provided in the terms of the Capital Securities
and by the Trust Indenture Act, Holders of outstanding Trust
Securities voting together as a single class or, as the context
may require, Holders of outstanding Capital Securities or
Holder(s) of outstanding Common Securities voting separately as a
class, representing at least 66-2/3% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid
Distributions, to the date upon which the voting percentages are
determined) of all outstanding Trust Securities of the relevant
class.
"Special Event" has the meaning set forth in Exhibit A.
"Sponsor" means Great Western Financial Corporation, a
Delaware corporation, or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the
Trust.
"Super-Majority" has the meaning set forth in Exhibit A.
"Tax Event" has the meaning set forth in Exhibit A.
"10% in liquidation amount of the Trust Securities" means,
except as provided in the terms of the Trust Securities or by the
Trust Indenture Act, Holders of outstanding Trust Securities
voting together as a single class or, as the context may require,
Holders of outstanding Capital Securities or Holder(s) of
outstanding Common Securities, voting separately as a class,
representing at least 10% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of
all outstanding Trust Securities of the relevant class.
"Treasury Rate" means, with respect to any redemption date,
(a) the yield, under the heading which represents the average for
the week immediately prior to the Calculation Date, appearing in
the most recently published statistical release designated
"H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity
corresponding to the Remaining Life (if no maturity is within
three months before or after the Remaining Life, yields for the
two published maturities most closely corresponding to the
Remaining Life shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line
basis, rounding to the nearest month) or (b) if such release (or
any successor release) is not published during the week preceding
the Calculation Date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity
of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price on the
Calculation Date for such redemption date.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under
the Code by the United States Treasury, as such regulations may
be amended from time to time (including corresponding provisions
of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such person shall
continue in office in accordance with the terms hereof, and all
other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in effect at the date as of which this instrument
was executed, provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Securities" means collectively the Common Securities
and the Capital Securities.
"Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of
this Declaration and shall, to the extent applicable,
be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of
the Trust Indenture Act, such duties imposed by the
Trust Indenture Act shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust
Securities as equity securities representing undivided
beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Trust Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf
of the Trust shall provide the Property Trustee
(i) within 14 days after each record date for payment
of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and
addresses of the Holders of the Trust Securities ("List
of Holders") as of such record date, provided that none
of the Sponsor or the Regular Trustees on behalf of the
Trust shall be obligated to provide such list of
Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably
practicable, all information contained in Lists of
Holders given to it or which it receives in the
capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new
List of Holders.
(b) The Property Trustee shall comply with the obligations
of an indenture trustee under Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property
Trustee shall provide to the Holders of the Capital Securities
such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such documents,
reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of
compliance with any conditions precedent, if any, provided for in
this Declaration that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Capital Securities may, by vote, on behalf of the
Holders of all of the Capital Securities, waive any
past Event of Default in respect of the Capital
Securities and its consequences, provided that, if
the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of all or a Super-
Majority of the holders of the Notes to be waived
under the Indenture, the Event of Default under
the Declaration may only be waived by the vote of
all of the Holders of the Capital Securities or
such proportion thereof in liquidation amount as
represents the relevant Super-Majority of the
aggregate principal amount of the Notes
outstanding, as applicable.
Upon such waiver, any such default shall cease to
exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration,
but no such waiver shall extend to any subsequent or
other default or an Event of Default with respect to
the Capital Securities or impair any right consequent
thereon. Any waiver by the Holders of the Capital
Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a
waiver by the Holder(s) of the Common Securities of any
such Event of Default with respect to the Common
Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holder(s) of
the Common Securities.
(b) The Holder(s) of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the
Holder(s) of all of the Common Securities, waive any
past Event of Default with respect to the Common
Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) which is not waivable under the Indenture, except
where the Holder(s) of the Common Securities are
deemed to have waived such Event of Default under
the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration
shall also not be waivable; or
(ii) which requires the consent or vote of a Super-
Majority to be waived, except where the Holder(s)
of the Common Securities are deemed to have waived
such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event
of Default under the Declaration may only be
waived by the vote of the Holders of at least the
proportion in liquidation amount of the Capital
Securities as represents the relevant Super-
Majority of the aggregate principal amount of
the Notes outstanding;
provided that, each Holder of Common Securities will be
deemed to have waived any such Event of Default and all
Events of Default with respect to the Common Securities
and its consequences until all Events of Default with
respect to the Capital Securities have been cured,
waived or otherwise eliminated, and until such Events
of Default have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Capital
Securities and only the Holders of the Capital
Securities will have the right to direct the Property
Trustee in accordance with the terms of the Trust
Securities. Subject to the foregoing provisions of
this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of
this Declaration but no such waiver shall extend to any
subsequent or other default or Event of Default with
respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of
the Capital Securities, constitutes a waiver of the
corresponding Event of Default under this Declaration.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of a default known to the Property Trustee,
transmit by mail, first class postage prepaid, to the
Holders of the Trust Securities, notices of such
defaults with respect to the Trust Securities,
identifying such default as a Declaration Event of
Default, unless such defaults have been cured before
the giving of such notice (the term "default" for the
purposes of this Section 2.7(a) being hereby defined to
be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided
therein); provided that, except for a default in the
payment of principal of (or premium, if any) or
interest on any of the Notes or in the payment of any
sinking fund installment established for the Notes, the
Property 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 Property Trustee in
good faith determines that the withholding of such
notice is in the interests of the Holders of the Trust
Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall
have received written notice or a Responsible
Officer charged with the administration of the
Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "Great Western Financial Trust II", as
such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Trust
Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o
Great Western Financial Corporation, 9200 Oakdale Avenue,
Chatsworth, California 91311. On ten Business Days written
notice to the Holders of Trust Securities, the Regular Trustees
may designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such
sale to acquire the Notes and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or
incident thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration
and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry
out the purposes of the Trust. An action taken by the Regular
Trustees in accordance with their powers shall constitute the
act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set
forth in this Declaration.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes
and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following
activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more
than one series of Capital Securities and no more than
one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other
than the Trust Securities, and the issuance of Trust
Securities shall be limited to a one-time, simultaneous
issuance of both Capital Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the
Registration Statement on Form S-3 prepared by the
Sponsor, including any amendments thereto,
pertaining to the Capital Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the
Sponsor to be necessary in order to qualify or
register all or part of the Capital Securities in
any State in which the Sponsor has determined to
qualify or register such Capital Securities for
sale; and
(iii) execute and enter into the Underwriting Agreement
providing for the sale of the Capital Securities;
(c) to acquire the Notes with the proceeds of the sale of
the Capital Securities and the Common Securities;
provided, however, that the Regular Trustee shall cause
legal title to the Notes to be held of record in the
name of the Property Trustee for the benefit of the
Holders of the Capital Securities and the Holder(s) of
Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
provided that the Regular Trustees shall consult with
the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in
relation to a Special Event;
(e) to establish a record date with respect to all actions
to be taken hereunder that require a record date be
established, including and with respect to, for the
purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders
of Capital; Securities and Holder(s) of Common
Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms
of the Trust Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal
Action"), unless pursuant to Section 3.8(e), the
Property Trustee has the power to bring such Legal
Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and
managers, contractors, advisors, and consultants and
pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4)
of the Trust Indenture Act to the Property Trustee,
which certificate may be executed by a Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Trust Securities;
(m) to give prompt written notice to the Holders of the
Trust Securities of any notice received from the Note
Issuer of its election to defer payments of interest on
the Notes by extending the interest payment period
under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf
of the Trust in all matters necessary or incidental to
the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the
Trust's valid existence, rights, franchises and
privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction
in which such existence is necessary to protect the
limited liability of the Holders of the Trust
Securities or to enable the Trust to effect the
purposes for which the Trust was created;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular
Trustees determine in their discretion to be necessary
or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor
trust; and
(iii)cooperating with the Note Issuer to ensure that
the Notes will be treated as indebtedness of the
Note Issuer for United States federal income tax
purposes,
provided that such action does not adversely affect the
interests of Holders of the Capital Securities; and
(q) to take all action necessary to cause all applicable
tax returns and tax information reports that are
required to be filed with respect to the Trust to be
duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and the
Regular Trustees shall not take, or cause or permit the Trust to
take, any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3. Any expenses
incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Note Issuer.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set
forth in Section 3.8.
Section 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to, engage
in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall
cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such
proceeds to Holders of Trust Securities pursuant
to the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii)possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other
than loans represented by the Notes;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the
Trust Securities in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest
in, the Trust other than the Trust Securities; or
(vii)other than as provided in this Declaration
(including Exhibit A hereto), (A) direct the time,
method and place of exercising any trust or power
conferred upon the Note Trustee with respect to
the Notes, (B) waive any past default that is
waivable under Section 513 of the Indenture,
(C) exercise any right to rescind or annul any
declaration that the principal of all the Notes
shall be due and payable or (D) consent to any
amendment, modification or termination of the
Indenture or the Notes where such consent shall be
required unless the Trust shall have received an
opinion of independent counsel experienced in such
matters to the effect that such action will not
cause more than an insubstantial risk that for
United States federal income tax purposes the
Trust will not be classified as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held
of record in the name of the Property Trustee in trust
for the benefit of the Trust and the Holders of the
Trust Securities. The right, title and interest of the
Property Trustee to the Notes shall vest automatically
in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.6. Such
vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to
the Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right,
title and interest in the Notes to the Regular Trustees
or to the Delaware Trustee (if the Property Trustee
does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the
Holders of the Trust Securities and, upon the
receipt of payments of funds made in respect of
the Notes held by the Property Trustee, deposit
such funds into the Property Trustee Account and
make payments to the Holders of the Capital
Securities and Holder(s) of the Common Securities
from the Property Trustee Account in accordance
with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed
in accordance with this Declaration. The Property
Trustee Account shall be an account that is
maintained with a banking institution the rating
on whose long term unsecured indebtedness is at
least equal to the then outstanding rating
assigned to the Capital Securities by a
"nationally recognized statistical rating
organization", as that term is defined for
purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption
of the Capital Securities and the Common
Securities to the extent the Notes are redeemed
or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of
the Trust Securities, engage in such ministerial
activities as shall be necessary or appropriate to
effect the distribution of the Notes to Holders of
Trust Securities in accordance with such Holders'
interests therein upon the occurrence of certain
Special Events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Trust
Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default
or the Property Trustee's duties and obligations under
this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall continue to serve as a
Trustee until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders of Trust Securities pursuant to the terms
of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed
and has accepted that appointment in accordance
with Section 5.6.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a
holder of Notes under the Indenture and, if an Event of
Default occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Trust
Securities, enforce its rights as holder of the Notes
subject to the rights of the Holders pursuant to the
terms of such Trust Securities.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf
of the Trust with respect to all Trust Securities and
any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may
be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the
authority of the Regular Trustees set forth in Section
3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and the
Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in Sections
3.3 and 3.7.
