-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RghwEA3RJLNiHVrcewuwQEuCMmsn5ZG5d8O2PZTCuYWBjlwY0G4KnXwuh10GwRE3 oSJoUNghrI3gNmr++h5QNw== 0000898430-95-002624.txt : 19951215 0000898430-95-002624.hdr.sgml : 19951215 ACCESSION NUMBER: 0000898430-95-002624 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19951206 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951214 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT WESTERN FINANCIAL CORP CENTRAL INDEX KEY: 0000043512 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 951913457 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04075 FILM NUMBER: 95601474 BUSINESS ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187753411 MAIL ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 8-K 1 FORM 8-K DATED 12/06/95 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): December 6, 1995 GREAT WESTERN FINANCIAL CORPORATION ----------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-4075 95-1913457 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 9200 Oakdale Avenue, Chatsworth, California 91311 - -------------------------------------------------------------------------------- (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. Item 7 Financial Statements and Exhibits --------------------------------- 1. Purchase Agreement, dated December 6, 1995, among Great Western Financial Corporation (the "Company"), Great Western Financial Trust I (the "Trust") and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Bear Stearns & Co. Inc., Dean Witter Reynolds Inc. and Smith Barney Inc., as Representatives of the several Underwriters, relating to the 8-1/4% Trust Originated Preferred Securities of the Trust. 3. Certificate of Designation of Rights and Preferences of the 8- 1/4% Cumulative Preferred Stock of the Company, dated December 6, 1995. 4.1 Second Supplemental Indenture, dated as of December 6, 1995, to Indenture, dated as of September 12, 1990, as amended, between (the Company and Harris Trust and Savings Bank, relating to the 8-1/4% Subordinated Deferrable Interest Notes Due 2025 of the Company. 4.2 Amended and Restated Declaration of Trust of the Trust, dated December 6, 1995. 4.3 Form of 8-1/4% Trust Originated Preferred Securities of the Trust (attached as Annex 1 to Exhibit A to the Amended and Restated Declaration of Trust included herein as Exhibit 4.2) (the "Preferred Securities"). 4.4 Preferred Securities Guarantee Agreement, dated as of December 6, 1995, between the Company and The First National Bank of Chicago, as Property Trustee. 5. Opinion of Skadden, Arps, Slate, Meagher & Flom as to the validity of the Preferred Securities. 8. Opinion of Skadden, Arps, Slate, Meagher & Flom as to certain federal tax matters relating to the Preferred Securities. 23.1 Consents of Skadden, Arps, Slate, Meagher & Flom (included in Exhibits 5 and 8 hereto). 2 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/ J. Lance Erikson By: J. Lance Erikson Executive Vice President DATED: December 14, 1995 3 EX-1 2 PURCHASE AGREEMENT DATED 12/06/95 EXHIBIT 1 EXECUTION COPY 4,000,000 PREFERRED SECURITIES GREAT WESTERN FINANCIAL TRUST I (A DELAWARE TRUST) 8 1/4 % TRUST ORIGINATED PREFERRED SECURITIES ("TOPRS")(SM) (LIQUIDATION AMOUNT OF $25 PER PREFERRED SECURITY) PURCHASE AGREEMENT ------------------ December 6, 1995 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated GOLDMAN, SACHS & CO. BEAR, STEARNS & CO. INC. DEAN WITTER REYNOLDS INC. SMITH BARNEY INC. as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281 Ladies and Gentlemen: Great Western Financial Trust I (the "Trust"), a statutory business trust organized under the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq.) and Great Western Financial Corporation, a Delaware corporation (the "Company" and, together with the Trust, the "Offerors") confirm their agreement (the "Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Goldman, Sachs & Co., Bear, Stearns & Co. Inc., Dean Witter Reynolds Inc. and Smith Barney Inc., and each of the other Underwriters named in Schedule A hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom you are acting as representatives (in such capacity, you shall hereinafter be referred to as the "Representatives"), with ___________________ (SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of Merrill Lynch & Co., Inc. respect to the sale by the Trust and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of 8 1/4% Trust Originated Preferred Securities (liquidation amount of $25 per preferred security) of the Trust (the "Preferred Securities") set forth in Schedule A hereto. The Preferred Securities will be guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred Securities Guarantee Agreement (the "Preferred Securities Guarantee Agreement"), dated as of December 6, 1995, between the Company and The First National Bank of Chicago ("First Chicago"), as trustee (the "Guarantee Trustee"), and entitled to the benefits of certain backup undertakings described in the Prospectus (as defined herein) with respect to the Company's agreement pursuant to the Supplemental Indenture (as defined herein) to pay all expenses relating to administration of the Trust. Upon the occurrence, if any, of a "Regulatory Event" as defined in the Prospectus, at the option of the Company the Adjusted Subordinated Notes (as defined below) will be converted into the depositary shares (the "Depositary Shares") representing interests in the Company Preferred Stock (as defined below), unless prior to such conversion the holder of a Preferred Security elects not to convert such holder's Adjusted Subordinated Notes, in which event such holder will instead be entitled to receive the Adjusted Subordinated Notes. Each Depositary Share, if any, will represent a one-tenth interest in a share of the Company's 8 1/4% Cumulative Preferred Stock, par value $1.00 per share, liquidation value, $250 per share (the "Company Preferred Stock"). The Depositary Shares, if any, will be evidenced by Depositary Receipts (the "Depositary Receipts") to be issued pursuant to a Deposit Agreement (the "Deposit Agreement") among the Company, the depositary to be named therein (the "Depositary") and the holders from time to time of the Depositary Receipts issued thereunder. The Offerors have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 33-63057) for the registration under the Securities Act of 1933, as amended (the "1933 Act"), of certain securities, including (i) the Preferred Securities, (ii) the Preferred Securities Guarantee, (iii) the Company Preferred Stock, (iv) the Depositary Shares, and (v) debt securities of the Company, including the 8 1/4% Subordinated Deferrable Interest Notes (such Subordinated Deferrable Interest Notes, including the Adjusted Subordinated Notes bearing an interest rate of 7 3/4% per annum (the "Adjusted Subordinated Notes"), herein, unless the context otherwise requires, collectively, the "Subordinated Notes") to be issued and sold to the Trust by the Company (the securities set forth in the foregoing clauses (i) to (v) inclusive, collectively, the "Registered Securities") and the offering 2 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 all documents incorporated or deemed to be incorporated by reference therein 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 prospectus supplement dated the date hereof (the "Prospectus Supplement") relating to the Preferred Securities and the prospectus dated December 1, 1995 (the "Base Prospectus") relating to the Registered Securities, and has 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 Preferred 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. 3 The Offerors understand that the Underwriters propose to make a public offering of the Preferred Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered. The entire proceeds from the sale of the Preferred Securities will be combined with the entire proceeds from the sale by the Trust to the Company of its common securities (the "Common Securities"), as guaranteed by the Company, to the extent set forth in the Prospectus, with respect to distributions and payments upon liquidation and redemption (the "Common Securities Guarantee" and together with the Preferred Securities Guarantee, the "Guarantees") pursuant to the Common Securities Guarantee Agreement (the "Common Securities Guarantee Agreement" and, together with the Preferred Securities Guarantee Agreement, the "Guarantee Agreements"), and will be used by the Trust to purchase the Subordinated Notes issued by the Company. The Preferred Securities and the Common Securities will be issued pursuant to the amended and restated declaration of trust of the Trust, dated as of December 6, 1995 (the "Declaration"), among the Company, as Sponsor, J. Lance Erikson, Carl F. Geuther and Bruce F. Antenberg (the "Regular Trustees"), First Chicago, as property trustee (the "Property Trustee"), and Michael J. Majchrzak, as Delaware trustee (the "Delaware Trustee," and together with the Regular 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 the First Supplemental Indenture dated as of April 30, 1993 (together, the "Base Indenture"), between the Company and Harris Trust and Savings Bank, as trustee (the "Indenture Trustee"), and a supplement to the Base Indenture, dated as of December 6, 1995 (the "Supplemental Indenture," and together with the Base Indenture and any other amendments or supplements thereto, the "Indenture"), between the Company and the Indenture Trustee. SECTION 1. Representations and Warranties. ------------------------------ (a) The Offerors jointly and severally represent and warrant to each Underwriter as of the date hereof as follows: (i) 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 4 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 Preferred 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 Closing Time, 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"). (ii) 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"). (iii) Since the respective dates as of which information is given in the Prospectus, except for regular quarterly dividends on the Company's Common Stock, par value $1.00 per share (the "Common Stock"), and regular quarterly dividends on the Company's 8 3/4% Cumulative Convertible Preferred Stock, par value $1.00 per share (the "Convertible Preferred Stock") and the Company's 8.30% Cumulative Preferred Stock, par value $1.00 per share, (the "Cumulative Preferred Stock"), there has been no dividend or distribu- 5 tion of any kind declared, paid or made by the Offerors on any class of their capital stock. (iv) 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 Convertible Preferred Stock and 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 Depositary Receipts, if any, when executed and delivered pursuant to the Deposit Agreement, will be validly issued and will entitle the persons in whose names the Depositary Shares represented by such Depositary Receipts are registered to the rights specified in the Deposit Agreement; the Preferred Securities, the Common Securities, the Subordinated Notes, the Guarantees, the Company Preferred Stock, the Depositary Shares and the Depositary Receipts conform to all statements relating thereto contained in the Prospectus; and the issuance of the Preferred Securities and the Guarantees is not subject to any preemptive or other similar rights. (v) The Trust has been duly created and is validly existing and in good standing as a business trust under the Delaware Act with the power and authority to own property and to conduct its business as described in the Registration Statement and Prospectus and to enter into and perform its obligations under this Agreement, the Preferred 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. (vi) 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) 6 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 Closing Time, 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. (vii) The Declaration has been duly authorized by the Company and, at the Closing Time, 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 Closing Time, 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 Closing Time, the Declaration will have been duly qualified under the 1939 Act. (viii) Each of the Guarantee Agreements has been duly authorized by the Company (no stockholder action being required) and, when validly executed and delivered by the Company and, with respect to the Preferred Securities Guarantee Agreement, assuming due authorization, execution and delivery thereof by the Guarantee Trustee, each Guarantee Agreement 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 Preferred Securities Guarantee Agreement, at the Closing Time, will have been duly qualified under the 1939 Act. (ix) The Preferred 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 7 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 Preferred Securities will be entitled to the same limitation of personal liability under Delaware law as extended to stockholders of private corporations for profit. (x) The Indenture has been duly authorized by the Company (no stockholder action being required) and, when the Supplemental Indenture is validly executed and delivered by the Company, the 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 at the Closing Time, the Indenture will have been duly qualified under the 1939 Act. (xi) The Subordinated Notes have been duly authorized by the Company (no stockholder action being required) and, at the Closing Time, will have been duly executed by the Company; the Subordinated Notes, when authenticated in the manner provided for in the 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 Indenture. (xii) The Company's obligations under the Guarantees are subordinate and junior in right of payment to all liabilities of the Company and are, and for so long as the Preferred Securities are outstanding, will be, pari passu with the most senior preferred stock issued by the Company. (xiii) The Subordinated Notes are subordinate and junior in right of payment to all "Senior Indebtedness" (as defined in the Indenture) of the Company. (xiv) 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. (xv) 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"). 8 (xvi) The shares of Company Preferred Stock issuable by the Company upon conversion of the Adjusted Subordinated Notes have been duly and validly authorized and reserved for issuance upon such conversion by all necessary corporate action (no stockholder action being required) and such shares, when issued upon such conversion, will be duly and validly issued and will be fully paid and non-assessable, and the issuance of such shares upon such conversion will not be subject to any preemptive or other similar rights. (xvii) 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. (xviii) 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 Preferred Securities and the sale of any other of the Registered Securities to be issued prior to the delivery of the Preferred 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. (xix) 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. (xx) Each of the Offerors is in compliance with all provisions of Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of Doing Business with Cuba. 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 9 warranty by the Company or the Trust, as applicable, to each Underwriter as to the matters covered thereby. SECTION 2. Sale and Delivery to Underwriters; Closing. ------------------------------------------ (a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Trust agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Trust, at the price per Preferred Security of $25.00, the number of Preferred Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Preferred Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Payment of the purchase price for, and delivery of the certificates evidencing, the Preferred Securities to be purchased by the Underwriters shall be made at the office of O'Melveny & Myers, 400 South Hope Street, Los Angeles, California 90071, or at such other place as shall be agreed upon by the Representatives and the Offerors, at 7:00 a.m., Los Angeles time, on December 11, 1995 (unless postponed in accordance with the provisions of Section 10 hereof), or at such other time as shall be agreed upon by the Representatives and the Offerors (such time and date being herein called "Closing Time"). Payment shall be made to the Trust by certified or official bank check or checks in next day funds payable to the order of the Trust against delivery to the Representatives for the respective accounts of the Underwriters of the certificates for the Preferred Securities purchased by them. Certificates for the Preferred Securities shall be in such denominations and registered in such names as the Representatives may request in writing at least one business day prior to Closing Time. It is understood that each Underwriter has authorized the Representatives, for their respective accounts, to accept delivery of, receipt for, and make payment of the purchase price for, the Preferred Securities which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Preferred Securities to be purchased by any Underwriter whose check has not been received by Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder. The certificates for the Preferred Securities will be made available for examination and packaging by the Representatives on or before 10:00 a.m. New York City time on the last business day prior to Closing Time. 10 (c) In view of the fact that the proceeds of the sale of the Preferred Securities will be invested by the Trust in the Subordinated Notes, the Company hereby agrees to pay the several Underwriters as compensation (the "Underwriters' Compensation") for their arranging for the investment therein of such proceeds, $.7875 per Preferred Security ($3,150,000 in the aggregate); provided, however, that the compensation per Preferred Security for sales of 10,000 or more Preferred Securities to a single purchaser shall be $.50. Such Underwriters' Compensation shall be payable to the Underwriters by wire transfer of immediately available funds to Merrill Lynch or to its order at the Closing Time. SECTION 3. Covenants of the Offerors. Each of the Offerors jointly and ------------------------- severally covenants with each Underwriter as follows: (a) Promptly following the execution of this Agreement, the Offerors will complete and deliver to the Underwriters a Prospectus setting forth the number of Preferred Securities covered thereby, the names of the Underwriters and the number of Preferred Securities which each severally has agreed to purchase, the initial public offering price, the Underwriters' Compensation, the selling concession and reallowances, if any, and such other information as the Representatives and the Offerors deem appropriate in connection with the offering of the Preferred Securities. The Offerors will promptly transmit copies of the Prospectus to the Commission for filing pursuant to Rule 424 of the 1933 Act Regulations and will furnish to the Underwriters as many copies of the Prospectus as the Representatives shall reasonably request. If required by Rule 430A of the 1933 Act Regulations, the Offerors will prepare and file or transmit for filing a post-effective amendment to the Registration Statement (including an amended Prospectus). (b) The Offerors will notify the Representatives immediately, and confirm the notice in writing, (i) of the effectiveness of any post-effective amendment to the Registration Statement, (ii) of the mailing or the delivery to the Commission for filing of the Prospectus or any supplement to the Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the receipt of any comments from the Commission, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Offerors will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. 