Section 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth
in this Declaration and no implied covenants shall be
read into this Declaration against the Property
Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their
exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her
own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own
negligent action, its own negligent failure to act, or
its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Declaration and
the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in
this Declaration, and no implied covenants
or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of
the statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Property Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Property
Trustee, the Property Trustee shall be under
a duty to examine the same to determine
whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a
Responsible Officer of the Property Trustee,
unless it shall be proved that the Property
Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be
taken by it in good faith in accordance with
the direction of the Holders of not less than
a Majority in liquidation amount of the Trust
Securities at the time outstanding relating to
the time, method and place of conducting any
proceeding for any remedy available to the
Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds
or otherwise incur personal financial liability in
the performance of any of its duties or in the
exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that
the repayment of such funds or liability is not
reasonably assured to it under the terms of this
Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect
to the custody, safekeeping and physical
preservation of the Notes and the Property Trustee
Account shall be to deal with such property in a
similar manner as the Property Trustee deals with
similar property for its own account, subject to
the protections and limitations on liability
afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value,
genuineness, existence or sufficiency of the Notes
or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it
may otherwise agree with the Sponsor. Money held
by the Property Trustee need not be segregated
from other funds held by it except in relation to
the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and
except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees
or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee
be liable for the default or misconduct of the
Regular Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon
any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party
or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an
Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it
desirable that a matter be proved or established
before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may,
in the absence of bad faith on its part request
and rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of
any instrument (including any financing or
continuation statement or any filing under tax
or securities laws) (or any rerecording, refiling
or registration thereof);
(v) the Property Trustee may consult with counsel or
other experts and the advice or opinion of such
counsel and experts with respect to legal matters
or advice within the scope of such experts' area
of expertise shall be full and complete
authorization and protection in respect of any
action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice
or opinion. Except as otherwise specified herein,
such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its
employees. The Property Trustee shall have the
right at any time to seek instructions concerning
the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in
it by this Declaration at the request or direction
of any Holder, unless such Holder shall have
provided to the Property Trustee adequate security
and indemnity, which would satisfy a reasonable
person in the position of the Property Trustee,
against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as
may be requested by the Property Trustee provided,
that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated
in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document, but the Property Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may
see fit;
(viii) the Property Trustee may execute any of the trusts
or powers hereunder or perform any duties
hereunder either directly or by or through agents
or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on
the part of any agent or attorney appointed with
due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the
Holders of the Trust Securities, and the signature
of the Property Trustee or its agents alone shall
be sufficient and effective to perform any such
action and no third party shall be required to
inquire as to the authority of the Property
Trustee to so act or as to its compliance with any
of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by
the Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any
remedy or right or taking any other action
hereunder the Property Trustee (i) may request
instructions from the Holders of the Trust
Securities which instructions may only be given by
the Holders of the same proportion in liquidation
amount of the Trust Securities as would be
entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such
other action until such instructions are received,
and (iii) shall be protected in acting in
accordance with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee
to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power
or, authority available to the Property Trustee shall
be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration
other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Regular
Trustees, the Property Trustee or the Trustees generally, except
as may be required under the Business Trust Act described in this
Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust
Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any
Regular Trustee is authorized to execute on behalf of the Trust
any documents which the Regular Trustees have the power and
authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be executed by a majority
of the Regular Trustees. A Regular Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purposes of signing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to
Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Trust
Securities.
The recitals contained in this Declaration and the Trust
Securities shall be taken as the statements of the Sponsor, and
the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the
value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the validity
or sufficiency of this Declaration or the Trust Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from the
Closing Date.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with
or into, or be replaced by, or convey, transfer or
lease its properties and assets substantially as an
entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Regular Trustees or, if there are only two, both of the
Regular Trustees, and if there is only one, such
Regular Trustee, and without the consent of the Holders
of the Trust Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with
or into, or be replaced by a trust organized as such
under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Trust Securities; or
(B) substitutes for the Trust Securities other
securities having substantially the same
terms as the Trust Securities (the "Successor
Securities") so long as the Successor
Securities rank the same as the Capital
Securities rank with respect to Distributions
and payments upon liquidation, redemption and
maturity;
(ii) the Note Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same
powers and duties as the Property Trustee as the
holder of the Notes;
(iii) such merger, consolidation, amalgamation or
replacement does not cause the Capital Securities
(including any Successor Securities) to be
downgraded by any nationally recognized
statistical rating organization;
(iv) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of
the Trust Securities (including any Successor
Securities) in any material respect (other than
with respect to any dilution of the Holders'
interest in the new entity);
(v) such successor entity has a purpose identical to
that of the Trust;
(vi) prior to such merger, consolidation, amalgamation
or replacement, the Sponsor has received an
opinion of independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the
rights, preferences and privileges of the
Holders of the Trust Securities (including
any Successor Securities) in any material
respect (other than with respect to any
dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the
Trust nor the Successor Entity will be
required to register as an Investment
Company; and
(vii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities
at least to the extent provided by the Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in
liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity
to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger
or replacement would cause the Trust or the Successor
Entity for United States federal income tax purposes
not to be classified as a grantor trust.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, in an amount at least equal to 3%
of the capital of the Trust, at the same time as the Capital
Securities are sold.
Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission
a Registration Statement on Form S-3 in relation to the
Capital Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of
the Capital Securities and to do any and all such acts,
other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Capital Securities.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees.
The number of Trustees shall initially be five (5), and:
(a) at any time before the issuance of any Trust
Securities, the Sponsor may, by written instrument,
increase or decrease the number of Trustees; and
(b) after the issuance of any Trust Securities the number
of Trustees may be increased or decreased by vote of
the Holder(s) of a Majority in liquidation amount of
the Common Securities voting as a class at a meeting of
the Holder(s) of the Common Securities; provided,
however, that the number of Trustees shall in no event
be less than three (3); provided further that (i) one
Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has
its principal place of business in the State of
Delaware (the "Delaware Trustee"); (ii) there shall be
at least one Trustee who is an employee or officer of,
or is affiliated with, the Sponsor (a "Regular
Trustee") and all Trustees other than the Delaware
Trustee and the Property Trustee shall be Regular
Trustees; and (iii) one Trustee shall be the Property
Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act,
and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee
shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware,
and otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no
application.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act
as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business
under the laws of the United States of America or
any State or Territory thereof or of the District
of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional
trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust
powers, having a combined capital and surplus of
at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by
Federal, state, Territorial or District of
Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant
to law or to the requirements of the supervising
or examining authority referred to above, then for
the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation
shall be deemed to be its combined capital and
surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property
Trustee shall immediately resign in the manner and with
the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Property Trustee
and the Holder of the Common Securities (as if it were
the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes
of clause (i) of the first provision contained in
Section 310(b) of the Trust Indenture Act.
Section 5.4 Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity
that shall act through one or more Authorized Officers.
Section 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Carl F. Geuther
J. Lance Erikson
Bruce F. Antenberg
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Section 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed
or removed without cause at any time:
(i) until the issuance of any Trust Securities, by
written instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities by vote
of the Holder(s) of a Majority in liquidation
amount of the Common Securities voting as a class
at a meeting of the Holder(s) of the Common
Securities; and
(b) (i) The Trustee that acts as Property Trustee shall
not be removed in accordance with Section 5.6(a)
until a successor Property Trustee possessing the
qualifications to act as Property Trustee under
Section 5.3 (the "Successor Property Trustee") has
been appointed and has accepted such appointment
by written instrument executed by such Successor
Property Trustee and delivered to the Regular
Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with this
Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has
accepted such appointment by written instrument
executed by such Successor Delaware Trustee and
delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his
death, removal or resignation. Any Trustee may resign
from office (without need for prior or subsequent
accounting) by any instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery
or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment
by instrument executed by such Successor
Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the Holders of the
Trust Securities; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a
Successor Delaware Trustee has been appointed and
has accepted such appointment by instrument
executed by such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holder(s) of the Common Securities shall use their
best efforts to promptly appoint a Successor Delaware
Trustee or Successor Property Trustee, as the case may
be, if the Delaware Trustee or the Property Trustee
delivers an instrument of resignation in accordance
with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted
appointment as provided in this Section 5.6 within 60
days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Property
Trustee or Delaware Trustee, as applicable, may
petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
Section 5.7 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if
the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance
with Section 5.6.
Section 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform
the duties of a Trustee shall not operate to annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur,
until such vacancy is filled by the appointment of a Regular
Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the
duties imposed upon the Regular Trustees by this Declaration.
Section 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of
any Regular Trustee. Regular meetings of the Regular Trustees
may be held at a time and place fixed by resolution of the
Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier)
not less than 24 hours before a meeting. Notices shall contain a
brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of
a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction
of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular
Trustees.
Section 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for
the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or
amendment thereto filled with the Commission, or making
any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of
the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or the
names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth
herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Property Trustee or the
Delaware Trustee, as the case may be, may be merged or converted
or with which either may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which
the Property Trustee or the Delaware Trustee, as the case may be,
shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Property
Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the
case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance
with the applicable terms of the relevant Holder's Trust
Securities. Distributions shall be made on the Capital
Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to
the extent that the Note Issuer makes a payment of interest
(including Deferred Interest (as defined in the Indenture)),
premium and/or principal on the Notes held by the Property
Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount on the next
succeeding Distribution Date (as defined in Exhibit A) to Holders
of record in accordance with the respective terms of the Trust
Securities.
<PAGE>
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
Section 7.1 General Provisions Regarding Trust Securities.
(a) The Regular Trustees shall on behalf of the Trust
issue one class of capital securities representing
undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit A
(the "Capital Securities") and one class of common
securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set
forth in Exhibit A (the "Common Securities"). The
Trust shall issue no securities or other interests in
the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust
by the Regular Trustees (or if there are more than two
Regular Trustees by any two of the Regular Trustees, or
if there is only one Regular Trustee, by such Regular
Trustee). Such signatures may be the manual or
facsimile signatures of the present or any future
Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such
signature shall not affect the validity of any
Certificate. In case any Regular Trustee of the Trust
who shall have signed any of the Trust Securities shall
cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust,
such Certificates nevertheless may be delivered as
though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate
may be signed on behalf of the Trust by such persons
who, at the actual date of execution of such Trust
Security, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of
the Declaration any such person was not such a Regular
Trustee. Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such
letters, numbers or other marks or identification or
designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be
required to comply with any law or to conform to usage.
(c) The consideration received by the Trust for the
issuance of the Trust Securities shall constitute a
contribution to the capital of the Trust and shall not
constitute a loan to the Trust.
(d) Upon issuance of the Trust Securities as provided in
this Declaration, the Trust Securities so issued shall
be deemed to be validly issued, fully paid and non-
assessable.