11 (c) The Offerors will give the Representatives notice of their intention to file or prepare any post-effective amendment to the Registration Statement or any amendment or supplement to the Prospectus, whether pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish the Representatives with copies of any such amendment or supplement or other document proposed to be filed a reasonable amount of time prior to such proposed filing and will not file any such amendment or supplement or other document or use any such prospectus to which the Representatives or counsel to the Underwriters shall reasonably object. (d) The Company will deliver to each Underwriter a copy of each document incorporated by reference in the Prospectus. (e) The Offerors will deliver to the Representatives a signed copy of the registration statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein) and will also deliver to the Representatives as many conformed copies of the Registration Statement and of each amendment thereto as the Representatives may reasonably request. (f) If any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel to the Underwriters, to amend or supplement the Prospectus in order to make the Prospectus not misleading in the light of circumstances existing at the time it is delivered to a purchaser, the Offerors will forthwith amend or supplement the Prospectus (in form and substance reasonably satisfactory to such counsel), whether by filing documents pursuant to the 1934 Act or otherwise, so that, as so amended or supplemented, the Prospectus 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 existing at the time it is delivered to a purchaser, not misleading, and the Offerors will furnish to the Underwriters a reasonable number of copies of such amendment or supplement. (g) The Offerors will endeavor, in cooperation with the Underwriters, to qualify the Preferred Securities, the Subordinated Notes and the Depositary Shares for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Representatives may designate; provided, however, that neither of the Offerors shall be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Preferred Securities, the Subordinated Notes and the Depositary Shares have been so qualified, the Offerors will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in 12 effect for as long as may be required for the distribution of the Preferred Securities or, in the case of such Subordinated Notes and Depositary Shares, for as long as such Subordinated Notes and Depositary Shares are issuable as contemplated by the Prospectus. The Offerors will promptly advise the Representatives of the receipt by either of the Offerors of any notification with respect to the suspension of the qualification of the Preferred Securities, the Subordinated Notes or the Depositary Shares for sale or issuance, as the case may be, in any such state or jurisdiction or the initiating or threatening of any proceeding for such purpose. (h) The Company will, on behalf of the Trust, make generally available to the Trust's security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month period beginning not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in said Rule 158) of the Registration Statement. (i) The Offerors will use their best efforts to effect the listing of the Preferred Securities on the New York Stock Exchange; if the Preferred Securities are exchanged for either or both of the Subordinated Notes and/or the Depositary Shares, the Company will use its reasonable efforts to effect the listing of the such securities on the exchange on which the Preferred Securities were then listed. (j) The Offerors, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file promptly all documents required to be filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. (k) The Offerors will use the net proceeds received in connection with the sale of the Preferred Securities in the manner specified in the Prospectus under "Use of Proceeds". (l) During the period beginning the date hereof and continuing for 30 days from such date, neither the Trust nor the Company will, without the prior written consent of the Representatives, directly or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any Preferred Securities, any equity securities substantially similar to the Preferred Securities, Subordinated Notes or any debt securities substantially similar to the Subordinated Notes, or any securities convertible into, exchangeable into or exercisable 13 for Preferred Securities, any equity securities substantially similar to the Preferred Securities, Subordinated Notes or any debt securities substantially similar to the Subordinated Notes (except for the Subordinated Notes and the Preferred Securities offered by the Prospectus). SECTION 4. Payment of Expenses. The Company will pay all expenses ------------------- incident to the performance of the obligations of the Offerors under this Agreement, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the preparation, issuance and delivery of the certificates for the Preferred Securities, (iii) the fees and disbursements of the Company's and the Trust's counsel (except, other than as set forth in the next succeeding paragraph, the fees and expenses of special counsel to the Trust, Skadden, Arps, Slate, Meagher & Flom) and accountants, (iv) the qualification of the Preferred Securities, the Subordinated Notes and the Depositary Shares under securities laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey, (v) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and all amendments thereto, of each preliminary prospectus, and of the Prospectus and any amendments or supplements thereto, (vi) the reproduction and delivery to the Underwriters of copies of the Blue Sky Survey, (vii) the fees and expenses of the Indenture Trustee, including the fees and disbursements of counsel for the Indenture Trustee in connection with the Indenture, (viii) the fees and expenses of the Property Trustee, including the fees and disbursements of counsel for the Property Trustee in connection with the Declaration and the certificate of trust of the Trust, dated September 27, 1995 (the "Certificate of Trust"), (ix) the fee of the National Association of Securities Dealers, Inc., (x) any fees in connection with the rating of the Preferred Securities, and if applicable, the Subordinated Notes and the Depositary Shares, and (xi) the fees and expenses incurred in connection with the listing on the New York Stock Exchange of the Preferred Securities (and the related Preferred Guarantee), and if applicable, the Subordinated Notes and the Depositary Shares, (xii) the cost and charges of any transfer agent or registrar, and (xiii) the cost of qualifying the Preferred Securities, and if applicable, the Subordinated Notes and the Depositary Shares, with The Depository Trust Company. If this Agreement is cancelled or terminated by the Representatives in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their reasonable out-of- pocket expenses, 14 including the reasonable fees and disbursements of counsel for the Underwriters and special counsel for the Trust. SECTION 5. Conditions of Underwriters' Obligations. The several --------------------------------------- obligations of the Underwriters to purchase the Preferred Securities pursuant to this Agreement are subject to the accuracy of the representations and warranties of the Offerors herein contained, to the accuracy of the statements of the Company's officers or the Trust's Trustees, as the case may be, made in any certificate furnished pursuant to the provisions hereof, to the performance by the Offerors of all of their respective covenants and other obligations hereunder, and to the following further conditions: (a) The Registration Statement shall be effective as of the time of execution of this Agreement; and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) no later than the second business day following the date hereof or transmitted by a means reasonably calculated to result in filing with the Commission by that date or by such later date as shall have been consented to by the Representatives. (b) At Closing Time, you shall have received: (1) The favorable opinion, dated as of Closing Time, of Stephen F. Adams, Esq., Associate General Counsel of the Company (or such other counsel satisfactory to the Representatives) 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 Guarantees by the Company and the issuance and sale of the Preferred Securities by the Trust pursuant to the terms of this Agreement and the execution and delivery of this Agreement, the Declaration, the Preferred Securities, the Common Securities, the Indenture, the Subordinated Notes, the Guarantee Agreements and the Deposit Agreement, the issuance of the Company Preferred Stock, the 15 issuance of the Deposit Receipts pursuant to the Deposit Agreement, and the conversion of the Adjusted Subordinated Notes into the Depositary Shares, 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 16 responsible officers of the Company and its subsidiaries, as applicable, and public officials. (2) The favorable opinion, dated as of Closing Time, of O'Melveny & Myers, counsel for the Company (or such other counsel satisfactory to the Representatives), 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 Indenture, to issue the Subordinated Notes, the Guarantees, the Company Preferred Stock, and the Deposit Receipts pursuant to the Deposit Agreement, and to convert the Adjusted Subordinated Notes into the Depositary Shares. (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 Guarantees by the Company and the issuance and sale of the Preferred Securities by the Trust pursuant to the terms of this Agreement and the execution and delivery of this Agreement, the Declaration, the Preferred Securities, the Common Securities, the Indenture, the Subordinated Notes, the Guarantee Agreements and the Deposit Agreement, the issuance of the Company Preferred Stock, the issuance of the Deposit Receipts pursuant to the Deposit Agreement, and the conversion of the Adjusted Subordinated Notes into the 17 Depositary Shares, 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) Each of the Guarantee Agreements has been duly authorized by all necessary corporate action on the part of the Company, has been duly executed and (assuming, with respect to the Preferred Securities Guarantee Agreement, due authorization, execution and delivery thereof by the Guarantee Trustee) delivered by the Company, and each of the Guarantee Agreements 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 Preferred Securities Guarantee Agreement has been duly qualified under the 1939 Act. (x) The 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 Indenture has been duly qualified under the 1939 Act. (xi) The Subordinated Notes are in the form contemplated by the 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 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. 18 (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) Neither the Company nor the Trust is an "investment company" or "controlled" by an "investment company" within the meaning of the 1940 Act. (xiv) The shares of Company Preferred Stock issuable upon conversion of the Adjusted Subordinated Notes have been duly authorized and reserved for issuance upon such conversion by all necessary corporate action and, when issued upon such conversion, will be validly issued, fully paid and non-assessable, and the issuance of such shares will not be subject to any preemptive rights arising by operation of law or under the Certificate of Incorporation or bylaws of the Company. (xv) 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. (xvi) 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 Indenture, the Guarantee Agreements or the Deposit Agreement, the offering of the Guarantees, the issuance and delivery of the Subordinated Notes or the Company Preferred Stock, the issuance of the Deposit Receipts pursuant to the Deposit Agreement, nor the issuance and sale of the Preferred 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. 19 (xvii) Assuming the due execution and delivery of the Depositary Receipts by or on behalf of the Depositary against the deposit of the Company Preferred Stock pursuant to the Deposit Agreement, the persons in whose names the Depositary Shares represented by such Depositary Receipts are registered will be entitled to the rights specified in the Deposit Agreement. (xviii) 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. (xix) 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 rules and 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. (xx) 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. (xxi) 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 Offered Preferred Securities" (except under the sub-caption "Book-Entry Only Issuance--The Depository Trust Company"), "Description of the Subordinated Notes," "Effect of Obligations Under the Subordinated Notes and the Guarantee," "Description of Depositary Shares" and "Description of Cumulative Preferred Stock" insofar as it purports to summarize matters of California, New York or federal law applicable to the Offerors or the provisions of the debt securities, capital stock and securities warrants of the 20 Company and the Preferred Securities, the Subordinated Notes, the Company Preferred Stock, the Guarantee Agreements, the Depositary Shares and the Depositary Receipts, is correct in all material respects. 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. (3) The opinion, dated as of Closing Time, of Skadden, Arps, Slate, Meagher & Flom, special Delaware counsel for the Trust and special tax counsel for the Company and the Trust, shall be rendered in form and substance satisfactory to counsel for the Underwriters to the extent set forth below. To the extent used herein, (a) "Applicable Law" shall mean only the Delaware 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 Preferred 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 action on the part of the Trust and do not and will not result in any violation of (i) 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 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 Act and the Declaration, the Trust has all necessary power and authority to own property and to 21 conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement, the Preferred 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 Act or the Declaration. (iv) The Preferred Securities have been duly authorized for issuance and, subject to the qualifications set forth below, when issued, delivered and paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; the holders of the Preferred 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 Preferred Securities is not subject to preemptive or other similar rights under the Delaware Act or the Declaration. Such counsel may bring to the attention of the Underwriters that the Preferred Securities holders 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 Preferred Securities and the issuance of replacement Preferred 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 Preferred Securities, the Subordinated Notes, or the Guarantees, except for such approvals as may be required under the state securities 22 (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 Preferred Securities" (except under the sub-caption "Book-Entry Only Issuance--The Depository Trust Company"), insofar as they constitute summaries of Delaware law (or the documents therein described), or legal conclusions, have been reviewed by them and are, in all material respects, accurate summaries of such provisions. (viii) This Agreement has been duly authorized, executed and delivered by the Trust. (ix) 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 Preferred 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 Preferred Securities under current law. 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. (4) The favorable opinion, dated as of Closing Time, of the Law Department of First Chicago, as Property Trustee under the Declaration, and Guarantee Trustee under the Preferred Securities Guarantee Agreement, 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 of America with all necessary power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Declaration and the Preferred Securities Guarantee Agreement. 23 (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 Preferred Securities Guarantee Agreement have been duly authorized by all necessary corporate action on the part of the Property Trustee and the Guarantee Trustee, respectively. The Declaration and the Preferred Securities Guarantee Agreement have been duly executed and delivered by the Property Trustee and the Guarantee Trustee, respectively, and constitute the legal, valid and binding obligations 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 Preferred Securities Guarantee Agreement by the Property Trustee and the Guarantee Trustee, respectively, does not conflict with or constitute a breach of the Articles of Organization or Bylaws of the Property Trustee and the Guarantee Trustee, respectively. (iv) No consent, approval or authorization of, or registration with or notice to, any federal banking authority is required for the execution, delivery or performance by the Property Trustee and the Guarantee Trustee of the Declaration and the Preferred Securities Guarantee Agreement. (5) The favorable opinion, dated as of Closing Time, of Brown & Wood, counsel for the Underwriters, in form and substance satisfactory to the Representatives, with respect to the legal existence of the Company and the Trust and with respect to the Preferred Securities, the Subordinated Notes, the Indenture, the Preferred Securities Guarantee Agreement, this Agreement, the Registration Statement, the Prospectus and such other related matters as the Representatives may require. In rendering such opinion, such counsel may rely as to certain matters involving the application of the General Corporation Law of the State of Delaware as to the Trust, to the extent deemed proper and specified in such opinion, upon the opinion of Skadden, Arps, Slate, Meagher & Flom, special counsel to the Trust, which opinion shall be delivered pursuant to Section 5(b)(3) hereof. (6) In giving their opinions required by subsections, (b)(2) and (b)(5), respectively, of this Section, O'Melveny & Myers and Brown & Wood shall each additionally state that in 24 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 responsibility 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 (xxi) of Subsection (b)(2) 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 Closing Time, 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 and other financial or statistical data or information 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. (c) At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, any material adverse change or any development involving a prospective material adverse change not otherwise disclosed or contemplated by the Prospectus 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 the Representatives shall have received with respect to the Company, a certificate of the Chairman of the Board or the President or a Senior Vice President or a First Vice President of the Company and of the Treasurer or 25 chief financial or chief accounting officer of the Company and with respect to the Trust, a certificate of two Regular Trustees of the Trust, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 are true and correct in all material respects at and as of Closing Time with the same effect as if made at and as of Closing Time, (iii) the Trust or the Company, as applicable, in all material respects, has performed all its obligations and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or, to their knowledge, proceedings therefor initiated or threatened by the Commission. (d) At the time of the execution of this Agreement and at Closing Time, Price Waterhouse shall have furnished to the Representatives a letter or letters, dated such date, in form and substance satisfactory to the Representatives, 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. (e) At Closing Time, the Preferred Securities shall have been rated at least BBB- by Standard and Poor's Ratings Group ("Standard & Poor's") and Baa2 by Moody's Investors Service Inc. ("Moody's") as evidenced by letters from such rating agencies; and there shall not have occurred any decrease in the ratings of any of the securities of the Company by Standard & Poor's or Moody's or any other nationally recognized statistical rating organization and neither Standard & Poor's nor Moody's nor any other nationally recognized statistical rating organization shall have publicly announced that it has placed any securities of the Company on what is commonly termed a "watch list" for possible downgrading. (f) At Closing Time all proceedings taken by the Company in connection with the issuance and sale of the Preferred Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters. (g) The Underwriters shall have received a certificate of two Regular Trustees of the Trust, dated as of the Closing Time, to the effect that (i) the Trust is not a party to or otherwise bound by any agreement other than those attached to such certificate and (ii) the Trust is not subject to any judgment, order or decree of any government, governmental instrumentality 26 or court, domestic or foreign, or any regulatory body or administrative agency or other governmental body having jurisdiction over the Trust or any of its properties. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof. SECTION 6. Indemnification. --------------- (a) Each of the Offerors agrees to jointly and severally indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement 27 or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, - -------- ------- liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Trust or the Company by any Underwriter through the Representatives expressly for use in the Prospectus (or any amendment or supplement thereto); and provided, further, that the foregoing indemnity with respect to any untrue statement contained in or omission from a preliminary prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, liability, claim, damage or expense purchased the Preferred Securities which are the subject thereof if a copy of the Prospectus (or the Prospectus as then amended or supplemented if the Trust or the Company shall have furnished any amendments or supplements thereto), excluding documents incorporated therein by reference, was not sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale of such Preferred Securities to such person in any case where such delivery is required by the 1933 Act, such untrue statement contained in or omission from such preliminary prospectus was corrected in the Prospectus (or the Prospectus as so amended or supplemented) and the Company or the Trust had previously furnished copies of such corrected Prospectus to the Underwriters. (b) The Company agrees to indemnify and hold harmless the Trust against any claim, damage and expense whatsoever, as due from the Trust under Section 6(a) hereunder. (c) Each Underwriter severally agrees to indemnify and hold harmless the Offerors, each of their directors or Trustees and each of their officers or Trustees, as the case may be, who signed the Registration Statement, and each person, if any, who controls the Offerors within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Offerors by such Underwriter through the Representatives expressly for use in the Prospectus (or any amendment or supplement thereto). 28 (d) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of any such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. SECTION 7. Contribution. In order to provide for just and equitable ------------ contribution in circumstances in which the indemnity agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Offerors and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Offerors and one or more of the Underwriters, as incurred, in such proportions that the Underwriters are responsible for that portion represented by the percentage that the Underwriters' Compensation paid by the Company bears to the initial public offering price appearing on the cover page of the Prospectus and the Offerors are responsible for the balance; provided, however, that 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. For purposes of this Section, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, each Trustee of the Trust and each person, if any, who controls an Offeror within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Offerors. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. --------------------------------------------- ---------------- All representations, warranties and agreements contained in this Agreement or contained in certificates of executive officers or Trustees of the Offerors submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Offerors, and shall survive delivery of the Preferred Securities to the Underwriters. 29 SECTION 9. Termination of Agreement. ------------------------ (a) The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been since the date of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change not otherwise disclosed or contemplated by the Prospectus in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Trust or the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there shall have occurred any outbreak or escalation of hostilities or other national or international calamity or crisis the effect of which is to make it, in the judgment of the Representatives, impracticable to market the Preferred Securities or to enforce contracts for the sale of the Preferred Securities, or (iii) if trading in the Preferred Securities or the Common Stock shall have been suspended by the Commission or a national securities exchange, or if trading generally on the New York Stock Exchange shall have been suspended, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, by said Exchange or by order of the Commission or any other governmental authority, or if a general banking moratorium has been declared by either federal, New York or California authorities, or (iv) if there shall have occurred any decrease in the ratings of any of the securities of the Company or of the Preferred Securities by Standard & Poor's or Moody's or any other nationally recognized statistical rating organization or Standard & Poor's or Moody's or any other nationally recognized statistical rating organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the securities of the Company or the Preferred Securities. Notice of any such termination may be given to the Company by telegram, telecopy or telephone and shall be subsequently confirmed by letter. (b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party except as provided in Section 4. As used in this Section 9(a), the term "Prospectus" means the Prospectus in the form first used to confirm sales of the Preferred Securities. SECTION 10. Default by One or More of the Underwriters. If one or more of ------------------------------------------ the Underwriters shall fail at Closing Time to purchase the Preferred Securities which it or they are obligated to purchase hereunder (the "Defaulted Securities"), then the Representatives shall have the right, within 24 hours thereafter, 30 to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, during such 24 hours the Representatives shall not have completed such arrangements for the purchase of all of the Defaulted Securities, then: (a) if the number of Defaulted Securities does not exceed 10% of the number of Preferred Securities to be purchased pursuant to this Agreement, each of the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations bear to the underwriting obligations of all non- defaulting Underwriters, or (b) if the number of Defaulted Securities exceeds 10% of the number of Preferred Securities to be purchased pursuant to this Agreement, this Agreement shall terminate without liability on the part of any non- defaulting Underwriter. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default under this Agreement. In the event of any such default by any Underwriter or Underwriters as set forth in this Section, either the Representatives or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. SECTION 11. Notices. All notices and other communications hereunder shall ------- be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives c/o Merrill Lynch at the address set forth above; notices to the Offerors shall be directed to it at 9200 Oakdale Avenue, Chatsworth, California 91311, attention of Mr. Bruce F. Antenberg, Senior Vice President -- Finance. SECTION 12. Parties. This Agreement shall inure to the benefit of and be ------- binding upon the Underwriters, the Company, the Trust and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers, trustees and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any 31 legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Preferred Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. SECTION 14. Counterparts. This Agreement may be simultaneously ------------ executed in counterparts, each of which when so executed shall be deemed to be an original. Such counterparts shall together constitute one and the same instrument. 32 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Underwriters on the one hand, and the Company and the Trust on the other, in accordance with its terms. Very truly yours, GREAT WESTERN FINANCIAL CORPORATION By: /s/ J. Lance Erikson ------------------------------- Authorized Officer GREAT WESTERN FINANCIAL TRUST I By: /s/ J. Lance Erikson ------------------------------- Trustee By: /s/ Bruce F. Antenberg ------------------------------- Trustee Confirmed and Accepted, as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated GOLDMAN, SACHS & CO. BEAR, STEARNS & CO. INC. DEAN WITTER REYNOLDS INC. SMITH BARNEY INC. By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Frank V. McMahon ------------------------------------- Authorized Signature For themselves and as Representatives of the other Underwriters named in Schedule A hereto. 33 SCHEDULE A
Number of Preferred Name of Underwriter Securities ------------------- ---------- Merrill Lynch, Pierce, Fenner & Smith 475,000 Incorporated................... Goldman, Sachs & Co........................ 475,000 Bear, Stearns & Co. Inc.................... 475,000 Dean Witter Reynolds Inc................... 475,000 Smith Barney Inc........................... 475,000 Robert W. Baird & Co. Incorporated......... 50,000 Alex. Brown & Sons Incorporated............ 50,000 Dain Bosworth Incorporated................. 50,000 Dillon, Read & Co. Inc..................... 50,000 Donaldson, Lufkin & Jenrette Securities Corporation...................... 50,000 A.G. Edwards & Sons, Inc................... 50,000 EVEREN Securities, Inc..................... 50,000 Oppenheimer & Co., Inc..................... 50,000 PaineWebber Incorporated................... 50,000 Piper Jaffray Inc.......................... 50,000 Prudential Securities Incorporated......... 50,000 Raymond James & Associates, Inc............ 50,000 Tucker Anthony Incorporated................ 50,000 Advest, Inc................................ 25,000 J.C. Bradford & Co......................... 25,000 JW Charles Securities, Inc................. 25,000 Commerzbank Capital Markets Corporation.... 25,000 Cowen & Company............................ 25,000 Craigie Incorporated....................... 25,000 Crowell, Weedon & Co....................... 25,000 Davenport & Co. of Virginia, Inc........... 25,000 Doft & Co., Inc............................ 25,000 Dougherty, Dawkins, Strand & Bigelow Inc... 25,000 Fahnestock & Co. Inc....................... 25,000 First Albany Corporation................... 25,000 First of Michigan Corporation.............. 25,000 Furman Selz Incorporated................... 25,000 Gruntal & Co., Incorporated................ 25,000 J.J.B. Hillard, W.L. Lyons, Inc............ 25,000 Interstate/Johnson Lane Corporation........ 25,000 Janney Montgomery Scott Inc................ 25,000 Josephthal Lyon & Ross Incorporated........ 25,000 Legg Mason Wood Walker, Incorporated....... 25,000 McDonald & Company Securities, Inc......... 25,000 McGinn, Smith & Co., Inc................... 25,000 Mesirow Financial, Inc..................... 25,000
34 Morgan Keegan & Company, Inc............... 25,000 David A. Noyes & Company................... 25,000 The Ohio Company........................... 25,000 Principal Financial Securities, Inc........ 25,000 Pryor, McClendon, Counts & Co., Inc........ 25,000 Rauscher Pierce Refsnes, Inc............... 25,000 The Robinson-Humphrey Company, Inc......... 25,000 Rodman & Renshaw, Inc...................... 25,000 Roney & Co................................. 25,000 Scott & Stringfellow, Inc.................. 25,000 Stifel, Nicolaus & Company, Incorporated... 25,000 Sutro & Co. Incorporated................... 25,000 US Clearing Corp........................... 25,000 Utendahl Capital Partners, L.P............. 25,000 Wheat, First Securities, Inc............... 25,000 Yamaichi International (America), Inc...... 25,000 Total................................. 4,000,000 =========
35 EX-3 3 CERTIFICATE OF DESIGNATION - 12/05/95 EXHIBIT 3 CERTIFICATE OF DESIGNATIONS OF RIGHTS AND PREFERENCES OF THE 8-1/4% CUMULATIVE PREFERRED STOCK PAR VALUE $1.00 PER SHARE OF GREAT WESTERN FINANCIAL CORPORATION ___________________________________ Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware ___________________________________ GREAT WESTERN FINANCIAL CORPORATION, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY: FIRST: The Restated Certificate of Incorporation of the Corporation authorizes the issuance of 10,000,000 shares of preferred stock, par value $1.00 per share, of the Corporation ("Preferred Stock") in one or more series, and authorizes the Board of Directors to fix by resolution or resolutions the designation of each series of Preferred Stock and the powers, preferences and privileges and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof. SECOND: The Board of Directors of the Corporation, at a meeting duly held and called on September 26, 1995, authorized, among other things, the Securities Committee of the Board of Directors (the "Committee") to authorize the issuance of shares of Preferred Stock of the Corporation upon the conversion of a series of the Debt Securities of the Corporation. THIRD: The Committee, by unanimous written consent in lieu of a meeting dated December 6, 1995, did duly adopt the following resolutions providing for the designation, powers, preferences and rights, and the qualifications, limitations and/or restrictions thereof, of the 8-1/4% Cumulative Preferred Stock, $1.00 par value, of the Corporation. NOW, THEREFORE, BE IT RESOLVED, that the Committee, pursuant to authority vested in it by the Board of Directors and in accordance with the provisions of the Restated Certificate of Incorporation of the Corporation, hereby approves the issuance of a series of Preferred Stock and hereby fixes the designation of such series and the powers, preferences, privileges, and relative, participating, optional or other special rights, and qualifications, limitations and restrictions thereof in addition to those set forth in said Restated Certificate of Incorporation as follows: 1. Designation. The designation of the series of Preferred Stock ----------- created by this resolution shall be 8-1/4% Cumulative Preferred Stock, $1.00 par value, of Great Western Financial Corporation (the "Corporation") (hereinafter referred to as "Cumulative Preferred Stock"), and the number of shares constituting such series shall be 412,000, which number may be increased (but not above the total number of authorized but unissued shares of Preferred Stock of the Corporation) or decreased (but not below the number of shares then outstanding) from time to time by the Board of Directors or any authorized committee thereof. 2. Dividend Rights. --------------- (a) The holders of shares of Cumulative Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, cash dividends, accruing from the date of issuance, at the annual rate of 8-1/4% per annum, and no more, payable, when, as and if declared by the Board of Directors, quarterly on February 1, May 1, August 1 and November 1 of each year (each quarterly period ending on any such date being hereinafter referred to as a "dividend period"), at such annual rate. Each dividend will be payable to holders of record as they appear on the stock books of the Corporation on such record dates, not exceeding 45 days preceding the payment dates thereof, as shall be fixed by the Board of Directors of the Corporation. The date of initial issuance of shares of Cumulative Preferred Stock is hereinafter referred to as the "Issue Date". Dividends payable on the Cumulative Preferred Stock (i) for any period other than a full dividend period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months and (ii) for each full dividend period, shall be computed by dividing the annual dividend rate by four. (b) Dividends on shares of Cumulative Preferred Stock shall be cumulative from the Issue Date whether or not there shall be funds legally available for the payment thereof. If there shall be outstanding shares of any other series of Preferred Stock ranking on a parity with the Cumulative Preferred Stock as to dividends, no full dividends shall be declared or paid or set apart for payment on any such other series for any period unless full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Cumulative Preferred Stock for all dividend periods terminating on or prior to the date of payment of such dividends. If dividends on the Cumulative Preferred Stock and on any other series of Preferred 2 Stock ranking on a parity as to dividends with the Cumulative Preferred Stock are in arrears, in making any dividend payment on account of such arrears, the Corporation shall make payments ratably upon all outstanding shares of the Cumulative Preferred Stock and shares of such other series of Preferred Stock in proportion to the respective amounts of dividends in arrears on the Cumulative Preferred Stock and on such other series of Preferred Stock to the date of such dividend payment. Holders of shares of the Cumulative Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends on such shares. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments which may be in arrears. (c) Unless full cumulative dividends on all outstanding shares of the Cumulative Preferred Stock shall have been paid or declared and set aside for payment for all past dividend periods and the Corporation is not in default or in arrears in respect to the optional redemption of any shares of Cumulative Preferred Stock, no dividend shall be declared upon the Common Stock or upon any other stock ranking junior to the Cumulative Preferred Stock as to dividends or the distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation (the Common Stock and any other such stock being herein referred to as "Junior Stock"), nor shall the Corporation make any payment on account of, or set apart money for, the purchase, redemption or other retirement of, or for a sinking or other analogous fund for any shares of Junior Stock or make any distribution in respect thereof, whether in cash or property or in obligations or stock of the Corporation, other than Junior Stock which is neither convertible into, nor exchangeable or exercisable for, any securities of the Corporation other than Junior Stock and other than the redemption of Rights (the "Rights") distributed pursuant to a Rights Agreement, dated as of June 24, 1986, as amended, between the Corporation and Morgan Shareholder Services Trust Company (the "Rights Agreement"). 3. Liquidation Preferences. ----------------------- (a) In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holders of Cumulative Preferred Stock shall be entitled to receive out of the assets of the Corporation available for distribution to stockholders an amount equal to $250 per share of Cumulative Preferred Stock plus an amount equal to any accrued and unpaid dividends thereon to and including the date of such distribution, and no more, before any distribution shall be made to the holders of Common Stock or any other class of stock of the Corporation ranking junior to the Cumulative Preferred Stock as to the distribution of assets upon any such liquidation, dissolution or winding up. After payment of such liquidating distributions, the holders of shares of 3 Cumulative Preferred Stock will not be entitled to any further participation in any distribution of assets by the Corporation. (b) In the event the assets of the Corporation available for distribution to stockholders upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to the Cumulative Preferred Stock and any other shares of Preferred Stock ranking on a parity with the Cumulative Preferred Stock as to the distribution of assets upon any such liquidation, dissolution or winding up, the holders of Cumulative Preferred Stock and the holders of such other Preferred Stock shall share ratably in any distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. (c) The merger or consolidation of the Corporation into or with any other corporation, the merger or consolidation of any other corporation into or with the Corporation or the sale of the assets of the Corporation substantially as an entirety shall not be deemed a liquidation, dissolution or winding up of the affairs of the Corporation within the meaning of this Section 3. 4. Redemption. ---------- (a) The Corporation, at its option, may redeem any or all shares of Cumulative Preferred Stock, at any time or from time to time, on or after December 31, 2000, at a redemption price of $250.00 per share, plus an amount equal to accrued and unpaid dividends thereon to and including the date of redemption (the "Redemption Price"). In addition, during a period of 90 days after the occurrence of a Regulatory Redemption Event (as defined below), the Corporation may elect to redeem any or all shares of Cumulative Preferred Stock at the Redemption Price. Redemption of any or all shares of Cumulative Preferred Stock will require the prior consent of the Corporation's then banking supervisory authority if such consent is required by applicable law, regulation or interpretation then in effect in order for one hundred percent of the Cumulative Preferred Stock to constitute Tier 1 capital (as that concept is used in the guidelines or regulations issued by the Board of Governors of the Federal Reserve System as of December 6, 1995) or its then equivalent ("Tier 1 Capital"). "Regulatory Redemption Event" means that (i) a bank, savings and loan association, savings bank, or bank or savings and loan holding company (each a "Depository Institution") has issued or has been the sponsor of a trust or other entity (including but not limited to a general or limited partnership or limited liability company) that has issued securities that constitute Tier 1 Capital and which issued securities, or the securities underlying such issued securities, are to be treated by such Depository Institution as indebtedness for U.S. federal income tax purposes, as evidenced by the disclosure document pursuant to which such securities 4 were offered, and (ii) the Company (or its successor) has within 90 days of such issuance, received an opinion of independent counsel experienced in such matters that securities having substantially identical terms (except for rate, maturity and payment dates), if issued by the Company (or its successor) or by a Company (or its successor) sponsored trust or other entity, at least 66-2/3% of which should constitute Tier 1 Capital for the Company (or its successor) if the securities issued by such Depository Institution constituted Tier 1 Capital and such securities should be treated as indebtedness for U.S. federal income tax purposes. (b) If less than all the outstanding shares of Cumulative Preferred Stock are to be redeemed, the shares to be redeemed shall be selected pro rata (subject to rounding to avoid fractional shares) as nearly as practicable or by lot, or by such other method as the Board of Directors may determine to be equitable. (c) Notice of any redemption shall be given by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the date fixed for redemption to the holders of record of the shares of Cumulative Preferred Stock to be redeemed, at their respective addresses appearing on the stock books of the Corporation. Notice so mailed shall be conclusively presumed to have been duly given whether or not actually received. Such notice shall state: (i) the date fixed for redemption; (ii) the Redemption Price; (iii) the number of shares of Cumulative Preferred Stock to be redeemed and if less than all the shares held by such holder are to be redeemed, the number of such shares to be so redeemed from such holder; (iv) the place where certificates for such shares are to be surrendered for payment of the Redemption Price; and (v) that after the close of business on such date fixed for redemption the shares to be redeemed shall not accrue dividends. If such notice is mailed as aforesaid, and if on or before the date fixed for redemption funds sufficient to redeem the shares called for redemption are set aside by the Corporation in trust for the account of the holders of the shares to be redeemed, notwithstanding the fact that any certificate for shares called for redemption shall not have been surrendered for cancellation, from and after the related redemption date the shares represented thereby so called for redemption shall be deemed to be no longer outstanding, dividends thereon shall cease to accrue, and all rights of the holders of such shares as stockholders of the Corporation shall cease, except the right to receive the Redemption Price, without interest, upon surrender of the certificate representing such shares. Upon surrender in accordance with the aforesaid notice of the certificate for any shares so redeemed (duly endorsed or accompanied by appropriate instruments of transfer, if so required by the Corporation in such notice), the holders of record of such shares shall be entitled to receive the Redemption Price, without interest. In 5 case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (d) At the option of the Corporation, if notice of redemption is mailed as aforesaid, and if prior to the date fixed for redemption funds sufficient to pay in full the Redemption Price are deposited in trust, for the account of the holders of the shares to be redeemed, with a bank or trust company named in such notice doing business in the Borough of Manhattan, The City of New York, State of New York or The City of Los Angeles, State of California and having capital surplus and undivided profits of at least $50 million (which bank or trust company also may be the transfer agent and/or paying agent for the Cumulative Preferred Stock), notwithstanding the fact that any certificate(s) for shares called for redemption shall not have been surrendered for cancellation, on and after such date of deposit the shares represented thereby so called for redemption shall be deemed to be no longer outstanding, and all rights of the holders of such shares as stockholders of the Corporation shall cease, except the right of the holders thereof to receive out of the funds so deposited in trust the Redemption Price, without interest, upon surrender of the certificate(s) representing such shares. Any funds so deposited with such bank or trust company which shall remain unclaimed by the holders of shares called for redemption at the end of two years after the related redemption date shall be repaid to the Corporation, on demand, and thereafter the holder of any such shares shall look only to the Corporation for the payment, without interest thereon, of the Redemption Price. (e) Any provision of this Section 4 to the contrary notwithstanding, in the event that any quarterly dividend payable on the Cumulative Preferred Stock or any dividend on any other series of Preferred Stock of the Corporation ranking on a parity with the Cumulative Preferred Stock as to dividends and distribution of assets upon liquidation, dissolution or winding up of the affairs of the Corporation (the "Parity Preferred Stock") shall be in arrears and until all such dividends in arrears shall have been paid or declared and set apart for payment, the Corporation shall not redeem any shares of Cumulative Preferred Stock or Parity Preferred Stock unless all outstanding shares of Cumulative Preferred Stock and Parity Preferred Stock are simultaneously redeemed and shall not purchase or otherwise acquire any shares of Cumulative Preferred Stock or the Parity Preferred Stock except in accordance with a purchase or exchange offer made on the same terms to all holders of record of Cumulative Preferred Stock and Parity Preferred Stock for the purchase of all outstanding shares thereof. 