(e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with
the terms of this Declaration, shall be deemed to have
expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
ARTICLE VIII
TERMINATION
Section 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Holder of the
Common Securities or the Sponsor; the filing of a
certificate of cancellation with respect to the
Trust or the revocation of the Holder of the
Common Securities or the Sponsor's charter and the
expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution
of the Holder of the Common Securities, the
Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been
called for redemption and the amounts necessary
for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been
dissolved in accordance with the terms of the
Trust Securities and all of the Notes shall have
been distributed to the Holders of Trust
Securities in exchange for all of the Trust
Securities;
(vi) before the issuance of any Trust Securities, with
the consent of all of the Regular Trustees and the
Sponsor;
(vii) upon the written request of the Sponsor at any
time; or
(viii) March 31, 2052.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a), the Trustees shall
file a certificate of cancellation with the Secretary
of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTEREST
Section 9.1 Transfer of Trust Securities.
(a) Trust Securities may only be transferred, in whole or
in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the
Trust Securities. Any transfer or purported transfer
of any Trust Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related
Party may only transfer Common Securities to the
Sponsor or a Related Party of the Sponsor; provided
that, any such transfer is subject to the conditions
precedent that the transferor obtain the written
opinion of independent counsel experienced in such
matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor
trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Section 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be
effected without charge but only upon payment (with such
indemnity as the Regular Trustees may require) in respect of any
tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular
Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be cancelled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon
the receipt by such transferee of a Certificate. By acceptance
of a Certificate, each transferee shall be deemed to have agreed
to be bound by this Declaration and the documents incorporated by
reference herein.
Section 9.3 Deemed Trust Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the
Trust as the sole Holder of such Certificate and of the Trust
Securities represented by such Certificate for purposes of
receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such Certificate or in the Trust
Securities represented by such Certificate on the part of any
Person, whether or not the Trust shall have actual or other
notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Capital
Securities, the Capital Securities Certificates, on original
issuance, will be issued in the form of one or more, fully regis-
tered, global Capital Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Depositary,
by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in
the name of Cede & Co., the nominee of DTC, and no Capital
Security Beneficial Owner will receive a definitive Capital
Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificates, except
as provided in Section 9.7. Unless and until definitive, fully
registered Capital Security Certificates (the "Definitive Capital
Security Certificates") have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full
force and effect;
(b) the Trust and the Trustees shall be entitled to deal
with the Depositary for all purposes of this
Declaration (including the payment of Distributions on
the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of the Capital
Securities and the sole Holder of the Global Certifi-
cates and shall have no obligation to the Capital
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of the Declaration,
the provisions of this Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners
shall be exercised only through the Depositary and
shall be limited to those established by law and agree-
ments between such Capital Security Beneficial Owners
and the Depositary and/or the Depositary Participants
and receive and transmit payments of Distributions on
the Global Certificates to such Depositary Participants
provided, that solely for the purposes of determining
whether the Holders of the requisite amount of Trust
Securities have voted on any matter provided for in
this Declaration, so long as Definitive Capital
Security Certificates have not been issued, the
Trustees may conclusively rely on, and shall be
protected in relying on, any written instrument
(including a proxy) delivered to the Trustee by the
Depository setting forth the Capital Security
Beneficial Owners' votes or assigning the right to vote
on any matter to any other Persons either in whole or
in part. DTC will make book entry transfers among the
Depositary Participants.
Section 9.5 Notices to Depositary.
Whenever a notice or other communication to the Capital
Security Holder is required under this Declaration, unless and
until Definitive Capital Security Certificates shall have been
issued to the Capital Security Beneficial Owners pursuant to
Section 9.7 the Regular Trustees shall give all such notices and
communications specified herein to be given to the Capital
Security Holders to the Depositary, and shall have no notice
obligations to the Capital Security Beneficial Owners.
Section 9.6 Appointment of Successor Depositary.
If any Depositary elects to discontinue its services as
securities depositary with respect to the Capital Securities, the
Regular Trustees may, in their sole discretion, appoint a
successor Depositary with respect to such Capital Securities.
Section 9.7 Definitive Capital Security Certificates.
If:
(a) a Depositary elects to discontinue its services as
securities depositary with respect to the Capital
Securities and a successor Depositary is not appointed
within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect with the consent of the
Sponsor to terminate the book entry system through the
Depositary with respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust
with respect to such Capital Securities; and
(d) upon surrender of the Global Certificates by the
Depositary, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Certifi-
cates to be delivered to Capital Security Beneficial
Owners in accordance with the instructions of the
Depositary. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such
instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions
of the Depositary. The Definitive Capital Security
Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters,
numbers or other marks of identification or designation
and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation made
pursuant thereto or to conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall
receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to
keep each of them harmless;
then:
In the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, any two Regular Trustees
on behalf of the Trust shall execute and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In
connection with the issuance of any new Certificate under this
Section 9.8, the Regular Trustees may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant
Trust Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Capital Securities Guarantee, the Common Securities
Guarantee and the terms of the Trust Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon)
of the Holders of the Trust Securities which shall
be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder
of Trust Securities any deficit upon dissolution
of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other
than with respect to the Trust Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Capital Securities shall be entitled
to the same limitation of personal liability extended
to stockholders of private corporations for profit
organized under the General Corporation Law of the
State of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred
by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's
gross negligence (and, in the case of the Property
Trustee, subject to Section 3.9 hereof) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and
upon such information, opinions, reports or statements
presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such
other Person's professional or expert competence and
who has been selected with reasonable care by or on
behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets
from which Distributions to Holders of Trust Securities
might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any
other Covered Person, an Indemnified Person acting
under this Declaration shall not be liable to the Trust
or to any other Covered Person for its good faith
reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other
than the duties imposed on the Property Trustee under
the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered
Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is,
or provides terms that are, fair and reasonable to
the Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms,
considering in each case the relative interest of each
party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary
or accepted industry practices, and any applicable gen-
erally accepted accounting practices or principles. In
the absence of bad faith by the Indemnified Person, the
resolution, action or term so made, taken or provided
by the Indemnified Person shall not constitute a breach
of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified
Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be
entitled to consider such interests and factors as
it desires, including its own interests, and shall
have no duty or obligation to give any considera-
tion to any interest of or factors affecting the
Trust or any other Person; or
(ii) in its "good faith" or under another express stan-
dard, the Indemnified Person shall act under such
express standard and shall not be subject to any
other or different standard imposed by this
Declaration or by applicable law.
Section 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage,
liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or
termination of the Trust or any act or omission
performed or omitted by such Indemnified Person in good
faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the
scope of authority conferred on such Indemnified Person
by this Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (and, in the case
of the Property Trustee, subject to Section 3.9 hereof)
or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemni-
fied Person in defending any claim, demand, action,
suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition
of such claim, demand, action, suit or proceeding upon
receipt by the Sponsor of an undertaking by or on
behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person
is not entitled to be indemnified as authorized in
Section 10.4(a). The provisions of this Section 10.4
shall survive the termination of this Declaration and
the removal or resignation of any Trustee.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Note Issuer, the
Delaware Trustee and the Property Trustee may engage in or
possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar
to the business of the Trust, and the Trust and the Holders of
Trust Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or
profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be
deemed wrongful or improper. No Covered Person, the Sponsor, the
Note Issuer, the Delaware Trustee, or the Property Trustee shall
be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the
Trust, and any Covered Person, the Sponsor, the Note Issuer, the
Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full
books of account, records and supporting documents,
which shall reflect in reasonable detail, each transac-
tion of the Trust. The books of account shall be main-
tained on the accrual method of accounting, in
accordance with generally accepted accounting princi-
ples, consistently applied. The Trust shall use the
accrual method of accounting for United States federal
income tax purposes. The books of account and the
records of the Trust shall be examined by and reported
upon as of the end of each Fiscal Year by a firm of
independent certified public accountants selected by
the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Trust Securities,
within 90 days after the end of each Fiscal Year of the
Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income
or loss.
(c) The Regular Trustees shall cause to be duly prepared
and delivered to each of the Holders of Trust
Securities, any annual United States federal income tax
information statement, required by the Code, containing
such information with regard to the Trust Securities
held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under
the Code to deliver any such statement at a later date,
the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal
Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, an
annual United States federal income tax return, on a
Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on
behalf of the Trust with any state or local taxing
authority.
Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the
name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Notes held by the
Property Trustee shall be made directly to the Property Trustee
Account and no other funds of the Trust shall be deposited in the
Property Trustee Account. The signatories for such accounts
shall be designated by the Regular Trustees; provided, however,
that the Property Trustee shall designate the sole signatories
for the Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary
to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of,
and in fulfilling, its withholding obligations. The Regular
Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust
is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a distribution in the
amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to
be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by
any applicable terms of the Trust Securities, this
Declaration may only be amended by a written instrument
approved and executed by the Regular Trustees (or, if
there are more than two Regular Trustees a majority of
the Regular Trustees); and
(i) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property
Trustee, by the Property Trustee; and
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware
Trustee, by the Delaware Trustee;
(b) No amendment shall be made, and any purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an
Officers' Certificate from each of the Trust and
the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration
(including the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obliga-
tions or immunities of the Property Trustee, the
Property Trustee shall have first received:
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of
this Declaration (including the terms of the
Trust Securities); and
(B) an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment
is permitted by, and conforms to, the terms
of this Declaration (including the terms of
the Trust Securities); and
(iii) to the extent the result of such amendment would
be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States
federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered
under the Investment Company Act.
(c) at such time after the Trust has issued any Trust
Securities that remain outstanding, any amendment that
would adversely affect the rights, privileges or
preferences of any Holder of Trust Securities may be
effected only with such additional requirements as may
be set forth in the terms of such Trust Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of
the Trust Securities;
(e) Article IV shall not be amended without the consent of
the Holder(s) of a Majority in liquidation amount of
the Common Securities and;
(f) the rights of the Holder(s) of the Common Securities
under Article V to increase or decrease the number of,
and appoint and remove Trustees shall not be amended
without the consent of the Holder(s) of a Majority in
liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may
be amended without the consent of the Holders of the
Trust Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent
with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor; and
(iv) conform to any change in Rule 3a-5 or other
exemption from the requirement to register as an
Investment Company under the Investment Company
Act or written change in the interpretation or
application thereof by any legislative body,
court, government agency or regulatory authority
which amendment does not have a material adverse
effect on the rights, preferences or privileges of
the Holders.
Section 12.2 Meetings of the Holders of Trust Securities;
Action by Written Consent.
(a) Meetings of the Holders of any class of Trust
Securities may be called at any time by the Regular
Trustees (or as provided in the terms of the Trust
Securities) to consider and act on any matter on which
Holders of such class of Trust Securities are entitled
to act under the terms of this Declaration or the terms
of the Trust Securities. The Regular Trustees shall
call a meeting of the Holders of such class if directed
to do so by the Holders of at least 10% in liquidation
amount of such class of Trust Securities. Such
direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that
the signing Holders of Trust Securities wish to call a
meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of
Trust Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Trust
Securities exercising the right to call a meeting and
only those Trust Securities specified shall be counted
for purposes of determining whether the required
percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Trust Securities, the following provisions shall
apply to meetings of Holders of Trust Securities:
(i) notice of any such meeting shall be given to all
the Holders of Trust Securities having a right to
vote thereat at least 7 days and not more than 60
days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Trust
Securities is permitted or required under this
Declaration, such vote, consent or approval may
be given at a meeting of the Holders of Trust
Securities. Any action that may be taken at a
meeting of the Holders of Trust Securities may be
taken without a meeting if a consent in writing
setting forth the action so taken is signed by the
Holders of Trust Securities owning not less than
the minimum amount of Trust Securities in
liquidation amount that would be necessary to
authorize or take such action at a meeting at
which all Holders of Trust Securities having a
right to vote thereon were present and voting.
Prompt notice of the taking of action without a
meeting shall be given to the Holders of Trust
Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that
any written ballot submitted to a Holder for the
purpose of taking any action without a meeting
shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any
Person to act for it by proxy on all matters in
which a Holder of Trust Securities is entitled to
participate, including waiving notice of any
meeting, or voting or participating at a meeting.
No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder of Trust
Securities executing it. Except as otherwise
provided herein, all matters relating to the
giving, voting or validity of proxies shall be
governed by the General Corporation Law of the
State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders
of the Trust Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Trust
Securities shall be conducted by the Regular
Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration or
the terms of the Trust Securities or the Trust
Indenture Act otherwise provides, the Regular
Trustees, in their sole discretion, shall
establish all other provisions relating to
meetings of Holders of Trust Securities, including
notice of the time, place or purpose of any
meeting at which any matter is to be voted on by
any Holders of Trust Securities, waiver of any
such notice, action by consent without a meeting,
the establishment of a record date, quorum
requirements, voting in person or by proxy or any
other matter with respect to the exercise of any
such right to vote.
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Property Trustee represents and
warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a banking association with
trust powers, duly organized, validly existing and in
good standing under the laws of the United States, with
trust power and authority to execute and deliver, and
to carry out and perform its obligations under the
terms of, the Declaration and, with respect to the
initial Property Trustee, its principal place of
business in Illinois, and, with respect to any
Successor Property Trustee, its principal place of
business, in any state in the United States.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the
Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of
the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights
generally and to general principles of equity and the
discretion of the court (regardless of whether the
enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the
Declaration by the Property Trustee does not conflict
with or constitute a breach of the charter or By-laws
of the Property Trustee.
(d) No consent, approval or authorization of, or
registration with or notice to, any State or Federal
banking authority is required for the execution,
delivery or performance by the Property Trustee, of the
Declaration.
Section 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and
warrants to the Trust and the Sponsor at the time of the
Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of
business in the State of Delaware.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the
Declaration. The Declaration under Delaware law
constitutes a legal, valid and binding obligation of
the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights
generally and to general principles of equity and the
discretion of the court (regardless of whether the
enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal
banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by registered or certified
mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees
at the Trust's mailing address set forth below (or such
other address as the Trust may give notice of to the
Holders of the Trust Securities):
GREAT WESTERN FINANCIAL TRUST II
c/o Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
(b) if given to the Property Trustee, at the mailing
address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of
the Trust Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
(c) if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other
address as the Holder of the Common Securities may give notice to
the Trust):
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Attention: General Counsel
(d) if given to any other Holder, at the address set
forth on the books and records of the Trust.
(e) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as the Delaware
Trustee may give notice of to the Holders of the Trust
Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention: Michael J. Majchrzak
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or
other document is refused delivery or cannot be delivered because
of a changed address of which no notice was given, such notice or
other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws
of the State of Delaware and all rights and remedies shall be
governed by such laws without regard to principles of conflict of
laws.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not
be characterized for United States federal income tax purposes as
an association taxable as a corporation or a partnership but
rather that the Trust be characterized as a grantor trust or
otherwise in a manner such that each Holder of Trust Securities
will be treated as owning an undivided beneficial interest in the
Notes. The provisions of this Declaration shall be interpreted
to further this intention of the parties.
Section 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party
shall be deemed to be included, and all covenants and agreements
in this Declaration by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and
assigns, whether so expressed.
Section 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held
invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
Section 14.7 Counterparts.
This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature
pages shall be read as though one, and they shall have the same
force and effect as though all of the signers had signed a single
signature page.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
CARL F. GEUTHER,
as Trustee
___________________________
J. LANCE ERIKSON,
as Trustee
___________________________
BRUCE F. ANTENBERG,
as Trustee
___________________________
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By: _______________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: _______________________
Name:
Title:
GREAT WESTERN FINANCIAL CORPORATION,
as Sponsor
By: ______________________
Name:
Title:
<PAGE>
EXHIBIT A
TERMS OF
8.206% CAPITAL SECURITIES, SERIES A
8.206% COMMON SECURITIES, SERIES A
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 22, 1997 (as amended
from time to time, the "Declaration"), the designation, rights,
privileges, restrictions, preferences and other terms and
provisions of the Capital Securities and the Common Securities
are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) "Capital Securities." 300,000 Capital Securities of
the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of Three Hundred
Million Dollars ($300,000,000) and a liquidation amount
with respect to the assets of the Trust of $1,000 per
Capital Security, are hereby designated for the
purposes of identification only as "8.206% Capital
Securities, Series A (the "Capital Securities"). The
Certificates evidencing the Capital Securities shall be
substantially in the form attached hereto as Annex I,
with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom
or practice.
(b) "Common Securities." 9,279 Common Securities of the
Trust with an aggregate liquidation amount with respect
to the assets of the Trust of Nine Million Two Hundred
Seventy-Nine Thousand Dollars ($9,279,000) and a
liquidation amount with respect to the assets of the
Trust of $1,000 per Common Security, are hereby
designated for the purposes of identification only as
"8.206% Common Securities, Series A" (the "Common
Securities"). The Certificates evidencing the Common
Securities shall be substantially in the form attached
hereto as Annex II, with such changes and additions
thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Trust Security will be
fixed at a rate per annum of 8.206% (the "Coupon Rate")
of the stated liquidation amount of $1,000 per Trust
Security, such rate being the rate of interest payable
on the Notes to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual
period will bear interest thereon compounded semi-
annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used
herein includes any such interest payable unless
otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the
Notes held by the Property Trustee. The amount of
Distributions payable for any period will be computed
for any full semi-annual Distribution period on the
basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full semi-annual
Distribution period for which Distributions are
computed, on the basis of the actual number of days
elapsed per 30-day month.
(b) Distributions on the Trust Securities will be
cumulative, will accrue from January 27, 1997, and will
be payable semi-annually in arrears, on February 1 and
August 1 of each year (each a "Distribution Date") to
the Holders of record on the applicable record date,
commencing on August 1, 1997, except as otherwise
described below. The Note Issuer has the right under
the Indenture to defer payments of interest by
extending the interest payment period from time to time
on the Notes for a period not exceeding 10 consecutive
semi-annual periods (each an "Extension Period") and,
during such Extension Period no interest shall be due
and payable on the Notes, provided that no Extension
Period shall last beyond the date of maturity of the
Notes. As a consequence of such deferral,
Distributions will also be deferred. Despite such
deferral, semi-annual Distributions will continue to
accrue with interest thereon (to the extent permitted
by applicable law) at the Coupon Rate compounded semi-
annually during any such Extension Period. Prior to
the termination of any such Extension Period, the Note
Issuer may further extend such Extension Period;
provided that such Extension Period together with all
such previous and further extensions thereof may not
exceed 10 consecutive semi-annual periods. Payments of
accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on
the first record date after the end of the Extension
Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Note
Issuer may commence a new Extension Period as if no
Extension Period had previously been declared, subject
to the above requirements.
(c) Distributions on the Trust Securities will be payable
to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates.
While the Capital Securities remain in book-entry only
form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment
dates correspond to the interest payment dates on the
Notes. Such distributions will be paid through the
Property Trustee, who will hold amounts received in
respect of the Notes for the benefit of the holders of
the Trust Securities. Subject to any applicable laws
and regulations and the provisions of the Declaration,
each such payment in respect of the Capital Securities
will be made as described under the heading
"Description of the Offered Capital Securities -- Book-
Entry Only Issuance -- The Depository Trust Company" in
the Prospectus Supplement dated January 22, 1997 (the
"Prospectus Supplement"), to the Prospectus dated
January 21, 1997 (together, the "Prospectus"), of the
Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust. The relevant
record dates for the Common Securities shall be the
same record date as for the Capital Securities. If the
Capital Securities shall not continue to remain in
book-entry only form, the relevant record dates for the
Capital Securities shall be selected by the Regular
Trustees, which dates shall be more than one Business
Day but less than 60 Business Days before the relevant
payment dates, which payment dates correspond to the
interest payment dates on the Notes. Distributions
payable on any Trust Securities that are not punctually
paid on any Distribution payment date, as a result of
the Note Issuer having failed to make a payment under
the Notes, will cease to be payable to the Person in
whose name such Trust Securities are registered on the
relevant record date, and such defaulted Distribution
will instead be payable to the Person in whose name
such Trust Securities are registered on the special
record date or other specified date determined in
accordance with the Indenture. If any date on which
Distributions are payable on the Trust Securities is
not a Business Day, then payment of the Distribution
payable on such date will be made on the next
succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for
hereunder, such property shall be distributed Pro Rata
(as defined herein) among the Holders of the Trust
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust, the Holders
of the Trust Securities on the date of the liquidation,
dissolution, winding-up or termination, as the case may be, will
be entitled to receive out of the assets of the Trust available
for distribution to Holders of Trust Securities after
satisfaction of liabilities of creditors an amount equal to the
aggregate of the stated liquidation amount of $1,000 per Trust
Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such liquidation,
dissolution, winding-up or termination, Notes in an aggregate
principal amount equal to the aggregate stated liquidation amount
of such Trust Securities and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on,
such Trust Securities, shall be distributed on a Pro Rata basis
to the Holders of the Trust Securities in exchange for such Trust
Securities.