6 5. Voting Rights. Other than as required by applicable law, the ------------- Cumulative Preferred Stock shall not have any voting powers either general or special, except that: (a) Unless the vote or consent of the holders of a greater number of shares shall then be required by law, the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Cumulative Preferred Stock, and any one or more other series of Parity Preferred Stock which by its terms provides for similar voting rights (the "Other Preferred Stock") and is similarly affected, at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of the Cumulative Preferred Stock and any such other series of Other Preferred Stock shall vote together as a separate and single class, shall be necessary for authorizing, effecting or validating the amendment, alteration or repeal of, or any other change in, any of the provisions of the Restated Certificate of Incorporation or of any amendment or supplement thereto (including any Certificate of Designations or any similar document relating to any series of Preferred Stock) of the Corporation, which would adversely affect the preferences, rights, powers or privileges, qualifications, limitations and restrictions of the Cumulative Preferred Stock and any such other series of Other Preferred Stock. (b) Unless the vote or consent of the holders of a greater number of shares shall then be required by law, the affirmative vote or consent of the holders of at least 66-2/3% of all of the shares of the Cumulative Preferred Stock and any series of Other Preferred Stock of the Corporation at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of the Cumulative Preferred Stock and any such series of Other Preferred Stock of the Corporation shall vote together as a single class without regard to series, shall be necessary to create, authorize or issue, or reclassify any authorized stock of the Corporation into, or create, authorize or issue any obligation or security convertible into or evidencing a right to purchase, or increase the authorized amount of, any shares of any class of stock of the Corporation ranking prior to the Cumulative Preferred Stock and any series of Other Preferred Stock. Subject to the foregoing, the Corporation's Restated Certificate of Incorporation may be amended to increase the number of authorized shares of Preferred Stock without the vote of the holders of Preferred Stock, including the Cumulative Preferred Stock. (c) Whenever, at any time or times, dividends payable on the shares of Cumulative Preferred Stock shall be in arrears in an amount equal to at least six full quarterly dividends on shares of the Cumulative Preferred Stock at the time outstanding, the holders of the outstanding shares of Cumulative 7 Preferred Stock shall have the exclusive right, voting separately as a class together with holders of shares of any one or more series of Other Preferred Stock to elect two directors of the Corporation at the Corporation's next annual meeting of stockholders and at each subsequent annual meeting of stockholders at which such directors or their successors are to be elected. At elections for such directors, each holder of Cumulative Preferred Stock shall be entitled to one vote for each share held (the holders of shares of any series of Other Preferred Stock being entitled to such number of votes, if any, for each such share of Other Preferred Stock held as may be granted to them). Upon the vesting of such right of the holders of Cumulative Preferred Stock, the maximum authorized number of members of the Board of Directors shall automatically be increased by two and the two vacancies so created shall be filled by vote of the holders of the outstanding shares of Cumulative Preferred Stock (either alone or together with the holders of shares of any series of Other Preferred Stock) as hereinafter set forth. The right of the holders of Cumulative Preferred Stock, voting separately as a class to elect (either alone or together with the holders of shares of any series of Other Preferred Stock) members of the Board of Directors of the Corporation as aforesaid shall continue until such time as all dividends accumulated on the Cumulative Preferred Stock shall have been paid in full or declared and set apart for payment, at which time such right shall terminate, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned. (d) Each director elected by the holders of shares of Cumulative Preferred Stock (either alone or together with the holders of shares of any series of Other Preferred Stock) shall continue to serve as such director for the full term for which he or she shall have been elected, notwithstanding that prior to the end of such term all dividends on the Cumulative Preferred Stock shall have been paid in full. If the office of any director elected by the holders of Cumulative Preferred Stock voting as a class becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, such vacancy shall be filled as provided in the Restated Certificate of Incorporation of the Corporation and the applicable provisions of the General Corporation Law of the State of Delaware. Whenever the term of office of the directors elected by the holders of the Cumulative Preferred Stock and the special voting powers vested in the holders of Cumulative Preferred Stock as provided in this subsection (d) shall have expired, the number of directors shall be such number as may be provided for in the Restated Certificate of Incorporation or the By-Laws, as amended, irrespective of any increase made pursuant to the provisions of this subsection (d). 8 6. Reacquired Shares. Shares of Cumulative Preferred Stock redeemed or ----------------- otherwise purchased or acquired by the Corporation shall be restored to the status of authorized but unissued shares of Preferred Stock without designation as to series. 7. No Sinking Fund. Shares of Cumulative Preferred Stock are not subject --------------- to the operation of a sinking fund or other obligation of the Corporation to redeem or retire the Cumulative Preferred Stock. 8. Rank. The Cumulative Preferred Stock shall rank on a parity, both as ---- to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Corporation, with the Company's 8-3/4% Cumulative Convertible Preferred Stock and 8.30% Cumulative Preferred Stock. The Cumulative Preferred Stock shall rank prior, both as to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Corporation, to the Common Stock and the Series A Junior Participating Preferred Stock, par value $1.00 per share, of the Corporation. FURTHER RESOLVED, that the Chairman of the Board, the Vice Chairman, the President, any Executive or Senior Vice President, or any Vice President are, and each of them is hereby, authorized and directed, in the name and on behalf of the Corporation, to execute and file a copy of this Certificate of Designations in accordance with the provisions of Sections 103 and 151(g) of the General Corporation Law of the State of Delaware. 9 IN WITNESS WHEREOF, GREAT WESTERN FINANCIAL CORPORATION, has caused this Certificate of Designations to be signed by Bruce F. Antenberg, its Senior Vice President and Treasurer and attested to by Stephen F. Adams, its First Vice President and Assistant Secretary, and its corporate seal to be hereunder affixed this 6th day of December, 1995. GREAT WESTERN FINANCIAL CORPORATION [Seal] By /s/ Bruce F. Antenberg Bruce F. Antenberg Senior Vice President and Treasurer Attest: /s/ Stephen F. Adams Stephen F. Adams First Vice President and Assistant Secretary 10 EX-4.1 4 SECOND SUPPLEMENTAL INDENTURE EXHIBIT 4.1 ================================================================================ GREAT WESTERN FINANCIAL CORPORATION TO HARRIS TRUST AND SAVINGS BANK, as Trustee ____________________ SECOND SUPPLEMENTAL INDENTURE dated as of December 6, 1995 ____________________ 8 1/4% Subordinated Deferrable Interest Notes Due 2025 ================================================================================ Table of Contents
Page ---- ARTICLE I Definitions Section 1.1. Definition of Terms................................. 2 ------------------- ARTICLE II General Terms and Conditions of the Notes Section 2.1. Designation and Principal Amount.................... 3 -------------------------------- Section 2.2. Maturity............................................ 3 -------- Section 2.3. Form and Payment.................................... 4 ---------------- Section 2.4. Global Note......................................... 5 ----------- Section 2.5. Interest............................................ 6 -------- ARTICLE III Redemption of the Notes Section 3.1. Tax Event Redemption................................ 8 -------------------- Section 3.2. Regulatory Redemption Event......................... 8 --------------------------- Section 3.3. Option Redemption by Company........................ 9 ---------------------------- Section 3.4. Clean Up Redemption by the Company.................. 9 ---------------------------------- Section 3.5. Redemption Procedures............................... 9 --------------------- Section 3.6. No Sinking Fund..................................... 10 --------------- ARTICLE IV Extension of Interest Payment Period Section 4.1. Extension of Interest Payment Period................ 10 ------------------------------------ Section 4.2. Notice of Extension................................. 10 ------------------- ARTICLE V Expenses Section 5.1. Payment of Expenses................................. 11 -------------------
i ARTICLE VI Subordination Section 6.1. Agreement to Subordinate............................ 12 ------------------------ ARTICLE VII CONVERSION OF NOTES Section 7.1. Conversion Privilege................................ 12 -------------------- Section 7.2. Exercise of Retention Privilege..................... 12 ------------------------------- ARTICLE VIII Covenants Section 8.1. Listing on an Exchange.............................. 13 ---------------------- Section 8.2. Notification of Regulatory Event.................... 13 -------------------------------- Section 8.3. Limitation on Dividends; Transactions with ------------------------------------------ Affiliates.......................................... 13 ---------- Section 8.4. Covenants as to the Trust........................... 14 ------------------------- ARTICLE IX Events of Default Section 9.1. Events of Default................................... 14 ----------------- Section 9.2. Waiver of Past Defaults............................. 15 ----------------------- ARTICLE X Form of Note Section 10.1. Form of Note........................................ 15 ------------ ARTICLE XI Original Issue of Notes Section 11.1. Original Issue of Notes............................. 24 ----------------------- ARTICLE XII Miscellaneous Section 12.1. Ratification of Indenture........................... 24 ------------------------- Section 12.2. Trustee Not Responsible for Recitals................ 24 ------------------------------------ Section 12.3. Governing Law....................................... 24 ------------- Section 12.4. Separability........................................ 24 ------------ Section 12.5. Counterparts........................................ 25 ------------
ii Section 12.6. Acknowledgement of Rights of Holders ------------------------------------ of Preferred Securities............................. 25 ----------------------- Section 12.7. Supplemental Indentures............................. 25 -----------------------
iii SECOND SUPPLEMENTAL INDENTURE, dated as of December 6, 1995 (the "Second 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, 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 1/4% Subordinated Deferrable Interest Notes due 2025" (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 Second Supplemental Indenture; WHEREAS, Great Western Financial Trust I, a Delaware statutory business trust (the "Trust"), has offered to the public $100 million aggregate liquidation amount of its 8 1/4% Trust Originated Preferred Securities(SM) (the "Preferred Securities"), representing undivided beneficial interests in the assets of the Trust and proposes to invest the proceeds from such offering in $100 million aggregate principal amount of the Notes; and WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture and all requirements necessary to make this Second 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 Second 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: 1 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 Second Supplemental Indenture; (b) a term defined anywhere in this Second 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 Second 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) Common Security; (iii) Delaware Trustee; (iv) Depositary; (v) Dissolution Tax Opinion; (vi) Ministerial Action; (vii) No Recognition Opinion; (viii) Preferred Securities Guarantee; (ix) Property Trustee; (x) Purchase Agreement; (xi) Redemption Tax Opinion; (xii) Regular Trustee; (xiii) Regulatory Event; (xiv) Regulatory Redemption Event; (xv) Special Event; (xvi) Trust Securities; and (xvii) Tax Event; 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(d). "Compounded Interest" has the meaning given such term in Section 4.1. "Coupon Rate" has the meaning given such term in Section 2.5(b). "Deferred Interest" means Additional Interest and Compounded Interest. "Declaration" means the Amended and Restated Declaration of Trust of the Trust dated December 6, 1995. "Depositary Shares" means the Depositary Shares of the Company, $25.00 liquidation preference per share, each representing a one-tenth interest in a share of 8 1/4% Cumulative 2 Preferred Stock of the Company, $250 liquidation preference per share (the "Cumulative Preferred"). The rights and preferences of the Cumulative Preferred are as established in the Certificate of Designations of Rights and Preferences of Preferred Stock filed with the Secretary of State of the State of Delaware on December 8, 1995. "Dissolution Event" means that as a result of the occurrence and continuation of a Special Event or as a result of a Regulatory 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 Maturity Date" means, if the Company elects to extend the Maturity Date in accordance with Section 2.2(b), the date selected by the Company which is after the Stated Maturity Date but before December 31, 2044. "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). "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 Preferred Securities" has the meaning given such term in Section 2.4(a)(ii). "Redemption Price," for purposes of the Notes, has the meaning given such term in Section 3.1(b). 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 1/4% Subordinated Deferrable Interest Notes due 2025", limited in aggregate principal amount to $103,092,800, 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. -------- (a) The Maturity Date will be either: (i) December 31, 2025; or 3 (ii) if the Company elects to extend the Maturity Date beyond December 31, 2025 in accordance with Section 2.2(b), the Extended Maturity Date; (b) the Company may at any time before the day which is 90 days before December 31, 2025, elect to extend the Maturity Date only once to the Extended Maturity Date, provided that the following conditions in this -------- ---- Section 2.2(b) are satisfied both at the date the Company gives notice in accordance with Section 2.2(c) of its election to extend the Maturity Date and at December 31, 2025: (i) the Company is not in bankruptcy or otherwise insolvent; (ii) the Company is not in default on any Notes issued to the Trust or any trustee of the Trust or to any trust or trustee of the Trust in connection with the issuance of Trust Securities by the Trust; (iii) the Company has made timely payments on the Notes for the immediately preceding 18 months without deferrals; (iv) the Trust is not in arrears on payments of Distributions on the Trust Securities issued by it; and (v) the Notes are rated in one of the four highest rating categories by any one of Standard & Poor's Ratings Group, Moody's Investors Service, Inc., Fitch Investor Services, Inc., Duff & Phelps Credit Rating Company or any other nationally recognized statistical rating organization; and (c) if the Company elects to extend the Maturity Date in accordance with Section 2.2(b), the Company shall give notice to Holders of the Notes, the Property Trustee, the Trust and the Trustee of the extension of the Maturity Date and the Extended Maturity Date at least 90 days before December 31, 2025. 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 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. 4 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 Second Supplemental Indenture. Payments on the Notes issued as a Global Note will be made to the Depositary; and (ii) if any Preferred 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 Preferred Security Certificate which represents Preferred Securities other than Preferred Securities held by the Depositary or its nominee ("Non Book-Entry Preferred 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 Preferred Securities until such Preferred Security Certificates are presented to the Debt Securities Registrar for transfer or reissuance at which time such Preferred Security Certificates will be cancelled and a Note registered in the name of the holder of the Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Security Certificate cancelled will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this Second 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. 5 (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 1/4% 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 (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of Article Four of this Second Supplemental Indenture) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date", 6 commencing on December 31, 1995), 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 Global Note, shall be the close of business on the Business Day next preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if the Preferred 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) Notwithstanding the foregoing, upon the occurrence of a Regulatory Event, for a period of 90 days following written notice to the Trustee of the occurrence of a Regulatory Event, the Company may elect to reduce the annual interest rate on the Notes to 7 3/4% per annum, effective for all periods on and after the date of distribution of the Notes to holders of Preferred Securities pursuant to a Dissolution Event; provided, however, that if the Company has elected to defer payments of interest as set forth in Article IV, all deferred interest payments and accrued interest thereon shall be paid before the distribution of the Notes to holder of Preferred Securities. On and after the effective date of such reduction, the term "Coupon Rate" shall mean 7 3/4% per annum and all references to the Notes herein shall be to Notes with the revised Coupon Rate for all periods on and after the date of distribution of the Notes to holders of Preferred Securities pursuant to a Dissolution Event. (c) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Except as provided in the following sentence, the amount of interest payable for any period shorter than a full quarterly period for which interest is computed, will be computed on the basis of the actual number of days elapsed in such a 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. 7 (d) 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 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. A redemption price equal to 100% of the principal amount of the Notes redeemed plus any accrued and unpaid interest thereon to the date of redemption plus Additional and Compounded Interest, if any (the "Redemption Price"), shall be paid. Section 3.2. Regulatory Redemption Event. --------------------------- If a Regulatory Redemption Event has occurred, for a period of 90 days following written notice to the Trustee of the 8 occurrence of a Regulatory Redemption Event, the Company shall have the right to redeem the Notes, in whole or in part, at 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. Section 3.3. Optional Redemption by Company. ------------------------------ Subject to the provisions of Section 3.5(b) and to the provisions of Article Eleven of the Indenture, except as otherwise may be specified in this Second Supplemental Indenture, the Company shall have the right to redeem the Notes, in whole or in part, from time to time, on or after December 31, 2000, at the Redemption Price. Section 3.4. Clean Up Redemption by the Company. ---------------------------------- If (i) a Regulatory Event has occurred and Notes with a reduced Coupon Rate have been distributed to holders of Preferred Securities as contemplated by Section 2.5(b) hereof and (ii) immediately after such distribution $10 million or less of aggregate principal amount of Notes remain outstanding, the Company shall have the right to redeem the Notes in whole at the Redemption Price at any time during the period from the Interest Payment Date on which such Notes were distributed to holders of Preferred Securities to and including the next succeeding Interest Payment Date. Section 3.5. Redemption Procedures. --------------------- (a) 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 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. (b) If a partial redemption of the Notes would result in the delisting of the Preferred Securities issued by the Trust from any national securities exchange or other organization on which the Preferred Securities are then listed, the Company shall not be permitted to effect such partial redemption and may only redeem the Notes in whole. 9 Section 3.6. 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 20 consecutive quarters (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 quarterly for each quarter of the Extended Interest Payment Period ("Compounded Interest"). At the end of the Extended Interest Payment Period the Company shall pay all interest accrued and unpaid on the 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 20 consecutive quarters. 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 the New York Stock Exchange or other applicable self- regulatory organization or to holders of the Preferred Securities issued by the Trust, but in any event at least one Business Day before such record date. 10 (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 the New York Stock Exchange or other applicable self-regulatory organization or to Holders of the Notes. (c) The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in the maximum Extended Interest Payment Period permitted under Section 4.1. 