If, upon any such liquidation, dissolution, winding-up
or termination, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Securities shall be
paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Notes in whole or in part,
whether at maturity or upon redemption, the proceeds
from such repayment or payment shall be simultaneously
applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal
amount of the Notes so repaid or redeemed at a
redemption price (the "Redemption Price") which, in the
case of any permitted redemption on or after February
1, 2007, shall equal the following prices, expressed in
percentages of the liquidation amount, together with
accumulated Distributions to the redemption date, if
redeemed during the 12 month period beginning February
1:
<PAGE>
Redemption
Year Price
---- ----------
2007 104.1030%
2008 103.6927%
2009 103.2824%
2010 102.8721%
2011 102.4618%
2012 102.0515%
2013 101.6412%
2014 101.2309%
2015 100.8206%
2016 100.4103%
and at 100% on or after February 1, 2017.
The Redemption Price, in the case of a permitted redemption
prior to February 1, 2007 shall equal the Make-Whole Amount for a
corresponding $1,000 principal amount of Notes together with
accumulated Distributions to the redemption date. Holders will
be given not less than 30 nor more than 60 days notice of such
redemption.
(b) If fewer than all the outstanding Trust Securities are
to be so redeemed, the Common Securities and the
Capital Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be as described
in Paragraph 4(f)(ii) below.
(c) If a Special Event (as defined below) shall occur and
be continuing the Regular Trustees shall dissolve the
Trust and, after satisfaction of creditors, cause Notes
held by the Property Trustee, having an aggregate
principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical
to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on and having
the same record date for payment as the Trust
Securities, to be distributed to the Holders of the
Trust Securities in liquidation of such Holders'
interests in the Trust on a Pro Rata basis, within 90
days following the occurrence of such Special Event
(the "90-Day Period"); provided, however, that, in the
case of the occurrence of a Tax Event (as defined
below), as a condition of such dissolution and
distribution, the Regular Trustees shall have received
an opinion of independent tax counsel experienced in
such matters (a "No Recognition Opinion"), which
opinion may rely on published revenue rulings of the
Internal Revenue Service, to the effect that the
Holders of the Trust Securities will not recognize any
gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust
and the distribution of Notes, and provided, further,
that, if at the time there is available to the Trust
the opportunity to eliminate, within the 90-Day Period,
the Special Event by taking some ministerial action,
such as filing a form or making an election, or
pursuing some other similar reasonable measure that has
no adverse effect on the Trust, the Note Issuer, the
Sponsor or the Holders of the Trust Securities
("Ministerial Action"), the Trust or the Note Issuer
will pursue such Ministerial Action in lieu of such
dissolution and distribution.
In the case of the occurrence of a Tax Event, if
(i) the Note Issuer has received an opinion (a
"Redemption Tax Opinion") of independent tax counsel
experienced in such matters that, as a result of such
Tax Event, there is more than an insubstantial risk
that the Note Issuer would be precluded from deducting
the interest on the Notes for United States federal
income tax purposes even if the Notes were distributed
to the Holders of Trust Securities in liquidation of
such Holders' interests in the Trust as described in
this paragraph 4(c), or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust,
the Note Issuer shall have the right at any time, upon
not less than 30 nor more than 60 days notice, to
redeem the Notes in whole or in part for cash within
the 90-Day Period and following such redemption, Trust
Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Notes so
redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided,
however, that, if at the time there is available to the
Trust the opportunity to eliminate within such 90-Day
Period, the Tax Event by taking some Ministerial
Action, the Trust or the Note Issuer will pursue such
Ministerial Action in lieu of redemption.
"Special Event" means a Tax Event or an Investment
Company Event (as defined below). "Tax Event" means
that the Regular Trustees shall have received an
opinion of independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect
that on or after the date of the Prospectus Supplement,
as a result of (a) any amendment to, or change
(including any announced prospective change) in, the
laws (or any regulations thereunder) of the
United States or, with respect to clause (ii) below,
any political subdivision or taxing authority thereof
or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or
regulations by any legislative body, court,
governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is
issued or announced or which action is taken
(irrespective of any retroactive effect), in each case
on or after the date of the Prospectus Supplement,
there is more than an insubstantial risk that (i) the
Trust would be subject to United States federal income
tax with respect to interest accrued or received on the
Notes, (ii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other
governmental charges, or (iii) interest payable by the
Note Issuer to the Trust on the Notes would not be
deductible by the Note Issuer for United States federal
income tax purposes. "Investment Company Event" means
that the Regular Trustees shall have received an
opinion from independent counsel experienced in such
matters to the effect that, as a result of the
occurrence of a change in law or regulation or a
written change in interpretation or application of law
or regulation by any legislative body, court,
governmental agency or regulatory authority, there is
more than an insubstantial risk that the Trust is or
will within 90 days of the date of such opinion be
considered an "investment company" which is required to
be registered under the Investment Company Act of 1940,
as amended, which change becomes effective on or after
the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for
any distribution of Notes and dissolution of the Trust:
(i) the Trust Securities will no longer be deemed to be
outstanding, (ii) The Depository Trust Company (the
"Depositary") or its nominee (or any successor
Depositary or its nominee), as the record Holder of the
Capital Securities, will receive a registered global
certificate or certificates representing the Notes to
be delivered upon such distribution, and (iii) any
certificates representing Trust Securities not held
by the Depositary or its nominee (or any successor
Depositary or its nominee), will be deemed to represent
beneficial interests in the Notes having an aggregate
principal amount equal to the aggregate stated
liquidation amount of such Trust Securities until such
certificates are presented to the Note Issuer or its
agent for transfer or reissue.
(d) Upon the written request of the Note Issuer, the
Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Notes held by the
Property Trustee, having an aggregate principal amount
equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and
unpaid Distributions on and having the same record date
for payment as the Trust Securities, to be distributed
to the Holders of the Trust Securities in liquidation
of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the written request.
(e) The Trust may not redeem fewer than all the outstanding
Trust Securities unless all accrued and unpaid
Distributions have been paid on all Trust Securities
for all semi-annual Distribution periods terminating on
or before the date of redemption.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of
distribution of Notes in exchange for the Trust
Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder
of Trust Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof
which, in the case of a redemption, will be the
date fixed for redemption of the Notes. For
purposes of the calculation of the date of
redemption or exchange and the dates on which
notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to
Holders of Trust Securities. Each
Redemption/Distribution Notice shall be addressed
to the Holders of Trust Securities at the address
of each such Holder appearing in the books and
records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing
of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Trust Securities are to be redeemed, the Trust
Securities to be redeemed shall be redeemed
Pro Rata and, in the event Capital Securities are
held in book-entry only form by the Depositary or
its nominee (or any successor Depositary or its
nominee), the Depositary will reduce Pro Rata
the amount of the interest of each Depositary
Participant in the Capital Securities to be
redeemed in accordance with its procedures;
provided, that if, as a result of such Pro Rata
redemption, Depositary Participants would hold
fractional interests in the Capital Securities,
the Depositary will adjust the amount of the
interest of each Depositary Participant to be
redeemed to avoid such fractional interests;
(iii) If Trust Securities are to be redeemed and the
Trust gives a Redemption/Distribution Notice,
which notice may only be issued if the Notes are
redeemed as set out in this paragraph 4 (which
notice will be irrevocable), then (A) while the
Capital Securities are in book-entry only form,
with respect to the Capital Securities, by 12:00
noon, New York City time, on the redemption date,
provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity
of the Notes, the Property Trustee will deposit
irrevocably with the Depositary or its nominee (or
any successor Depositary or its nominee) funds
sufficient to pay the applicable Redemption Price
with respect to the Capital Securities and will
give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the
Holders of the Capital Securities, and (B) with
respect to Capital Securities issued in definitive
form and Common Securities, provided, that the
Note Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the
related redemption or maturity of the Notes, the
Property Trustee will pay the relevant Redemption
Price to the Holders of such Trust Securities by
check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on
the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited
as required, if applicable, then immediately prior
to the close of business on the date of such
deposit, or on the redemption date, if later, as
applicable, Distributions will cease to accrue on
the Trust Securities so called for redemption and
all rights of Holders of such Trust Securities so
called for redemption will cease, except the right
of the Holders of such Trust Securities to receive
the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees
nor the Trust shall be required to register or
cause to be registered the transfer of any Trust
Securities that have been so called for
redemption. If any date fixed for redemption of
Trust Securities is not a Business Day, then
payment of the Redemption Price payable on such
date will be made on the next succeeding day that
is a Business Day (and without any interest or
other payment in respect of any such delay) except
that, if such Business Day falls in the next
calendar year, such payment will be made on the
immediately preceding Business Day, in each case
with the same force and effect as if made on such
date fixed for redemption. If payment of the
Redemption Price in respect of any Trust
Securities is improperly withheld or refused and
not paid either by the Property Trustee or by the
Sponsor as guarantor pursuant to the Capital
Securities Guarantee or Common Securities
Guarantee, as the case may be, Distributions on
such Trust Securities will continue to accrue from
the original redemption date to the actual date of
payment, in which case the actual payment date
will be considered the date fixed for redemption
for purpose of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to
(A) in respect of the Capital Securities, the
Depositary or its nominee (or any successor
Depositary or its nominee) if the Global
Certificates have been issued or, if Definitive
Capital Security Certificates have been issued, to
the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States
federal securities laws), provided the acquirer is
not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to
time purchase outstanding Capital Securities by
tender, in the open market or by private
agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting
rights.
(b) Subject to the requirements set forth in this
paragraph, the Holders of a majority in liquidation
amount of the Capital Securities, voting separately as
a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to
the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the
time, method and place of conducting any proceeding for
any remedy available to the Note Trustee, or exercising
any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and
its consequences that is waivable under Section 513 of
the Indenture, or (iii) exercise any right to rescind
or annul a declaration that the principal of all the
Notes shall be due and payable, provided, however,
that, where a consent or action under the Indenture
would require the consent or act of the Holders of all
of or of greater than a majority of the Holders in
principal amount of Notes affected thereby (a "Super-
Majority"), the Property Trustee may only give such
consent or take such action at the direction of the
Holders of all of or of at least the proportion in
liquidation amount of the Capital Securities which the
relevant Super-Majority represents of the aggregate
principal amount of the Notes outstanding, as
applicable. Other than with respect to directing the
time, method and place of conducting any proceeding for
any remedy available to the Property Trustee or the
Note Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the
directions of the Holders of the Capital Securities
under this paragraph unless the Property Trustee has
obtained an opinion of independent tax counsel
experienced in such matters to the effect that for the
purposes of United States federal income tax law the
Trust will not fail to be classified as a grantor trust
on account of such action. If an Event of Default with
respect to the Notes, constituting the failure to pay
interest or principal on the Notes on the date such
interest or principal is otherwise payable, has
occurred and is continuing, then a holder of Trust
Securities may directly institute a proceeding for
enforcement of payment to such holder directly of the
principal of or interest on the Notes having a
principal amount equal to the aggregate liquidation
amount of the Trust Securities of such holder on or
after the respective due date specified in the Notes.
The holders of Trust Securities will not be able to
exercise directly any other remedy available to the
holders of the Notes unless the Property Trustee fails
to do so.
Any approval or direction of Holders of Capital
Securities may be given at a separate meeting of
Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Trust
Securities or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which
Holders of Capital Securities are entitled to vote, or
of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each
Holder of record of Capital Securities. Each such
notice will include a statement setting forth (i) the
date of such meeting or the date by which such action
is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon
which the written consent is sought and
(iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Capital
Securities will be required for the Trust to redeem and
cancel Capital Securities or to distribute the Notes in
accordance with the Declaration and the terms of the
Trust Securities.
Notwithstanding that Holders of Capital Securities
are entitled to vote or consent under any of the
circumstances described above, any of the Capital
Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote
or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), 6(c) and 7 or
as otherwise required by law and the Declaration, the
Holder(s) of the Common Securities will have no voting
rights.
(b) The Holder(s) of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote
to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only
after an Event of Default with respect to the Capital
Securities has been cured, waived or otherwise
eliminated and to the requirements of the second to
last sentence of this paragraph, the Holder(s) of a
Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct
the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the
Property Trustee under the Declaration, including
(i) directing the time, method and place of conducting
any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on
the Note Trustee with respect to the Notes, (ii) waive
any past default and its consequences that is waivable
under Section 513 of the Indenture, or (iii) exercise
any right to rescind or annul a declaration that the
principal of all the Notes shall be due and payable,
provided, however, that, where a consent or action
under the Indenture would require the consent or act of
the Holders of a Super-Majority, the Property Trustee
may only give such consent or take such action at the
direction of the Holder(s) of all of or of at least the
proportion in liquidation amount of the Common
Securities which the relevant Super-Majority represents
of the aggregate principal amount of the Notes
outstanding, as applicable. Pursuant to this
paragraph 6(c), the Property Trustee shall not revoke
any action previously authorized or approved by a vote
of the applicable Holders of the Capital Securities
pursuant to paragraph 5(b). Other than with respect to
directing the time, method and place of conducting any
proceeding for any remedy available to the Property
Trustee or the Note Trustee as set forth above, the
Property Trustee shall not take any action in
accordance with the directions of the Holder(s) of the
Common Securities under this paragraph unless the
Property Trustee has obtained an opinion of independent
tax counsel experienced in such matters to the effect
that for the purposes of United States federal income
tax law the Trust will not fail to be classified as a
grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may after
written request to the Property Trustee to enforce such
rights, institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights
under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any
other person.
Any approval or direction of Holder(s) of Common
Securities may be given at a separate meeting of
Holder(s) of Common Securities convened for such
purpose, at a meeting of all of the Holders of Trust
Securities or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which
Holder(s) of Common Securities are entitled to vote, or
of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the
date of such meeting or the date by which such action
is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holder(s) of the Common
Securities will be required for the Trust to redeem and
cancel Common Securities or to distribute the Notes in
accordance with the Declaration and the terms of the
Trust Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of
the Declaration, if any proposed amendment to the
Declaration provides for, or the Regular Trustees
otherwise propose to effect (i) any action that would
adversely affect the powers, preferences or special
rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the
liquidation, dissolution, winding-up or termination of
the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Trust
Securities, voting together as a single class, will be
entitled to vote on such amendment or proposal (but not
on any other amendment or proposal) and such amendment
or proposal shall not be effective except with the
approval of the Holders of at least 66-2/3% in
liquidation amount of the Trust Securities, voting
together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or
only the Common Securities, then only the affected
class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be
effective except with the approval of 66-2/3% in
liquidation amount of such class of Trust Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes, the Capital Securities Guarantee
and the Common Securities Guarantee is required under
the Indenture or the applicable Guarantee with respect
to any amendment, modification or termination on the
Indenture, the Notes, the Capital Securities Guarantee
or the Common Securities Guarantee, the Property
Trustee shall request the direction of the Holders of
the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect
to such amendment, modification or termination as
directed by a majority in liquidation amount of the
Trust Securities voting together as a single class;
provided, however, that where a consent under the
Indenture or the applicable Guarantee would require the
consent of a Super-Majority, the Property Trustee may
only give such consent at the direction of the Holders
of all of or of at least the proportion in liquidation
amount of the Trust Securities which the relevant
Super-Majority represents of the aggregate principal
amount of the Notes outstanding, as applicable;
provided, further, that the Property Trustee shall not
take any action in accordance with the directions of
the Holders of the Trust Securities under this
paragraph 7(b) unless the Property Trustee has obtained
an opinion of independent tax counsel experienced in
such matters to the effect that for the purposes of
United States federal income tax law the Trust will not
be classified as other than a grantor trust on account
of such action.
8. Pro Rata.
A reference to any payment, distribution or treatment as
being "Pro Rata" shall mean pro rata to each Holder of Trust
Securities according to the aggregate liquidation amount of the
Trust Securities held by the relevant Holder in relation to the
aggregate liquidation amount of all Trust Securities outstanding
unless, in relation to a payment, an Event of Default under the
Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder
of the Capital Securities pro rata according to the aggregate
liquidation amount of Capital Securities held by the relevant
Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of
all amounts owed to the Holders of the Capital Securities, to
each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that,
where an Event of Default occurs and is continuing hereunder, the
rights of Holder(s) of the Common Securities to payment in
respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to
payment of the Holders of the Capital Securities.
10. Acceptance of Trust Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the
Capital Securities Guarantee and the Common Securities Guarantee,
respectively, including the subordination provisions therein and
to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Trust Securities shall have no preemptive
rights to subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee
(as may be appropriate), and the Indenture to a Holder without
charge on written request to the Trust at its principal place of
business.
<PAGE>
ANNEX I
IF THE CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Capital Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is
registered in the name of The Depository Trust Company, a New
York Corporation (the "Depositary") or a nominee of the
Depositary. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances
described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a
whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of
the Depositary) may be registered except in limited
circumstances.
Unless this Capital Security is presented by an authorized
representative of the Depositary to the Trust or its agent for
registration of transfer, exchange or payment, and any Capital
Security issued is registered in the name of Cede & Co. or such
other name as is requested by an authorized representative of the
Depositary and any payment hereon is made to Cede & Co. or such
other entity as is requested by an authorized representative of
the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Capital Securities
CUSIP NO. _____________
Certificate Evidencing Capital Securities
of
GREAT WESTERN FINANCIAL TRUST II
Capital Securities
(liquidation amount $1,000 per Capital Security)
GREAT WESTERN FINANCIAL TRUST II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that ___________________________ (the "Holder")
is the registered owner of capital securities of the Trust
representing undivided beneficial interests in the assets of the
Trust designated the 8.206% Capital Securities, Series A
(liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the
Capital Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 22, 1997,
as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Capital Securities
as set forth in Exhibit A to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in
the Declaration. The Holder is entitled to the benefits of the
Capital Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
federal income tax purposes, the Notes as indebtedness and the
Capital Securities as evidence of indirect beneficial ownership
in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate
this _____ day of January, 1997.
J. LANCE ERIKSON,
as Trustee
_____________________________
BRUCE F. ANTENBERG,
as Trustee
_____________________________
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Insert address and zip code of assignee) and irrevocably
appoints
________________________________________________________________
________________________________________________________________
________________________________________________________________
agent to transfer this Capital Security Certificate on the books
of the Trust. The agent may substitute another to act for him or
her.
Date:________________________
Signature:__________________________________
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Property Trustee,
which requirements include membership or participation in STAMP
or such other "signature guaranty program" as may be determined
by the Property Trustee in addition to or in substitution for
STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
GREAT WESTERN FINANCIAL TRUST II
Common Securities
(liquidation amount $1,000 per Common Security)
GREAT WESTERN FINANCIAL TRUST II, a statutory business
trust formed under the laws of the State of Delaware (the
"Trust"), hereby certifies that ____________ (the "Holder") is
the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the
Trust designated the 8.206% Common Securities, Series A
(liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the
books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the
Common Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 22, 1997,
as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities
as set forth in Exhibit A to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in
the Declaration.
The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Trust
will provide a copy of the Declaration, the Common Securities
Guarantee and the Indenture to the Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
federal income tax purposes the Notes as indebtedness and the
Common Securities as evidence of indirect beneficial ownership
in the Notes.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this _____ day of January, 1997.
J. LANCE ERIKSON,
as Trustee
_____________________________
BRUCE F. ANTENBERG,
as Trustee
_____________________________
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Common Security Certificate to:
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Insert address and zip code of assignee) and irrevocably
appoints
________________________________________________________________
________________________________________________________________
________________________________________________________________
agent to transfer this Common Security Certificate on the books
of the Trust. The agent may substitute another to act for him or
her.
Date:____________________
Signature:__________________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Property Trustee,
which requirements include membership or participation in STAMP
or such other "signature guaranty program" as may be determined
by the Property Trustee in addition to or in substitution for
STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
CAPITAL SECURITIES GUARANTEE AGREEMENT
GREAT WESTERN FINANCIAL TRUST II
Dated as of January 22, 1997
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND INTERPRETATION. . . . . . . . 2
Section 1.1. Definitions and Interpretation.. . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT . . . . . . . . . . 5
Section 2.1. Trust Indenture Act; Application.. . . . . . . 5
Section 2.2. Lists of Holders of Trust Securities.. . . . . 5
Section 2.3. Reports by the Capital Guarantee Trustee.. . . 6
Section 2.4. Periodic Reports to Capital Guarantee Trustee. 6
Section 2.5. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . . 6
Section 2.6. Events of Default; Waiver. . . . . . . . . . . 6
Section 2.7. Event of Default; Notice.. . . . . . . . . . . 7
Section 2.8. Conflicting Interests. . . . . . . . . . . . . 7
ARTICLE III
POWER, DUTIES AND RIGHTS OF
CAPITAL GUARANTEE TRUSTEE. . . . . . . . . 7
Section 3.1. Powers and Duties of the Capital Guarantee
Trustee. . . . . . . . . . . . . . . . . . . . 7
Section 3.2. Certain Rights of Capital Guarantee Trustee. . 9
Section 3.3. Not Responsible for Recitals or Issuance of
Guarantee. . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE. . . . . . . . . 12
Section 4.1. Capital Guarantee Trustee; Eligibility.. . . . 12
Section 4.2. Appointment Removal and Resignation of Capital
Guarantee Trustees.. . . . . . . . . . . . . . 13
ARTICLE V
GUARANTEE. . . . . . . . . . . . . 13
Section 5.1. Guarantee. . . . . . . . . . . . . . . . . . . 13
Section 5.2. Subordination. . . . . . . . . . . . . . . . . 14
Section 5.3. Waiver of Notice and Demand. . . . . . . . . . 14
Section 5.4. Obligations Not Affected.. . . . . . . . . . . 14
Section 5.5. Rights of Holders. . . . . . . . . . . . . . . 15
Section 5.6. Guarantee of Payment.. . . . . . . . . . . . . 15
Section 5.7. Subrogation. . . . . . . . . . . . . . . . . . 15
Section 5.8. Independent Obligations. . . . . . . . . . . . 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION. . . . . 16
Section 6.1. Limitation of Transactions.. . . . . . . . . . 16
Section 6.2. Ranking. . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION . . . . . . . . . . . . 17
Section 7.1. Termination. . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . 17
Section 8.1. Exculpation. . . . . . . . . . . . . . . . . . 17
Section 8.2. Indemnification. . . . . . . . . . . . . . . . 18
ARTICLE IX
MISCELLANEOUS. . . . . . . . . . . . 18
Section 9.1. Successors and Assigns.. . . . . . . . . . . . 18
Section 9.2. Amendments.. . . . . . . . . . . . . . . . . . 18
Section 9.3. Notices. . . . . . . . . . . . . . . . . . . . 19
Section 9.4. Benefit. . . . . . . . . . . . . . . . . . . . 19
Section 9.5. Governing Law. . . . . . . . . . . . . . . . . 19
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated
as of January 22, 1997, is executed and delivered by Great Western
Financial Corporation, a Delaware corporation (the "Guarantor"),
and The First National Bank of Chicago, as trustee (the "Capital
Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined
herein) of Great Western Financial Trust II, a Delaware statutory
business trust (the "Issuer").