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 Purchase 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 11 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 Preferred 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 CONVERSION OF NOTES Section 7.1. Conversion Privilege. -------------------- If the Company has elected to adjust the annual interest rate on the Notes as provided in Section 2.5(b), then on the next Interest Payment Date which is at least 30 days after notice to the holders of Trust Securities of the Company's election to adjust the annual interest rate on the Notes as a result of a Regulatory Event, each Note shall be converted into Depositary Shares with a liquidation preference equal to the principal amount of the Notes converted, plus, in cash, any accrued but unpaid interest on the Notes to the date of conversion, unless prior to such conversion the holder of the Trust Securities elects not to convert such Note (the "Retention Privilege"), in which event such holder shall be entitled to receive the Note. Section 7.2. Exercise of Retention Privilege. ------------------------------- In order to exercise the Retention Privilege, if available, the Holder of any Note or right to receive any Note shall surrender Preferred Securities, duly endorsed or assigned to the Company or in blank, with a liquidation preference equal to the principal amount of Notes to be retained, accompanied by written notice to the Company and delivered to any office or agency of the Company maintained for that purpose, or if less than the 12 entire principal amount of Notes to which such holder is entitled is to be retained, the portion thereof to be retained. Notes shall be deemed to be converted as of the date Notes are otherwise distributed to holders of Preferred Securities pursuant to a Dissolution Event as a result of a Regulatory Event, and at such time the rights of such Holder to Notes shall cease, and the Person or Persons entitled to receive the Depositary Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Depositary Shares at such time. In the case of any Note converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Note of authorized denominations in aggregate principal amount to the unconverted portion of the principal amount of such Note. ARTICLE VIII COVENANTS Section 8.1. Listing on an Exchange. ---------------------- If the Notes are to be issued as a Global Note in connection with the distribution of the Notes to the holders of the Preferred Securities issued by the Trust upon a Dissolution Event and/or Depositary Shares are issued upon conversion as provided in Article VII, the Company will use its best efforts to list such Notes or Depositary Shares, as the case may be, on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. Section 8.2. Notification of Regulatory Event. -------------------------------- The Company shall promptly notify the Regular Trustees and the Trustee of the occurrence of a Regulatory Event. Section 8.3. 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 Preferred 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 13 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 8.4. 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 IX EVENTS OF DEFAULT Section 9.1. Events of Default. ----------------- For the Notes only, a valid extension of the interest payment period in accordance with Article IV hereof shall not 14 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 9.2. 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 X FORM OF NOTE Section 10.1. 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 Security shall be a Global Security, subject to the foregoing, except in the limited circumstances described above. Unless this certificate is presented by an authorized representative of The 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 15 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.) No. __________________ $_____________ CUSIP No.__________________ 8 1/4% SUBORDINATE DEFERRABLE INTEREST NOTE DUE 2025 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 _______________, or registered assigns, the principal sum of ______________ Dollars on December 31, 2025, (or on such later date before December 31, 2044, if the Company elects to extend the maturity date as further described herein), and to pay interest on said principal sum from December 11, 1995, 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, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year commencing December 31, 1995, at the rate of 8 1/4% per annum (or at 7 3/4% per annum if the Company elects to reduce the interest rate per annum as further described herein) until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded quarterly. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this 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 16 PURSUANT TO THE PROVISIONS OF THE INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE -- which shall be the close of business of 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, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this 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, 17 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. 18 IN WITNESS WHEREOF, the Company has caused this instrument to be executed. Dated___________________ GREAT WESTERN FINANCIAL CORPORATION By________________________________ { } Attest: By__________________________ Secretary 19 (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 and a Second Supplemental Indenture dated as of December 6, 1995, 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 Second Supplemental Indenture. The Company shall have the right to redeem this Note at the option of the Company, without premium or penalty, in whole or in part at any time on or after December 31, 2000 (a "Optional Redemption") or at any time in certain circumstances upon the occurrence of a Tax Event, or in whole for a limited time as further described below, at the Company's election upon the occurrence of a Regulatory Redemption Event, at a redemption price equal to 100% of the principal amount plus any accrued but 20 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, at the Redemption Price. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, 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. Upon the occurrence of a Regulatory Event, the Company may elect to reduce the interest rate per annum on this Note by 50 basis points, effective for all periods on and after the date of distribution of this Note to holders of Trust Securities; provided, however, that if the Company has elected to defer payments of interest as set forth below, all deferred interest payments and accrued interest thereon shall be paid before the distribution of this Note to holders of Preferred Securities. If the interest rate per annum on this Note is reduced, on the date of the next Interest Payment Date which is at least 30 days after notice to the holders of Trust Securities of the Company's election to reduce the interest rate per annum on the Notes, this Note shall be converted into Depositary Shares of the Company with a liquidation preference equal to the principal amount of this Note, plus in cash any accrued but unpaid interest on this Note to the date of conversion, unless prior to such conversion the holder of this Note elects not to convert this Note, in whole or in part, in which event such holder shall be entitled to receive this Note or a new Note with a principal amount equal to the portion of this Note not converted. Depositary Shares have a liquidation preference of $25 per share, each representing a one- tenth interest in a share of 8 1/4% Cumulative Preferred Stock of the Company, $250 liquidation preference per share. In the event of a redemption or conversion of this Note in part only, a new Note for the unredeemed or unconverted 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 21 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 extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Holder of each 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 herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this 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 20 consecutive quarters (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 20 consecutive quarters. 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 22 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 $25 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 $25 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. 23 ARTICLE XI ORIGINAL ISSUE OF NOTES Section 11.1. Original Issue of Notes. ----------------------- Notes in the aggregate principal amount of $103,092,800 may, upon execution of this Second 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 XII MISCELLANEOUS Section 12.1. Ratification of Indenture. ------------------------- The Indenture, as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. Section 12.2. 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 Second Supplemental Indenture. Section 12.3. Governing Law. ------------- This Second 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 12.4. Separability. ------------ In case any one or more of the provisions contained in this Second 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 Second Supplemental Indenture or of the Notes, but this Second Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 24 Section 12.5. Counterparts. ------------ This Second 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 12.6. Acknowledgment of Rights of Holders of Preferred Securities. ----------------------------------------------------------- The Company acknowledges that the holders of the Preferred 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 12.7. 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. 25 IN WITNESS WHEREOF, the parties hereto have caused this Second 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 /s/ Bruce F. Antenberg Attest: /s/ J. Lance Erikson Secretary HARRIS TRUST AND SAVINGS BANK, as Trustee By /s/ Kevin O. Healey Attest: /s/ D.G. Donovan Assistant Secretary 26 EX-4.2 5 AMENDED & RESTATED DECLARATION TRUST EXHIBIT 4.2 ================================================================================ AMENDED AND RESTATED DECLARATION OF TRUST GREAT WESTERN FINANCIAL TRUST I Dated as of December 6, 1995 ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I - INTERPRETATION AND DEFINITIONS.................................. 2 Section 1.1 Definitions............................................. 2 ----------- ARTICLE II - TRUST INDENTURE ACT............................................ 8 Section 2.1 Trust Indenture Act; Application........................ 8 -------------------------------- Section 2.2 Lists of Holders of Trust Securities.................... 9 ------------------------------------ Section 2.3 Reports by the Property Trustee......................... 9 ------------------------------- Section 2.4 Periodic Reports to Property Trustee.................... 9 ------------------------------------ Section 2.5 Evidence of Compliance with Conditions Precedent........ 10 ------------------------------------------------ Section 2.6 Events of Default; Waiver............................... 10 ------------------------- Section 2.7 Event of Default; Notice................................ 12 ------------------------ ARTICLE III - Organization.................................................. 12 Section 3.1 Name.................................................... 12 ---- Section 3.2 Office.................................................. 13 ------ Section 3.3 Purpose................................................. 13 ------- Section 3.4 Authority............................................... 13 --------- Section 3.5 Title to Property of the Trust.......................... 13 ------------------------------ Section 3.6 Powers and Duties of the Regular Trustees............... 13 ----------------------------------------- Section 3.7 Prohibition of Actions by the Trust and the Trustees.... 17 ---------------------------------------------------- Section 3.8 Powers and Duties of the Property Trustee............... 18 ----------------------------------------- Section 3.9 Certain Duties and Responsibilities of the Property --------------------------------------------------- Trustee................................................. 20 ------- Section 3.10 Certain Rights of Property Trustee...................... 22 ---------------------------------- Section 3.11 Delaware Trustee........................................ 25 ---------------- Section 3.12 Execution of Documents.................................. 25 ---------------------- Section 3.13 Not Responsible for Recitals or Issuance of Trust ------------------------------------------------- Securities.............................................. 25 ---------- Section 3.14 Duration of Trust....................................... 25 ----------------- Section 3.15 Mergers................................................. 25 ------- ARTICLE IV - SPONSOR........................................................ 27 Section 4.1 Sponsor's Purchase of Common Securities................. 27 --------------------------------------- Section 4.2 Responsibilities of the Sponsor......................... 27 ------------------------------- ARTICLE V -TRUSTEES......................................................... 28 Section 5.1 Number of Trustees...................................... 28 ------------------ Section 5.2 Delaware Trustee........................................ 29 ---------------- Section 5.3 Property Trustee; Eligibility........................... 29 ----------------------------- Section 5.4 Qualifications of Regular Trustees and -------------------------------------- Delaware Trustee Generally.............................. 30 -------------------------- Section 5.5 Initial Trustees........................................ 30 ---------------- Section 5.6 Appointment, Removal and Resignation of Trustees........ 31 ------------------------------------------------
Section 5.7 Vacancies Among Trustees................................ 32 ------------------------ Section 5.8 Effect of Vacancies..................................... 32 ------------------- Section 5.9 Meetings................................................ 33 -------- Section 5.10 Delegation of Power..................................... 33 ------------------- Section 5.11 Merger, Conversion, Consolidation or Succession ----------------------------------------------- to Business............................................. 34 ----------- ARTICLE VI - DISTRIBUTIONS.................................................. 34 Section 6.1 Distributions........................................... 34 ------------- ARTICLE VII - ISSUANCE OF TRUST SECURITIES.................................. 34 Section 7.1 General Provisions Regarding Trust Securities........... 34 --------------------------------------------- ARTICLE VIII - TERMINATION.................................................. 36 Section 8.1 Termination of Trust.................................... 36 -------------------- ARTICLE IX - TRANSFER OF INTEREST........................................... 37 Section 9.1 Transfer of Trust Securities............................ 37 ---------------------------- Section 9.2 Transfer of Certificates................................ 37 ------------------------ Section 9.3 Deemed Trust Security Holders........................... 38 ----------------------------- Section 9.4 Book Entry Interests.................................... 38 -------------------- Section 9.5 Notices to Depositary................................... 39 --------------------- Section 9.6 Appointment of Successor Depositary..................... 39 ----------------------------------- Section 9.7 Definitive Preferred Security Certificates.............. 39 ------------------------------------------ Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates....... 40 ------------------------------------------------- ARTICLE X - LIMITATION OF LIABILITY OF HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS..................................................... 40 Section 10.1 Liability............................................... 40 --------- Section 10.2 Exculpation............................................. 41 ----------- Section 10.3 Fiduciary Duty.......................................... 42 -------------- Section 10.4 Indemnification......................................... 43 --------------- Section 10.5 Outside Businesses...................................... 43 ------------------ ARTICLE XI - ACCOUNTING..................................................... 44 Section 11.1 Fiscal Year............................................. 44 ----------- Section 11.2 Certain Accounting Matters.............................. 44 -------------------------- Section 11.3 Banking................................................. 45 ------- Section 11.4 Withholding............................................. 45 ----------- ARTICLE XII - AMENDMENTS AND MEETINGS....................................... 46 Section 12.1 Amendments.............................................. 46 ---------- Section 12.2 Meetings of the Holders of Trust Securities; -------------------------------------------- Action by Written Consent............................... 48 ------------------------- ARTICLE XIII - REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE........... 50 Section 13.1 Representations and Warranties of Property Trustee...... 50 --------------------------------------------------
Section 13.2 Representations and Warranties of Delaware Trustee...... 51 -------------------------------------------------- ARTICLE XIV - MISCELLANEOUS................................................. 51 Section 14.1 Notices................................................. 51 ------- Section 14.2 Governing Law........................................... 52 ------------- Section 14.3 Intention of the Parties................................ 53 ------------------------ Section 14.4 Headings................................................ 53 -------- Section 14.5 Successors and Assigns.................................. 53 ---------------------- Section 14.6 Partial Enforceability.................................. 53 ---------------------- Section 14.7 Counterparts............................................ 53 ------------ EXHIBIT A................................................................... A-1 ANNEX I..................................................................... I-1 ANNEX II................................................................... II-1
AMENDED AND RESTATED DECLARATION OF TRUST AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and effective as of December 6, 1995, 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 I (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of September 25, 1995, (the "Original Declaration") and a Certificate of Trust filed with the Secretary of State of Delaware on September 27, 1995, 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. 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. "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. -- --- "Certificate" means a Common Security Certificate or a Preferred Security Certificate. 2 "Closing Date" means December 14, 1995. "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 December 6, 1995, 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. "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 Preferred 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 Preferred Securities and in whose name or in the name of a nominee of that organization shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Preferred Securities. "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. "Depositary Shares" means the Depositary Shares of the Note Issuer, having a liquidation preference of $25.00 per share, each representing a one-tenth interest in a share of 8-1/4% Cumulative Preferred Stock of the Note Issuer, $250 liquidation preference per share (the "Cumulative Preferred"). The rights and preferences of the Cumulative Preferred are as established in the Certificate of Designations of Rights and Preferences of Preferred Stock filed with the Secretary of State of Delaware on December 13, 1995. 3 "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 Preferred 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 Preferred 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 April 30, 1993 and the Second Supplemental Indenture dated December 6, 1995. "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. 4 "Legal Action" has the meaning set forth in Section 3.6(g). "Ministerial Action" has the meaning set forth in Exhibit A. "Majority in liquidation amount of the Trust Securities" means, except as provided in the terms of the Preferred 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 Preferred Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (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. "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). 5 "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Preferred Securities Guarantee" means the guarantee agreement to be dated as of December 6, 1995, of the Sponsor in respect of the Preferred Securities. "Preferred Security" has the meaning specified in Section 7.1. "Preferred Security Beneficial Owner" means, with respect to a Book Entry Interest, a Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the 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). "Preferred Security Certificate" means a certificate representing a Preferred Security substantially in the form of Annex I to Exhibit A. "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). "Purchase Agreement" means the Purchase Agreement for the offering and sale of Preferred Securities. "Quorum" means a majority of the Regular Trustees or, if there are only two Regular Trustees, both of them. "Regular Trustee" has the meaning set forth in Section 5.1. "Regulatory Event" has the meaning set forth in Exhibit A. "Regulatory Redemption Event" has the meaning set forth in Exhibit A. "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. 6 "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 Preferred 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 Preferred 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 Preferred Securities or Holders 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. 7 "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 Preferred 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. 8 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 December 31 of each year, the Property Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by 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. 9 Section 2.5 Evidence of Compliance with Conditions Precedent. ------------------------------------------------ Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Declaration that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. Section 2.6 Events of Default; Waiver. ------------------------- (a) The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, the Event of Default under the Declaration shall also not be waivable; or (ii) 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 Preferred 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 Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or an Event of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote, or consent of the Holders of the Common Securities. (b) The Holders of a Majority in liquidation amount of the Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect to the Common Securities 10 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 Holders 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 Holders 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 Preferred 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 Preferred 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 Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the 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 Preferred Securities, constitutes a waiver of the corresponding Event of Default under this Declaration. 11 Section 2.7 Event of Default; Notice. ------------------------ (a) The Property Trustee shall, within 90 days after the occurrence of a default, transmit by mail, first class postage prepaid, to the Holders of the Trust Securities, notices of all defaults with respect to the Trust Securities known to the Property Trustee, 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 I", 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, 12 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 Preferred Securities and the Common Securities in accordance with this Declaration; provided, however, that the Trust -------- ------- may issue no more than one series of Preferred Securities and no more than one series of Common Securities, and, provided further, that -------- ------- there shall be no interests in the Trust 13 other than the Trust Securities, and the issuance of Trust Securities shall be limited to a one-time, simultaneous issuance of both Preferred Securities and Common Securities on the Closing Date; (b) in connection with the issue and sale of the Preferred Securities, at the direction of the Sponsor, to: (i) execute and file with the Commission the Registration Statement on Form S-3 prepared by the Sponsor, including any amendments thereto, pertaining to the Preferred 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 Preferred Securities in any State in which the Sponsor has determined to qualify or register such Preferred Securities for sale; (iii) execute and file an application, prepared by the Sponsor, to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market System for listing upon notice of issuance of any Preferred Securities; (iv) execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act; and (v) execute and enter into the Purchase Agreement providing for the sale of the Preferred Securities; (c) to acquire the Notes with the proceeds of the sale of the Preferred 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 Preferred Securities and the Holders of Common Securities; (d) to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; 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; 14 (e) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Preferred Securities and Holders of Common Securities as to such actions and applicable record dates; (f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of the 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 (i) to defer payments of interest on the Notes by extending the interest payment period under the Indenture or, (ii) to extend the scheduled maturity date on the Notes; (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 15 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 Preferred 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. -------- 16 (a) The Trust shall not, and the Trustees (including the Property Trustee) shall not, engage in any activity other than as required or authorized by this Declaration. In particular, the Trust shall not and 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 Holders of the Trust Securities. 17 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 Preferred Securities and Holders of the Common Securities from the Property Trustee Account in accordance with Section 6.1. Funds in the Property Trustee Account shall be held uninvested until disbursed in accordance with this Declaration. The Property Trustee Account shall be an account that is maintained with a banking institution the rating on whose long term unsecured indebtedness is at least equal to the then outstanding rating assigned to the Preferred 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 Preferred 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. 18 (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 not resign as a Trustee unless either: (i) the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of 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 19 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 20 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 21 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); 22 (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; 23 (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 24 have any of the duties and responsibilities of the Regular Trustees or the Property Trustee described in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Business Trust Act. 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 without the consent of the Holders of the Trust Securities, the Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, 25 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 Preferred 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) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are then listed or quoted; (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization; (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the 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); (vi) such successor entity has a purpose identical to that of the Trust; (vii) 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: 26 (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 (viii) 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 Preferred Securities are sold. Section 4.2 Responsibilities of the Sponsor. ------------------------------- In connection with the issue and sale of the Preferred 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 Preferred 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 27 the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States; (c) to prepare for filing by the Trust an application to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market System for listing upon notice of issuance of any Preferred Securities; (d) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto; and (e) to negotiate the terms of the Purchase Agreement providing for the sale of the Preferred 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 Holders of a Majority in liquidation amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; provided, however, -------- ------- that the number of Trustees shall in no event be less than 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 28 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). 29 (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 Preferred Securities Guarantee shall be deemed to be specifically described in this Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the Trust Indenture Act. 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: Michael J. Majchrzak FCC National Bank 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: 30 (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 Holders of a Majority in liquidation amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and (b) (i) The Trustee that acts as Property Trustee shall not be removed in accordance with Section 5.6(a) until a Successor Property Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Regular Trustees and the Sponsor; and (ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with 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 31 (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 Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee as the case may be as the Property Trustee or the Delaware Trustee delivers an instrument of resignation in accordance with this Section 5.6. (e) If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument of resignation, the resigning Property Trustee or Delaware Trustee, as applicable, may petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee. Such court may thereupon, after 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. 32 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 33 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 Preferred 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. 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 preferred securities representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Exhibit A (the "Preferred Securities") and one class of common securities representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Exhibit A (the "Common Securities"). The Trust shall issue no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities. (b) The Certificates shall be signed on behalf of the Trust by the Regular Trustees (or if there are more than two Regular Trustees by any two of the Regular Trustees). 34 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 with any rule or regulation of any stock exchange on which Trust Securities may be listed, 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 Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration. 35 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 or Regulatory Event pursuant to which the Trust shall have been dissolved in accordance with the terms of the Trust Securities and all of the Notes and/or Depositary Shares, as the case may be, 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; or (vii) December 31, 2050. (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. 36 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, Preferred Securities shall be freely transferable. (c) Subject to this Article IX, the Sponsor and any Related Party may only transfer Common Securities to the Sponsor or a Related Party of the Sponsor; provided that, any such transfer is subject to the 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. 37 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 Preferred Securities, the Preferred Securities Certificates, on original issuance, will be issued in the form of one or more, fully registered, global Preferred Security Certificates (each a "Global Certificate"), to be delivered to DTC, the initial 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 Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7: (a) the provisions of this Section 9.4 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the 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 Preferred Securities and the sole Holder of the Global Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of the Declaration, the provisions of this Section 9.4 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Depositary and/or the Depositary Participants and receive and transmit payments of Distributions on 38 the Global Certificates to such Depositary Participants. DTC will make book entry transfers among the Depositary Participants. Section 9.5 Notices to Depositary. --------------------- Whenever a notice or other communication to the Preferred Security Holder is required under this Declaration, unless and until Definitive Preferred Security Certificates shall have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7 the Regular Trustees shall give all such notices and communications specified herein to be given to the Preferred Security Holders to the Depositary, and shall have no notice obligations to the Preferred 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 Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a successor Depositary with respect to such Preferred Securities. Section 9.7 Definitive Preferred Security Certificates. ------------------------------------------ If: (a) a Depositary elects to discontinue its services as securities depositary with respect to the Preferred 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 Preferred Securities, then: (c) Definitive Preferred Security Certificates shall be prepared by the Regular Trustees on behalf of the Trust with respect to such Preferred Securities; and (d) upon surrender of the Global Certificates by the Depositary, accompanied by registration instructions, the Regular Trustees shall cause Definitive Certificates to be delivered to Preferred Security Beneficial Owners in accordance with the instructions of the 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 Preferred Security Certificates shall be printed, lithographed or engraved 39 or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Preferred Securities may be listed, or to conform to usage. Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates. ------------------------------------------------- If: (a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and (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 Preferred Securities Guarantee, the Common Securities Guarantee and the terms of the Trust Securities the Sponsor shall not be: 40 (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 Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. Section 10.2 Exculpation. ----------- (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence (or, in the case of the Property Trustee, negligence) or willful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Trust Securities might properly be paid. 41 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 generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (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- 42 tion to any interest of or factors affecting the Trust or any other Person; or (ii) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Declaration or by applicable law. Section 10.4 Indemnification. --------------- (a) 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 (or, in the case of the Property Trustee, 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 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 indemnification shall survive the termination of this Declaration. 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 43 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 transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year 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 44 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 45 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: (i) the Regular Trustees (or, if there are more than two Regular Trustees a majority of the Regular Trustees); (ii) if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee; and (iii) if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee; (b) No amendment shall be made, and any 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, obligations or immunities of the Property Trustee, the Property Trustee shall have first received: (A) an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the 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 46 (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 Holders of a Majority in liquidation amount of the Common Securities and; (f) the rights of the Holders of the Common Securities under Article V to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in liquidation amount of the Common Securities; and (g) 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 47 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, the terms of the Trust Securities or the rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of 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 or the rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of 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 48 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, the terms of the Trust Securities, the Trust Indenture Act or the listing rules of any stock exchange, the NASDAQ National Market System or other organization on which the Preferred Securities are then listed or trading, otherwise provides, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of 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 49 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 corporation 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 its principal place of business in Illinois. (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. 50 (e) The Property Trustee, pursuant to the Declaration, shall hold legal title and a valid ownership interest in the Notes. 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: 51 (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 I 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. 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. ------------------------ 52 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. 53 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 /s/ Carl F. Geuther J. LANCE ERIKSON, as Trustee /s/ J. Lance Erikson BRUCE F. ANTENBERG, as Trustee /s/ Bruce F. Antenberg MICHAEL J. MAJCHRZAK, as Delaware Trustee /s/ Michael J. Majchrzak THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee By: /s/ John R. Prendiville Name: John R. Prendiville Title: Vice President GREAT WESTERN FINANCIAL CORPORATION, as Sponsor By: /s/ J. Lance Erikson Name: J. Lance Erikson Title: Executive Vice President, Secretary and General Counsel 54 EXHIBIT A TERMS OF 8-1/4% TRUST ORIGINATED PREFERRED SECURITIES 8-1/4% TRUST ORIGINATED COMMON SECURITIES Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of December 6, 1995 (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and the Common Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the Prospectus referred to below): 1. Designation and Number. ---------------------- (a) "Preferred Securities." 4,000,000 Preferred Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of One Hundred Million Dollars ($100,000,000) and a liquidation amount with respect to the assets of the Trust of $25 per Preferred Security, are hereby designated for the purposes of identification only as "8-1/4% Trust Originated Preferred Securities/SM/ (TOPrS/SM/)" (the "Preferred Securities"). The Certificates evidencing the Preferred 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 or to conform to the rules of any stock exchange on which the Preferred Securities are listed. (b) "Common Securities." 123,712 Common Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of Three Million Ninety Two Thousand Eight Hundred Dollars ($3,092,800) and a liquidation amount with respect to the assets of the Trust of $25 per Common Security, are hereby designated for the purposes of identification only as "8-1/4% Trust Originated Common Securities" (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 8-1/4% (the "Coupon Rate") A-1 of the stated liquidation amount of $25 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 quarter will bear interest thereon compounded quarterly 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 quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, 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 December 14, 1995, and will be payable quarterly in arrears, on March 31, June 30, September 30, and December 31 of each year (each a "Distribution Date") to the Holders of record on the applicable record date, commencing on December 31, 1995, 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 20 consecutive quarters (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, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the 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 20 consecutive quarters. 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. A-2 (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 Preferred Securities remain in book- entry only form, the relevant record dates shall be one Business Day prior to the relevant payment dates which payment dates 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 Subordinated 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 Preferred Securities will be made as described under the heading "Description of the Offered Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus Supplement dated December 6, 1995 (the "Prospectus Supplement"), to the Prospectus dated December 6, 1995 (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 Preferred Securities. If the Preferred Securities shall not continue to remain in book-entry only form, the relevant record dates for the Preferred Securities shall conform to the rules of any securities exchange on which the securities are listed and, if none, shall be selected by the Regular Trustees, which dates shall be 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. A-3 (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 $25 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 and/or Depositary Shares in an aggregate stated liquidation amount, as applicable, equal to the aggregate stated liquidation amount of such Trust Securities and bearing accrued and unpaid interest or dividends, as the case may be, 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 of $25 per Trust Security plus an amount equal to accrued and unpaid Distributions thereon at the date of the redemption, payable in cash (the "Redemption Price"). 