RECITALS
WHEREAS, pursuant to an Amended and Restated Declaration
of Trust (the "Declaration"), dated as of January 22, 1997, among
the trustees of the Issuer named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the
date hereof $300 million aggregate stated liquidation amount of
Capital Securities designated the 8.206% Capital Securities, Series
A (the "Capital Securities");
WHEREAS, as incentive for the Holders (as hereinafter
defined) to purchase the Capital Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth
in this Guarantee Agreement, to pay to the Holders of the Capital
Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth
herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee Agreement")
with substantially identical terms to this Guarantee Agreement for
the benefit of the holders of the Common Securities (as defined
herein) except that if an Event of Default (as defined in the
Indenture (as defined herein)), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Capital Securities to
receive Guarantee Payments under this Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions and Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as
modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Capital Guarantee Trustee" means The First National Bank
of Chicago until a Successor Capital Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms
of this Guarantee Agreement and thereafter means each such
Successor Capital Guarantee Trustee.
"Common Securities" means the common securities
representing undivided beneficial interests in the assets of
the Issuer.
"Covered Person" means any Holder or beneficial owner of
Capital Securities.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person by that Person; or
(b) in any other case, in the name of such Person by one
or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Guarantee
Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions (as defined in the Declaration)
that are required to be paid on such Capital Securities to the
extent the Issuer shall have received a payment of interest or
principal on the Notes therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has
received a payment of interest or principal or premium, if any, on
the Notes with respect to any Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Notes to the
Holders in exchange for Capital Securities as provided in the
Declaration or the redemption of all of the Capital Securities upon
the maturity or redemption of the Notes), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment to
the extent the Issuer has received a payment on the Notes therefor,
and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the
books and records of the Issuer of any Capital Securities;
provided, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Guarantee Trustee,
any Affiliate of the Capital Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees,
representatives or agents of the Capital Guarantee Trustee.
"Indenture" means the Indenture dated as of September 12,
1990, as amended and supplemented by a First Supplemental
Indenture, dated as of April 30, 1993, the Second Supplemental
Indenture; dated as of December 6, 1995 and the Third Supplemental
Indenture, dated as of January 22, 1997, among the Note Issuer and
Harris Trust and Savings Bank, as trustee, and any indenture
supplemental thereto pursuant to which certain Notes are to be
issued.
"Majority in liquidation amount of the Trust Securities"
means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of Capital Securities, voting separately as a class, of
more than 50% of the liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Capital Securities.
"Note Issuer" means the Guarantor in its capacity as
issuer of the Notes.
"Notes" means the subordinated debt securities of the
Note Issuer issued pursuant to the Indenture and acquired by the
Issuer.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by two Authorized Officers of such
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer
in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied
with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Capital
Guarantee Trustee, any vice-president, any assistant vice-
president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust
officer or any other officer customarily performing functions
similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because
of that officer's knowledge of and familiarity with the particular
subject.
"Securities Act" means the Securities Act of 1933,
as amended from time to time, or any successor legislation.
"Successor Capital Guarantee Trustee" means a successor
Capital Guarantee Trustee possessing the qualifications to act as
Capital Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act
of 1939, in effect at the date as of which this instrument
was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture
Act" means to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Securities" means collectively the Common
Securities and the Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of
this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such duties imposed by the Trust Indenture
Act shall control.
Section 2.2. Lists of Holders of Trust Securities.
(a) The Guarantor shall provide the Capital Guarantee Trustee
with a list, in such form as the Capital Guarantee
Trustee may reasonably require, of the names and
addresses of the Holders of the Capital Securities ("List
of Holders") as of such date, (i) within 14 days after
each record date for payment of distributions on the
Capital Securities, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for
a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Capital
Guarantee Trustee provided that the Guarantor shall not
be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent
List of Holders given to the Capital Guarantee Trustee by
the Guarantor. The Capital Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of
a new List of Holders.
(b) The Capital Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section
312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Capital Guarantee Trustee.
Within 60 days after May 15 of each year, the Capital
Guarantee Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Capital Guarantee
Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
Section 2.4. Periodic Reports to Capital Guarantee Trustee.
The Guarantor shall provide to the Capital Guarantee
Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture
Act.
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Capital Guarantee
Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation amount of
Capital Securities may, by vote, on behalf of the Holders of all of
the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent
thereon.
Section 2.7. Event of Default; Notice.
(a) The Capital Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default known to the Capital
Guarantee Trustee, transmit by mail, first class postage prepaid,
to the Holders of the Capital Securities, notices of such Events of
Default, unless such defaults have been cured before the giving of
such notice, provided, that, the Capital Guarantee 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 Capital Guarantee
Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Capital
Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Guarantee
Trustee shall have received written notice, or a Responsible
Officer shall have obtained written notice, of such Event
of Default.
Section 2.8. Conflicting Interests.
The Declaration shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWER, DUTIES AND RIGHTS OF
CAPITAL GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Capital Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Capital
Guarantee Trustee for the benefit of the Holders of
the Capital Securities, and the Capital Guarantee Trustee
shall not transfer this Guarantee Agreement to any Person
except a Holder of Capital Securities exercising his or
her rights pursuant to Section 5.4(b) or to a Successor
Capital Guarantee Trustee on acceptance by such Successor
Capital Guarantee Trustee of its appointment to act as
Successor Capital Guarantee Trustee. The right, title
and interest of the Capital Guarantee Trustee shall
automatically vest in any Successor Capital Guarantee
Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of
such Successor Capital Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Capital Guarantee Trustee shall enforce this
Guarantee Agreement for the benefit of the Holders of the
Capital Securities.
(c) The Capital Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events
of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall
be read into this Guarantee Agreement against the Capital
Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to
Section 2.6), the Capital Guarantee Trustee shall
exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Capital Guarantee Trustee from
liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Capital
Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee
Agreement, and the Capital Guarantee Trustee
shall not be liable except for the performance
of such duties and obligations as are
specifically set forth in this Guarantee
Agreement, and no implied covenants or
obligations shall be read into this Guarantee
Agreement against the Capital Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Capital Guarantee Trustee, the Capital
Guarantee Trustee may conclusively rely, as to
the truth of the statements and the
correctness of the opinions expressed therein,
upon any certificates or opinions furnished to
the Capital Guarantee Trustee and conforming
to the requirements of this Guarantee
Agreement; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be
furnished to the Capital Guarantee Trustee,
the Capital Guarantee Trustee shall be under a
duty to examine the same to determine whether
or not they conform to the requirements of
this Guarantee Agreement;
(ii) the Capital Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Capital Guarantee
Trustee, unless it shall be proved that the Capital
Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be
taken by it in good faith in accordance with the
direction of the Holders of not less than a
Majority in liquidation amount of the Capital
Securities relating to the time, method and place
of conducting any proceeding for any remedy
available to the Capital Guarantee Trustee, or
exercising any trust or power conferred upon the
Capital Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Capital Guarantee Trustee to expend or
risk its own funds or otherwise incur personal
financial liability in the performance of any of
its duties or in the exercise of any of its rights
or powers, if the Capital Guarantee Trustee shall
have reasonable grounds for believing that the
repayment of such funds or liability is not
reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against
such risk or liability is not reasonably assured to
it.
Section 3.2. Certain Rights of Capital Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Capital Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party
or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently
evidenced by a Direction or an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Capital Guarantee Trustee shall deem
it desirable that a matter be proved or established
before taking, suffering or omitting any action
hereunder, the Capital Guarantee Trustee (unless
other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate
which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Capital Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (or any rerecording, refiling or
registration thereof).
(v) The Capital Guarantee Trustee may consult with
counsel, and the written advice or opinion of such
counsel with respect to legal matters shall be full
and complete authorization and protection in
respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with
such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Capital
Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration
of this Guarantee Agreement from any court of
competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such
Holder shall have provided to the Capital Guarantee
Trustee such adequate security and indemnity as
would satisfy a reasonable person in the position
of the Capital Guarantee Trustee, against the
costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be
requested by the Capital Guarantee Trustee;
provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Capital
Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee
Agreement.
(vii) The Capital Guarantee Trustee shall not be bound to
make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document, but the Capital Guarantee Trustee, in its
discretion may make such further inquiry or
investigation into such facts or matters as it may
see fit.
(viii) The Capital Guarantee 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 Capital Guarantee
Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Capital Guarantee Trustee
or its agents hereunder shall bind the Holders of
the Capital Securities, and the signature of the
Capital Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such
action. No third party shall be required to
inquire as to the authority of the Capital
Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this
Guarantee Agreement, both of which shall be
conclusively evidenced by the Capital Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee
Agreement the Capital Guarantee Trustee shall deem
it desirable to receive instructions with respect
to enforcing any remedy or right or taking any
other action hereunder, the Capital Guarantee
Trustee (i) may request instructions from the
Holders of the Capital Securities, (ii) may refrain
from enforcing such remedy or right or taking such
other action until such instructions are received,
and (iii) shall be protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Capital Guarantee
Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in
any jurisdiction in which it shall be illegal, or in
which the Capital Guarantee Trustee shall be unqualified
or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Capital Guarantee Trustee
shall be construed to be a duty.
Section 3.3. Not Responsible for Recitals or Issuance of
Guarantee.
The recitals contained in this Guarantee shall be taken
as the statements of the Guarantor, and the Capital Guarantee
Trustee does not assume any responsibility for their correctness.
The Capital Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
Section 4.1. Capital Guarantee Trustee; Eligibility.
(a) There shall at all times be a Capital Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise
corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or
District of Columbia authority. If such
corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of
the supervising or examining authority referred to
above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of
such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the
Capital Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Capital Guarantee
Trustee and Guarantor shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.2. Appointment Removal and Resignation of Capital
Guarantee Trustees.
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee
may be appointed or removed without cause at any time by
the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor
Capital Guarantee Trustee has been appointed and
has accepted such appointment by written instrument
executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall
hold office until a Successor Capital Guarantee Trustee
shall have been appointed or until its removal or
resignation. The Capital Guarantee Trustee may resign
from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the
Capital Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor
Capital Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing
executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital
Guarantee Trustee.
(d) If no Successor Capital Guarantee Trustee shall have been
appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the
Guarantor of an instrument of resignation, the resigning
Capital Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor
Capital Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem
proper, appoint a Successor Capital Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim
that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to the Holders.
Section 5.2. Subordination.
If an Event of Default under the Indenture has occurred
and is continuing, the rights of holders of the Common Securities
to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders of Capital Securities to
receive Guarantee Payments.
Section 5.3. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and
demands.
Section 5.4. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums payable
under the terms of the Capital Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with,
the Capital Securities (other than an extension of time
for payment of Distributions, Redemption Price,
Liquidation Distribution or other sums payable that
results from the extension of any interest payment period
on the Notes or any extension of the maturity date of the
Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) invalidity of, or defect or deficiency in the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that
the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
Section 5.5. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
Capital Securities have the right to direct the time,
method and place of conducting of any proceeding for any
remedy available to the Capital Guarantee Trustee in
respect of this Guarantee Agreement or to direct the
exercise of any trust or power conferred upon the Capital
Guarantee Trustee under this Guarantee Agreement and the
Capital Guarantee Trustee shall be protected in acting in
accordance with such directions.
(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Issuer, the
Capital Guarantee Trustee or any other Person.
Section 5.6. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment
and not of collection.
Section 5.7. Subrogation.
The Guarantor shall be subrogated to all (if any) rights
of the Holders of Capital Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law)
be entitled to enforce or exercise any right that it may acquire by
way of subrogation or any indemnity reimbursement or other
agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due
and unpaid under this Guarantee Agreement. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
Section 5.8. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to
the Capital Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding
the occurrence of any event referred to in subsections (a) through
(g), inclusive, of Section 5.4 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions.
So long as any Capital Securities remain outstanding, if
there shall have occurred an Event of Default or an event of
default under the Declaration, then (a) the Guarantor shall not,
and shall cause any subsidiary of Guarantor that is not a wholly
owned subsidiary of Guarantor not to, declare or pay any dividend
on, or make any distribution with respect to, or redeem, purchase
or acquire or make a liquidation payment with respect to, any of
its capital stock or the capital stock of any such subsidiary and
(b) the Guarantor shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Guarantor which
rank pari passu with or junior to the Notes, provided, that, the
foregoing restriction in this Section 6.1(a) shall not apply to any
stock dividends paid by Guarantor, or any of its subsidiaries,
where the dividend stock is the same stock as that on which the
dividend is being paid.
Section 6.2. Ranking.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the
Guarantor (other than the Common Securities Guarantee or any
guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the
Guarantor), (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
This Guarantee Agreement shall terminate and the
Guarantee will no longer be deemed to be outstanding upon (i) full
payment of the Redemption Price of all Capital Securities,
(ii) upon the distribution of the Notes to the Holders of all
Capital Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement
will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder of Capital Securities must
restore payment of any sums paid under the Capital Securities or
under this Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Guarantee Agreement and in a
manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an
Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the
Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by
or on behalf of the Guarantor, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders
of Capital Securities might properly be paid.
Section 8.2. Indemnification.
(a) To the fullest extent permitted by applicable law,
the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred
on such Indemnified Person by this Guarantee Agreement, except that
no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Guarantor prior to the final
disposition of such claim, demand, action, suit or proceeding upon
receipt by the Guarantor of any undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified
as authorized in Section 8.2(a). The provisions of this Section
8.2 shall survive termination of this Guarantee Agreement and
resignation or removal of the Capital Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit
of the Holders of the Capital Securities then outstanding.
Section 9.2. Amendments.
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of at least 66-2/3% in
liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are
determined) of all the outstanding Capital Securities. The
provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Trust Securities apply to the giving of
such approval.
Section 9.3. Notices.
All notices provided for in this Guarantee Agreement
shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or
certified mail as follows:
(a) If given to the Capital Guarantee Trustee, at the Capital
Guarantee Trustee's mailing address set forth below (or
such other address as the Capital Guarantee Trustee may
give notice of to the Holders of the Capital Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Telecopy No. (312) 407-1708
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the
Capital Securities):
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Telecopy No. (818) 775-3434
(c) If given to any Holder of Capital Securities, at
the address set forth in the books and records of
the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
Section 9.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a),
is not separately transferable from the Capital Securities.
Section 9.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee Agreement to be executed by their respective officers
thereunto duly authorized, as of the day and year first above
written.
GREAT WESTERN FINANCIAL CORPORATION
By: _______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Capital Guarantee Trustee
By: _______________________________
Name:
Title:
[LETTERHEAD OF O'MELVENY & MYERS]
January
31st
1 9 9 7
(213) 669-6000
330,955-138
LA1-733364.V1
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Re: Great Western Financial Trust II
Ladies and Gentlemen:
You have requested our opinion as to whether Great
Western Financial Trust II (the "Trust") will qualify as a
grantor trust for United States federal income tax purposes as of
the date the Trust is formed. The Trust will be a business trust
formed in accordance with the provisions of the Delaware Code,
title 12, chapter 38.
In connection with rendering this opinion, we have
examined the Amended and Restated Declaration of Trust dated as
of January 22, 1997 (the "Declaration"), the Indenture dated as
of September 12, 1990, as amended and supplemented, between Great
Western Financial Corporation (the "Company") and Harris Trust
and Savings Bank, as the Indenture Trustee (the "Indenture
Trustee"), the Third Supplemental Indenture dated as of
January 22, 1997 between the Company and the Indenture Trustee,
and such other documents as we have deemed necessary or
appropriate for purposes of this opinion. For purposes of such
examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, and the authenticity of
all documents submitted to us as relevant to this opinion and, as
to matters of fact, we have relied upon the agreements,
instruments, certificates and documents referred to above. We
have assumed that all parties have the corporate power and
authority to enter into and perform all obligations thereunder,
and we have also assumed the due authorization by all requisite
corporate actions, the due execution and delivery and the
validity, binding effect and enforceability of such documents.
The facts as we understand them and on which this
opinion is based are as follows:
The Company will issue subordinated debt securities
(the "Subordinated Debt Securities"), which will be held by the
Trust. The Trust will initially have four trustees (the
"Trustees"), three of whom will be persons employed by or
affiliated with the Company. The fourth Trustee will be First
Chicago Delaware Inc., a Delaware corporation. The Declaration
will authorize the Trustees to have the Trust issue capital
securities (the "Capital Securities") and common securities (the
"Common Securities" and together with the Capital Securities, the
"Securities") representing beneficial undivided interests in the
Trust. All of the Common Securities will be held by the Company.
The Declaration will not permit the issuance by the Trust of any
securities or other beneficial interests other than the
Securities. Pursuant to the Declaration, The First National Bank
of Chicago (the "Property Trustee"), who will not be a Trustee,
will be appointed to hold the Subordinated Debt Securities owned
by the Trust for the benefit of the holders of the Securities.
The Property Trustee will also receive all interest and principal
paid in respect of the Subordinated Debt Securities and will
maintain such funds in a segregated account pending distribution
of such funds to the holders of the Securities.
Holders of the Securities will be entitled to receive
cumulative cash distributions (the "Distributions") at a
specified annual rate of the liquidation preference of $1000 per
Security, accruing from the date of original issuance and payable
semi-annually in arrears on February 1 and August 1 of each year
commencing August 1, 1997. The timing and rate of payments on
the Securities and the total outstanding liquidation preference
of the Securities shall be identical to, respectively, the timing
and rate of payments on and total outstanding principal amount of
the Subordinated Debt Securities. The Capital Securities will
rank pari passu with the Common Securities, except that in the
event of a default under the Declaration the rights of the
holders of the Common Securities to payments of Distributions and
to payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital
Securities. In addition, in the event that the Trust does not
have sufficient funds to pay Distributions to the holders of the
Capital Securities, such holders will be entitled to bring legal
action to compel the Property Trustee to enforce the rights of
the Trust under the indenture executed in connection with the
issuance of the Subordinated Debt Securities (the "Indenture").
The Subordinated Debt Securities will have a maturity
of up to 30 years. The Company may defer interest payments on
the Subordinated Debt Securities for up to 10 consecutive semi-
annual periods, at which time all deferred interest would be
payable. The Subordinated Debt Securities will be rated
investment grade.
Under Treasury Regulation Section 301.7701-4, in order
for a trust to be classified as a fixed investment trust rather
than as an association taxable as a corporation or as a
partnership, there must be no power, on the part of the trustee
or any other person, to vary the investment of the holders of
interests in the trust in order to take advantage of market
fluctuations. Furthermore, the trust cannot have multiple
classes of ownership, unless the trust is formed for purposes of
facilitating direct investment in the trust assets and the
existence of multiple classes is merely incidental to such
purposes.
The Declaration prohibits the Trustees from causing the
Trust to acquire any assets other than the Subordinated Debt
Securities. In particular, neither the Trustees nor the Trust
may vary the assets of the Trust or the terms of the Securities.
In addition, payments of interest and principal received with
respect to the Subordinated Debt Securities may not be invested,
but rather must be distributed to the holders of the Securities.
Furthermore, as stated and with the exception noted above, the
Capital Securities will rank pari passu with the Common
Securities.
Based on the foregoing, and assuming compliance with
the provisions of the Declaration, it is our opinion that the
Trust will be treated as a grantor trust under subpart E, part I
of subchapter J of the Internal Revenue Code for United States
federal income tax purposes rather than as an association taxable
as a corporation or as a partnership and, accordingly, each
beneficial owner of a Capital Security will be treated for United
States federal income tax purposes as the owner of an undivided
interest in the Subordinated Debt Securities held by the Trust.
We consent to the inclusion of this opinion in the
Current Report on Form 8-K dated January 31, 1997 which is
incorporated by reference in the Registration Statement on Form
S-3, File No. 333-19711, as amended by Amendment No. 1 filed by
the Company and the Trust with the Securities and Exchange
Commission on January 13, 1997 and January 21, 1997,
respectively, the Prospectus dated January 21, 1997 and the
Prospectus Supplement dated January 22, 1997 relating to the
registration of the Capital Securities.
Respectfully submitted,
/s/ O'MELVENY & MYERS