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 A-4 Preferred Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Paragraph 4(h)(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 A-5 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 A-6 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 Preferred 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 occurrence of a Regulatory Event (as defined below), the Note Issuer may, for a period of 90 days following written notice to the Regular Trustees of the occurrence of such Regulatory Event, notify the Regular Trustees in writing that the Note Issuer has elected to reduce the annual interest rate on all the outstanding Notes by 50 basis points effective upon distribution of the Notes as adjusted to the Holders of the Trust Securities; provided, however, that if the Note Issuer has elected to defer payments of interest to the holders of the Notes as set in Paragraph 2(b) above, all deferred Distributions and accrued interest thereon shall be paid to the holders of the Trust Securities before such adjusted Notes are distributed. If notice of the Note Issuer's election as specified above is not given within the 90-day period, the Note Issuer will forfeit the right to make such election. If the Note Issuer elects to lower the annual interest rate on the Notes as described above, at least 30 but not more than 60 days prior to the distribution of the adjusted Notes, notice of such election will be sent to the Holders of the Trust Securities. Such notice will state (i) that a Regulatory Event has occurred and that the Note Issuer has elected to reduce the interest rate on the Notes, (ii) that on the specified date (which A-7 shall be the next Distribution Date which is at least 30 days after the date of such notice), the adjusted Notes will be converted into Depositary Shares with an aggregate liquidation preference equal to the principal amount of the adjusted Notes converted, unless prior to such conversion the Holder of Trust Securities elects not to convert such Holder's adjusted Notes, in which case such Holder will be entitled to receive the adjusted Notes, (iii) that the Trust will be dissolved and that the Holders of Trust Securities will receive adjusted Notes and/or Depositary Shares, as the case may be, (iv) the date upon which the adjusted Notes and/or Depositary Shares, as the case may be, will be distributed, and (v) the procedure for a Holder of Trust Securities to exercise his or her right not to have the adjusted Notes to which such Holder is entitled converted to Depositary Shares. If the Note Issuer elects to lower the annual interest rate on the Notes, on the next Distribution Date which is at least 30 days after notice to the Holders of Trust Securities as provided above, (i) the adjusted Notes will be converted into Depositary Shares having a liquidation preference equal to the principal amount of the adjusted Notes converted, unless prior to such conversion the Holder of Trust Securities elects not to convert such Holder's adjusted Notes, in which event such Holder will be entitled to receive the adjusted Notes and (ii) the Trust shall be dissolved, with the result that the adjusted Notes and/or the Depositary Shares, as the case may be, will be distributed to the Holders of the Trust Securities in lieu of any cash distribution. After the date for any distribution of adjusted Notes upon dissolution of the Trust, (i) the Trust Securities will no longer be deemed to be outstanding, (ii) the Depositary or its nominee, as the record holder of the Trust Securities, will receive a registered global certificate or certificates representing the adjusted Notes or the Depositary Shares, as the case may be, to be delivered upon such distribution and (iii) any certificates representing Trust Securities not held by the Depositary or its nominee will be deemed to represent adjusted Notes having an aggregate principal amount or Depositary Shares having an aggregate stated liquidation amount, as the case may be, 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. "Regulatory Event" means that (i) the Note Issuer (or its successor) is, becomes or pursuant to law or A-8 regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 capital applied as if the Note Issuer (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 the date of this Declaration) or its then equivalent ("Tier 1 Capital"), and (ii) as a result, based upon the Note Issuer's (or its successor's) then existing capital ratios, the Note Issuer (or its successor) would, within 180 days, fail to be "well capitalized" (as that term is defined in 12 CFR (S)208.33(b)(1) of the regulations promulgated by the Board of Governors of the Federal Reserve System as if the Note Issuer (or its successor) were a state member bank, but using the definition of Tier 1 Capital applied to bank holding companies or, in the event that section is eliminated, to a reasonably equivalent standard applicable to bank holding companies). The Regulatory Event will be deemed to occur on the date the condition in clause (ii) is satisfied. (e) Note Issuer shall promptly notify the Regular Trustees of the occurrence of a Regulatory Redemption Event. During a period of 90 days after the occurrence of a Regulatory Redemption Event, the Note Issuer may elect to redeem the Notes in whole only. If the Note Issuer elects to redeem the Notes in whole for cash, the written notice of its election shall specify a date for such redemption, which shall not be less than 30 nor more than 60 days after such notice. "Regulatory Redemption Event" means that (i) the Note Issuer (or its successor) is, becomes or pursuant to law or regulation will become within 180 days, subject to capital requirements under which all or any portion of the Preferred Securities would not constitute Tier 1 Capital and (ii) (a) a bank, savings and loan association, savings bank, or bank or savings and loan holding company (each a "Depository Institution") has issued or has been the sponsor of a trust or other entity (including but not limited to a general or limited partnership or limited liability company) that has issued securities that constitute Tier 1 Capital, and which issued securities, or the securities underlying such issued securities, are to be treated by such Depository Institution as indebtedness for U.S. federal income tax purposes, as evidenced by the disclosure document pursuant to which such securities were offered, and (b) the Note Issuer (or its successor) has within 90 days after the later of such issuance or the satisfaction of the condition set forth A-9 in clause (i) above, received an opinion of independent counsel experienced in such matters that securities having substantially identical terms (except for rate, maturity and payment dates), if issued by the Note Issuer (or its successor) or by a Note Issuer (or its successor) sponsored trust or other entity, at least 66-2/3% of which should constitute Tier 1 Capital for the Note Issuer (or its successor) if the securities issued by such Depository Institution constituted Tier 1 Capital and such securities should be treated as indebtedness for U.S. federal income tax purposes. (f) 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 quarterly Distribution periods terminating on or before the date of redemption. (g) If the Notes and/or Depositary Shares are distributed to Holders of the Trust Securities, pursuant to the terms of the Indenture, the Note Issuer will use its best efforts to have the Notes or Depositary Shares, as the case may be, listed on the New York Stock Exchange or on such other exchange, the NASDAQ National Market System or other organization as the Preferred Securities were listed immediately prior to the distribution of the Notes or Depositary Shares, as the case may be; provided, however, that if the Note Issuer has given notice of its intention to redeem the Notes, the Note Issuer will not be under an obligation to use its best efforts to have the Notes listed. (h) 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(h)(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 A-10 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 Preferred 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 Preferred 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 Preferred Securities, the Depositary will adjust the amount of the interest of each Depositary Participant to be redeemed to avoid such fractional interests; provided, however, if the partial redemption of the Preferred Securities would result in the delisting of the Preferred Securities from any exchange on which they are then listed, the Preferred Securities may only be redeemed in whole. (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 Preferred Securities are in book-entry only form, with respect to the Preferred Securities, by 12:00 noon, New York City time, on the redemption date, provided that the 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 Preferred Securities and will give the Depositary irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities, and (B) with respect to Preferred 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 A-11 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 Preferred 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 Preferred Securities, the Depositary or its nominee (or any successor Depositary or its nominee) if the Global Certificates have been issued or, if Definitive Preferred Security Certificates have been issued, to the Holder thereof, and (B) in respect of the Common Securities to the Holder thereof. A-12 (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 Preferred Securities by tender, in the open market or by private agreement. 5. Voting Rights - Preferred Securities. ------------------------------------ (a) Except as provided under paragraphs 5(b) and 7 and as otherwise required by law and the Declaration, the Holders of the Preferred Securities will have no voting rights. (b) Subject to the requirements set forth in this paragraph, the Holders of a majority in liquidation amount of the Preferred Securities, voting separately as a class, may direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee, or direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including (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 Preferred 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 Preferred Securities under this paragraph unless the A-13 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 Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which the written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or to distribute the Notes or Depositary Shares in accordance with the Declaration and the terms of the Trust Securities. Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding. A-14 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 Holders of the Common Securities will have no voting rights. (b) The Holders of the Common Securities are entitled, in accordance with Article V of the Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees. (c) Subject to Section 2.6 of the Declaration and only after an Event of Default with respect to the Preferred Securities has been cured, waived or otherwise eliminated and to the requirements of the second to last sentence of this paragraph, the Holders of a Majority in liquidation amount of the Common Securities, voting separately as a class, may direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or 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 Holders 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 Preferred 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 Holders 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 A-15 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 Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the 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 A-16 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 Preferred Securities or only the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 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 Preferred Securities Guarantee and the Common Securities Guarantee is required under the Indenture or the applicable Guarantee Agreement with respect to any amendment, modification or termination on the Indenture, the Notes, the Preferred Securities Guarantees 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 Agreement 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 Preferred Securities pro rata according to the aggregate A-17 liquidation amount of Preferred Securities held by the relevant Holder relative to the aggregate liquidation amount of all Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding. 9. Ranking. ------- The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the Common Securities except that, where an Event of Default occurs and is continuing hereunder, the rights of Holders of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred Securities. 10. Listing. ------- The Regular Trustees shall use their best efforts to cause the Preferred Securities to be listed for quotation on the New York Stock Exchange. 11. Acceptance of Trust Securities Guarantee and Indenture. ------------------------------------------------------ Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees to the provisions of the Preferred Securities Guarantee and the Common Securities Guarantee, respectively, including the subordination provisions therein and to the provisions of the Indenture. 12. No Preemptive Rights. -------------------- The Holders of the Trust Securities shall have no preemptive rights to subscribe for any additional securities. 13. Miscellaneous. ------------- These terms constitute a part of the Declaration. The Sponsor will provide a copy of the Declaration, the Preferred 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. A-18 ANNEX I IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This Preferred Security is a Global Certificate within the meaning of the Declaration hereinafter referred to and is registered in the name of The Depository Trust Company, a New York Corporation (the "Depositary") or a nominee of the Depositary. This Preferred Security is exchangeable for Preferred Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Declaration and no transfer of this Preferred Security (other than a transfer of this Preferred Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances. Unless this Preferred Security is presented by an authorized representative of the Depositary to the Trust or its agent for registration of transfer, exchange or payment, and any Preferred Security issued is registered in the name of Cede & Co. or such other name as 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 Preferred Securities CUSIP NO.______________ Certificate Evidencing Preferred Securities of GREAT WESTERN FINANCIAL TRUST I Preferred Securities (liquidation amount $25 per Preferred Security) GREAT WESTERN FINANCIAL TRUST I, 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 preferred securities of the Trust representing undivided beneficial interests in the assets of the Trust designated the 8-1/4% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized I-1 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 Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of December 6, 1995, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Preferred Securities as set forth in 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 Preferred Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to a Holder without charge upon written request to the 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 Preferred Securities as evidence of indirect beneficial ownership in the Notes. IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day of December, 1995. J. LANCE ERIKSON, as Trustee ___________________________________ BRUCE F. ANTENBERG, as Trustee ___________________________________ I-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Insert assignee's social security or tax identification number) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Insert address and zip code of assignee) and irrevocably appoints) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date:_________________________ Signature:___________________________________ (Sign exactly as your name appears on the other side of this Preferred Security Certificate) 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. I-3 ANNEX II Certificate Number Number of Common Securities Certificate Evidencing Common Securities of GREAT WESTERN FINANCIAL TRUST I Common Securities (liquidation amount $25 per Common Security) GREAT WESTERN FINANCIAL TRUST I, 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 8-1/4% Trust Originated Common Securities (liquidation amount $25 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 December 6, 1995, 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. II-1 IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day of December, 1995. J. LANCE ERIKSON, as Trustee ________________________________ BRUCE F. ANTENBERG, as Trustee ________________________________ II-2 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. II-3 EX-4.4 6 PREFERRED SECURITIES GUARANTEE AGREEMENT EXHIBIT 4.4 ======================================== PREFERRED SECURITIES GUARANTEE AGREEMENT GREAT WESTERN FINANCIAL TRUST I Dated as of December 6, 1995 ======================================== 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 Preferred Guarantee Trustee..... 6 ------------------------------------------ Section 2.4. Periodic Reports to Preferred 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 PREFERRED GUARANTEE TRUSTEE........... 7 Section 3.1. Powers and Duties of the Preferred Guarantee -------------------------------------------- Trustee........................................ 7 ------- Section 3.2. Certain Rights of Preferred Guarantee Trustee.. 9 ---------------------------------------------- Section 3.3. Not Responsible for Recitals or Issuance of ------------------------------------------- Guarantee...................................... 12 --------- ARTICLE IV PREFERRED GUARANTEE TRUSTEE........... 12 Section 4.1. Preferred Guarantee Trustee; Eligibility....... 12 ---------------------------------------- Section 4.2. Appointment Removal and Resignation of -------------------------------------- Preferred Guarantee Trustees................... 13 ---------------------------- ARTICLE V GUARANTEE.................... 14 Section 5.1. Guarantee...................................... 14 --------- 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.............................. 16 ----------------- Section 5.6. Guarantee of Payment........................... 16 -------------------- Section 5.7. Subrogation.................................... 16 ----------- Section 5.8. Independent Obligations........................ 16 ----------------------- ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION...... 17 Section 6.1. Limitation of Transactions..................... 17 -------------------------- Section 6.2. Ranking........................................ 17 -------
i ARTICLE VII TERMINATION................... 17 Section 7.1. Termination.................................... 17 ----------- ARTICLE VIII INDEMNIFICATION................. 18 Section 8.1. Exculpation.................................... 18 ----------- Section 8.2. Indemnification................................ 18 --------------- ARTICLE IX MISCELLANEOUS................... 19 Section 9.1. Successors and Assigns......................... 19 ---------------------- Section 9.2. Amendments..................................... 19 ---------- Section 9.3. Notices........................................ 19 ------- Section 9.4. Benefit........................................ 20 ------- Section 9.5. Governing Law.................................. 20 -------------
ii PREFERRED SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of December 6, 1995, is executed and delivered by Great Western Financial Corporation, a Delaware corporation (the "Guarantor"), and The First National Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of Great Western Financial Trust I, a Delaware statutory business trust (the "Issuer"). RECITALS WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of December 6, 1995, 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 $100 million aggregate stated liquidation amount of Preferred Securities designated the 8-1/4% Trust Originated Preferred Securities (the "Preferred Securities"); WHEREAS, as incentive for the Holders (as hereinafter defined) to purchase the Preferred 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 Preferred 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 Preferred Securities to receive Guarantee Payments under this Guarantee Agreement. NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders. 1 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. "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 Preferred 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. 2 "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 Preferred 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 Preferred 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 on the Notes with respect to any Preferred 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 and/or Depositary Shares to the Holders in exchange for Preferred Securities as provided in the Declaration or the redemption of all of the Preferred Securities upon the maturity or redemption of the Notes), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred 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 Preferred Securities; provided, that, in determining -------- ---- whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives or agents of the Preferred 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, and the Second Supplemental Indenture dated as of December 6, 1995, 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 Preferred Securities, voting separately as a class, of more than 50% of the liquidation amount (including 3 the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all Preferred Securities. "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. "Preferred Guarantee Trustee" means The First National Bank of Chicago until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Preferred Guarantee Trustee. "Responsible Officer" means, with respect to the Preferred Guarantee Trustee, any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or 4 assistant trust officer or any other officer of 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 Preferred Guarantee Trustee" means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, 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 Preferred 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 Preferred Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Preferred Securities ("List of Holders") as of such date, (i) within 14 days after each record date for payment of distributions on the Preferred Securities, and (ii) at any other time within 30 days of receipt by the 5 Guarantor of a written request for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Preferred Guarantee Trustee provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Preferred 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 Preferred Guarantee Trustee. ------------------------------------------ Within 60 days after December 31 of each year, the Preferred Guarantee Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. Section 2.4. Periodic Reports to Preferred Guarantee Trustee. ----------------------------------------------- The Guarantor shall provide to the Preferred Guarantee Trustee such documents, reports and information as required by Section 314 (if any) and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. Section 2.5. Evidence of Compliance with Conditions Precedent. ------------------------------------------------ The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this 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 Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default 6 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 Preferred Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Preferred Securities, notices of all Events of Default known to the Preferred Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, that, the Preferred Guarantee -------- ---- Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Preferred Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities. (b) The Preferred Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Preferred Guarantee Trustee shall have received written notice, 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 PREFERRED GUARANTEE TRUSTEE Section 3.1. Powers and Duties of the Preferred Guarantee Trustee. ---------------------------------------------------- (a) This Guarantee Agreement shall be held by the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred Securities, and the Preferred Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except a Holder of Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee 7 Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The right, title and interest of the Preferred Guarantee Trustee shall automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Preferred Guarantee Trustee. (b) If an Event of Default has occurred and is continuing, the Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders of the Preferred Securities. (c) The Preferred Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Preferred Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Preferred 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 Preferred Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Preferred Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Preferred Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement, and no implied covenants or obligations shall be read into this Guarantee Agreement against the Preferred Guarantee Trustee; and 8 (B) in the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Preferred Guarantee Trustee and 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 Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Guarantee Trustee, unless it shall be proved that the Preferred Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Preferred Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in liquidation amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Preferred Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Preferred Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. Section 3.2. Certain Rights of Preferred Guarantee Trustee. --------------------------------------------- (a) Subject to the provisions of Section 3.1: 9 (i) The Preferred 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 Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Preferred Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor. (iv) The Preferred Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or registration thereof). (v) The Preferred Guarantee Trustee may consult with counsel, and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (vi) The Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in 10 the position of the Preferred 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 Preferred Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. (vii) The Preferred Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Preferred Guarantee Trustee, in its discretion may make such further inquiry or investigation into such facts or matters as it may see fit. (viii) The Preferred Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Preferred Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (ix) Any action taken by the Preferred Guarantee Trustee or its agents hereunder shall bind the Holders of the Preferred Securities, and the signature of the Preferred Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Preferred Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Guarantee Agreement, both of which shall be conclusively evidenced by the Preferred Guarantee Trustee's or its agent's taking such action. (x) Whenever in the administration of this Guarantee Agreement the Preferred Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (i) may request instructions from the Holders of the Preferred Securities, 11 (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 Preferred Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Preferred Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Preferred Guarantee Trustee shall be construed to be a duty. Section 3.3. Not Responsible for Recitals or Issuance of Guarantee. ----------------------------------------------------- The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee Agreement. ARTICLE IV PREFERRED GUARANTEE TRUSTEE Section 4.1. Preferred Guarantee Trustee; Eligibility. ---------------------------------------- (a) There shall at all times be a Preferred Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the 12 requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Preferred Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. Section 4.2. Appointment Removal and Resignation of Preferred Guarantee ---------------------------------------------------------- Trustees. -------- (a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Preferred Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor. (c) The Preferred Guarantee Trustee appointed to office shall hold office until a Successor Preferred Guarantee Trustee shall have been appointed or until its removal or resignation. The Preferred Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Guarantee Trustee. (d) If no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in 13 this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Preferred Guarantee Trustee may petition any court of competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee. 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 Preferred 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: 14 (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sums payable that results from the extension of any interest payment period on the 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 Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) invalidity of, or defect or deficiency in the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) 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. 15 Section 5.5. Rights of Holders. ----------------- (a) The Holders of a Majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting of any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of this Guarantee Agreement or to direct the exercise of any trust or power conferred upon the Preferred Guarantee Trustee under this Guarantee Agreement. (b) Any Holder of Preferred 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 Preferred 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 Preferred 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 Preferred Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.4 hereof. 16 ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION Section 6.1. Limitation of Transactions. -------------------------- So long as any Preferred Securities remain outstanding, if there shall have occurred an Event of Default 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 Preferred Securities, (ii) upon the distribution of the Notes and/or Depositary Shares to the Holders of all Preferred 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 17 Preferred Securities must restore payment of any sums paid under the Preferred Securities or under this Preferred Securities Guarantee. ARTICLE VIII INDEMNIFICATION Section 8.1. Exculpation. ----------- (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this 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 Preferred 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. 18 (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). 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 Preferred 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 Preferred 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 Preferred Guarantee Trustee, at the Preferred Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Guarantee Trustee may give notice of to the Holders of the Preferred Securities): The First National Bank of Chicago One First National Plaza, Suite 0126 Chicago, Illinois 60670-0126 19 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 Preferred Securities): Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Telecopy No. (818) 775-3434 (c) If given to any Holder of Preferred 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 Preferred Securities and, subject to Section 3.1(a), is not separately transferable from the Preferred 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. 20 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: /s/ J. Lance Erikson Name: J. Lance Erikson Title: Executive Vice President, Secretary and General Counsel THE FIRST NATIONAL BANK OF CHICAGO, as Preferred Guarantee Trustee By:/s/ John R. Prendiville Name: John R. Prendiville Title: Vice President 21 EX-5 7 OPINION - VALIDITY EXHIBIT 5 December 12, 1995 Great Western Financial Trust I c/o Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Re: Great Western Financial Corporation; Current Report on Form 8-K ------------------------------------ Ladies and Gentlemen: We have acted as special counsel to Great Western Financial Trust I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), in connection with the Registration Statement on Form S-3 (Registration No. 33-63057), filed by Great Western Financial Corporation, a Delaware corporation (the "Company"), and the Trust with the Securities and Exchange Commission (the "Commission") on September 28, 1995 under the Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto, filed with the Commission on November 14, 1995, Amendment No. 2 thereto, filed with the Commission on November 28, 1995, and Amendment No. 3 thereto, filed with the Commission on November 30, 1995 (such Registration Statement, as so amended, being hereinafter referred to as the "Registration Statement"), relating to, among other things, the registration under the Act of 4,000,000 8 1/4% Preferred Securities (the "Preferred Securities") of the Trust. The Preferred Securities are to be issued pursuant to the Amended and Restated Declaration of Trust (the "Declaration") among the Company, as sponsor, The First National Bank of Chicago, as property trustee (the "Property Trustee"), Michael J. Majchrzak, as Delaware Great Western Financial Trust I December 12, 1995 Page 2 trustee (the "Delaware Trustee"), and Carl F. Geuther, J. Lance Erikson and Bruce F. Antenberg, as regular trustees (together, the "Regular Trustees"). Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Registration Statement. This opinion is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the certificate of trust relating to the Trust filed by the Delaware Trustee and the Regular Trustees with the Secretary of State of the State of Delaware on September 27, 1995; (ii) the form of the Declaration (including the form of the terms of the Preferred Securities annexed thereto); (iii) the form of the Preferred Securities; and (iv) the Purchase Agreement (the "Purchase Agreement"), dated December 6, 1995, between the Company, the Trust and the representatives of the several underwriters set forth therein. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies. In making our examination of documents executed by parties other than the Trust, we have assumed that such parties had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and that such documents constitute valid and binding obligations of such parties. In addition, we have assumed that each of the Declaration and the Preferred Securities as executed will be in substantially the form reviewed by us. As to any facts Great Western Financial Trust I December 12, 1995 Page 3 material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers, trustees and other representatives of the Company, the Trust and others. Our opinion is conditioned on, among other things, the initial and continuing accuracy of the facts, information, covenants and representations set forth in the documents referred to above and the statements and representations made by the Company and the Trust. Members of our firm are admitted to the bar in the State of Delaware, and we express no opinion as to the laws of any other jurisdiction. Based on and subject to the foregoing and to the other qualifications and limitations set forth herein, we are of the opinion that the Preferred Securities, when the Declaration is executed and delivered and the terms of the Preferred Securities are established in accordance with the terms of the Declaration, will be duly authorized for issuance and, when issued and executed in accordance with the Declaration and delivered and paid for as set forth in the Purchase Agreement, will be validly issued, fully paid and nonassessable, representing undivided beneficial interests in the assets of Trust. We bring to your attention, however, that the Preferred Securities holders may be obligated, pursuant to the Trust Declaration, to (i) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers of Preferred Securities and (ii) provide security and indemnity in connection with the requests of or directions to the Property Trustee to exercise its rights and powers under the Declaration. This opinion is furnished to you solely for your benefit in connection with the Registration Statement and, except as set forth in the next sentence, is not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon by any other person for any purpose without our prior written consent. We also consent to the incorporation by reference into the Registration Statement of this opinion and the use of Great Western Financial Trust I December 12, 1995 Page 4 our name under the heading "Legal Matters" in the Prospectus Supplement, dated December 6, 1995, to the Prospectus, dated December 6, 1995. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated and we disclaim any undertaking to advise you of any subsequent changes of the facts stated or assumed herein or any subsequent changes in applicable law. Very truly yours, EX-8 8 OPINION - FEDERAL TAX MATTERS EXHIBIT 8 December 12, 1995 Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Great Western Financial Trust I c/o Great Western Financial Corporation 9200 Oakdale Avenue Chatsworth, California 91311 Re: Great Western Financial Corporation Great Western Financial Trust I Registration No. 33-63057 of Form S-3 ------------------------------------- Ladies and Gentlemen: We have acted as special tax counsel for Great Western Financial Corporation, a Delaware Corporation (the "Company"), and Great Western Financial Trust I, a statutory business trust organized under the Business Trust Act of the State of Delaware (12 Del. Code Ann., tit. 12, (S)(S) 3801, et seq.) (the "Trust"), in connection with the Registration Statement on Form S-3 (Registration No. 33-63057), filed with the Securities and Exchange Commission (the "Commission") on September 28, 1995 under the Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto, filed with the Commission on November 14, 1995, Amendment No. 2 thereto, filed with the Commission on November 28, 1995, and Amendment No. 3 thereto, filed with the Commission on November 30, 1995 (such Registration Statement, as so amended, being hereinafter referred to as the "Registration Statement"), relating to, among other things, the registration under the Act of 4,000,000 8 1/4% Trust Originated Preferred Securities (liquidation amount of $25 per preferred secu- Great Western Financial Corporation December 12, 1995 Page 2 rity), representing preferred undivided beneficial interests in the assets of the Trust (the "Preferred Securities"). The Preferred Securities are guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise pursuant to the Preferred Securities Guarantee Agreement, to be dated as of December 6, 1995 (the "Preferred Securities Guarantee Agreement"), between the Company and The First National Bank of Chicago, as guarantee trustee, for the benefit of the holders of the Preferred Securities. In connection with the issuance of the Preferred Securities, the Trust is also issuing 123,712 of its 8 1/4% common securities (liquidation amount of $25 per common security) (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities"), representing common undivided beneficial interests in the assets of the Trust. The Common Securities are also guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise pursuant to the Common Securities Guarantee Agreement to be dated as of December 6, 1995 (the "Common Securities Guarantee Agreement"), by the Company for the benefit of the holders of the Common Securities. The entire proceeds from the sale of the Trust Securities are to be used by the Trust to purchase an aggregate principal amount of $103,092,800 of 8 1/4% subordinated deferrable interest notes due December 31, 2025 (the "Subordinated Debt Securities"), to be issued by the Company. The Trust Securities are to be issued pursuant to the Amended and Restated Declaration of Trust, to be dated as of December 6, 1995 (the "Declaration") among the Company, as sponsor, The First National Bank of Chicago, as property trustee (in such capacity, the "Property Trustee"), Michael J. Majchrzak, as Delaware Great Western Financial Corporation December 12, 1995 Page 3 trustee (the "Delaware Trustee"), Carl F. Geuther, J. Lance Erikson and Bruce F. Antenberg, as regular trustees (together, the "Regular Trustees"), and the holders from time to time of undivided beneficial interests in the assets of the Trust. The Subordinated Debt Securities are to be issued pursuant to an indenture, dated as of September 12, 1990, (the "Base Indenture"), between the Company and Harris Trust and Savings Bank, as debt trustee (in such capacity, the "Debt Trustee"), the First Supplemental Indenture to the Base Indenture, dated as of April 30, 1993, and the Second Supplemental Indenture to the Base Indenture, to be dated as of December 6, 1995 (such supplemental indentures, together with the Base Indenture, the "Indenture"), between the Company and the Debt Trustee. Upon the occurrence of a Regulatory Event (as defined in the Prospectus Supplement defined herein), the Company may elect to lower the interest rate on the Subordinated Debt Securities by 50 basis points, (the "Adjusted Subordinated Debt Securities"); distribute to holders of the Preferred Securities, depending on such holders' election, the Adjusted Subordinated Debt Securities or the Depositary Shares (as defined in the Prospectus Supplement); and dissolve the Trust. This opinion is being furnished in accordance with the requirements of Item 601(b)(8) of Regulation S-K under the Securities Act of 1933, as amended (the "Act"). Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement, dated December 6, 1995, (the "Purchase Agreement"), by and among the Company, the Trust, and the Underwriters named therein, except that reference herein to any document shall mean such document as in effect on the date hereof. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement; (ii) the Prospectus, dated December 6, 1995, as supplemented by the Prospectus Supplement, dated December 6, 1995 (the "Prospectus Supplement"), as supplemented by the Prospectus Supplement, dated December 11, 1995, relating to the Great Western Financial Corporation December 12, 1995 Page 4 Preferred Securities, the Preferred Securities Guarantee Agreement, and the Subordinated Debt Securities, filed with the Commission pursuant to Rule 424(b) of its General Rules and Regulations under the Act; (iii) the certificate of trust filed by the Trust with the Secretary of State of the State of Delaware on September 27, 1995; (iv) the form of the Declaration (including the designation of the terms of the Preferred Securities and the Common Securities); (v) the form of the Preferred Securities and Common Securities and specimen certificates thereof; (vi) the form of the Preferred Securities Guarantee Agreement and the Common Securities Guarantee Agreement; (vii) the form of the Indenture; (viii) the form of the Subordinated Debt Securities and a specimen certificate thereof; (ix) an executed copy of the Purchase Agreement relating to the Preferred Securities; (x) an executed copy of the Common Securities Purchase Agreement, dated as of December 6, 1995, relating to the Common Securities, between the Company and the Trust; (xi) the letter from Merrill Lynch & Co. regarding certain possible consequences of a Regulatory Event (as defined in the Prospectus Supplement) (the "Merrill Letter"); and (xii) the form of the certificates of each of the Company and the Trust, each to be dated as of December 14, 1995, delivered pursuant to Section 5(c) of the Purchase Agreement (collectively, the documents set forth in items (i) - (xii) are the "Operative Documents"). We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such other documents, certificates, and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all Great Western Financial Corporation December 12, 1995 Page 5 signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such latter documents. In making our examination of documents executed, or to be executed by parties other than the Trust, we have assumed that such parties had, or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and that such documents constitute, or will constitute, valid and binding obligations of such parties. As to any facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers, trustees, and other representatives of the Trust, the Company, the Property Trustee, the Delaware Trustee, the Regular Trustees, and others, including the Merrill Letter. Our opinion is conditioned on, among other things, the initial and continuing accuracy of the facts, information, covenants, and representations set forth in the documents referred to above and the statements and representations made by the Company, the Trust (including representatives of the Trust and the Trustees thereunder), and Merrill Lynch & Co. Our opinion is also conditioned on the premise that there will be no material changes to the Operative Documents and that the Operative Documents that have yet to be executed will be executed in the form that we have reviewed. This opinion is furnished with the understanding that it will be reconfirmed at the closing of the sale of the Preferred Securities. Great Western Financial Corporation December 12, 1995 Page 6 In rendering our opinion, we have considered the provisions of the Internal Revenue Code of 1986, as amended, Treasury regulations (proposed, temporary, and final) promulgated thereunder, judicial decisions and Internal Revenue Service pronouncements all as of the date hereof, and all of which are subject to change, which changes may be retroactively applied. A change in the authorities upon which our opinion is based could affect our conclusions. There can be no assurances, moreover, that any of the opinions expressed herein will be accepted by the Internal Revenue Service or, if challenged, by a court. Based solely upon the foregoing, we are of the opinion that under current United States federal income tax law: (1) The Trust will be classified as a grantor trust and not as an association taxable as a corporation. Accordingly, for United States federal income tax purposes, each holder of Preferred Securities will generally be considered the owner of an undivided interest in the Subordinated Debt Securities, and each holder will be required to include in its gross income any original issue discount accrued with respect to its allocable share of those Subordinated Debt Securities. (2) The Subordinated Debt Securities will be classified for United States federal income tax purposes as indebtedness of the Company. (3) Although the discussion set forth in the Prospectus Supplement under the heading "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" as supplemented by the Prospectus Supplement, dated December 11, 1995 does not purport to discuss all possible United States Great Western Financial Corporation December 12, 1995 Page 7 federal income tax consequences of the purchase, ownership, and disposition of the Preferred Securities, in our opinion 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 Preferred Securities under current law. We note that based on a Department of the Treasury News Release issued on December 11, 1995, the recent proposals by the Clinton administration to alter the United States federal income tax treatment of instruments such as the Subordinated Debt Securities will not apply to the Subordinated Debt Securities. Except as set forth above, we express no opinion to any party as to the tax consequences, whether Federal, state, local or foreign, of the issuance of the Subordinated Debt Securities, the Preferred Securities, the Common Securities or any transactions related to or contemplated by such issuance. Great Western Financial Corporation December 12, 1995 Page 8 We hereby consent to the filing of this opinion with the Commission as Exhibit 8 to the Registration Statement. We also consent to the use of our name under the heading "Legal Matters" in the Prospectus Supplement. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the General Rules and Regulations under the Act. The opinion is expressed as of the date hereof unless otherwise expressly stated and we disclaim any undertaking to advise you of any subsequent changes of the facts stated or assumed herein or any subsequent changes in applicable law. Very truly yours, -----END PRIVACY-ENHANCED MESSAGE-----