Document:

Exhibit 10.26

 

Execution Version

 

2010 REFERRAL FEE AGREEMENT

 

This 2010 Referral Fee Agreement (this “Agreement”) is made and entered into this 15th day of June, 2010 (the “Effective Date”), by and between Textura Corporation, a Delaware corporation having a principal place of business at 1405 Lake Cook Road, Deerfield, IL 60015 (“Textura”) and Aon Risk Services Central, Inc., an Illinois corporation having a principal place of business at 200 East Randolph Street, Chicago, IL 60601 and formerly known as Aon Risk Services of Illinois, Inc. (“Aon” and together with Textura, the “Parties” and each a “Party”).

 

Recitals

 

WHEREAS, Textura owns a web-based software application for assisting in the management of construction projects, comprising construction payment management (“CPM”) and pre-qualification management (“PQM”), a technology platform known internally to Textura as the T3 platform (the “Platform”) and any additional features and functionality that the Parties may agree to in a written amendment to this Agreement (all such applications and related services are collectively referred to as the “Software”);

 

WHEREAS, Aon owns a web-based software application titled “Aonchor” for assisting general contractor clients with certain administrative aspects of their Subguard insurance program including Subguard premium calculations (“Aonchor”);

 

WHEREAS, concurrently herewith the Parties are entering into a Software Development and Service Agreement (the “Software Agreement”) under which Textura will perform certain software development, support, maintenance and hosting services to make Aonchor and any other Aon software applications that may be mutually agreed by the Parties in writing under the Software Agreement operable with Textura’s Platform and to make Aonchor and such other Aon software applications available on the Platform to Aon’s customers (Aonchor and such other software are collectively referred to as the “Aon Applications”);

 

WHEREAS, Aon desires to refer certain of Aon’s customers to Textura to license and use the Software and the Aon Applications;

 

WHEREAS, Textura and Aon Risk Services of Illinois, Inc. previously entered into a 2007 Referral Fee Agreement (the “2007 Agreement”); and

 

WHEREAS, the Parties desire to terminate the 2007 Agreement upon execution of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

Agreement

 

Section 1.                                           Defined Terms.  As used in this Agreement, the following terms have the meanings set forth below:

 

 

(a)                                 “Aon” has the meaning set forth in the recitals.

 

(b)                                 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.

 

(c)                                  “Aon Applications” has the meaning set forth in the recitals.

 

(d)                                 “Aon Competitor” has the meaning set forth in Section 9(b).

 

(e)                                  “Aon Risk Services” has the meaning set forth in Section 7(a).

 

(f)                                   “Aonchor” has the meaning set forth in the recitals.

 

(g)                                  “Cash Flow Trigger” has the meaning set forth in Section 3(d)(i)(A).

 

(h)                                 A “Change in Control Event” means the occurrence of any one of the following events: (1) any person or more than one person acting as a group becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of stock of Textura, that together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of stock of Textura (excluding any additional stock acquired by a person or more than one person acting as a group who prior to the acquisition is considered to own more than 50% of the total fair market value or total voting power of such securities); (2) the consummation of a merger or consolidation of Textura with or into any other corporation or any other corporate reorganization if more than 50% of the combined voting power of the voting stock of Textura or such surviving entity (or any parent thereof) outstanding immediately after such merger, consolidation, or reorganization is owned by persons who were not stockholders of Textura immediately prior to such merger, consolidation or reorganization; or (3) the sale or disposition of either all or substantially all of the assets of Textura or all or substantially all of the intellectual property assets of Textura relating to the Software (in one transaction or a series of related transactions), other than a sale or disposition by Textura of such assets from Textura to an Affiliate of Textura.

 

(i)                                     “CPM” has the meaning set forth in the recitals.

 

(j)                                    “Credit Bank Account” has the meaning set forth in Section 3(b).

 

(k)                                 “Credit Bank Account Beginning Balance” has the meaning set forth in Section 3(b).

 

(l)                                     “Credit Bank Account Interest” has the meaning set forth in Section 3(b).

 

(m)                             “Cap” has the meaning set forth in Section 3(d)(iii)

 

(n)                                 “Effective Date” has the meaning set forth in the recitals.

 

(o)                                 “Entity” means a general contractor, developer or owner.

 

(p)                                 “Listed General Contractors” has the meaning set forth in Section 7(b).

 

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(q)                                 “Mid-Level Developer Hour” has the meaning set forth in Section 3(a).

 

(r)                                    “North American Cash Flow Positive Event” has the meaning set forth in Section 3(d)(i)(E).

 

(s)                                   “Platform” has the meaning set forth in the recitals.

 

(t)                                    “PQM” has the meaning set forth in the recitals.

 

(u)                                 “Referral” means any Entity that becomes a new client of Textura for any Textura product or service during the Term of this Agreement:

 

(i)                                     where such Entity is or becomes a user of Aonchor or an Aon Application during the tem.( of this Agreement; or

 

(ii)                                  after being introduced by Aon to Textura; or

 

(iii)                               after Aon has provided marketing, technical or other efforts and/or support to Textura in connection with marketing the Software and/or Aon Applications to such Entity and without such efforts and/or support it would be reasonably deemed that such Entity would not have become a Textura client; or

 

(iv)                              that is an existing referral under the 2007 Agreement as of the Effective Date of this Agreement, as more specifically set forth in Section 4(b) below.

 

(v)                                 “Referral Fee” means an amount equal to seven percent (7%) of the Revenue.

 

(w)                               “Referral Period” is the first ten (10) years in which a Referral transacts business with Textura, commencing on the date the Referral first becomes a Textura client by executing a license or services agreement with Textura and making a first payment to Textura.  The ten (10) years need not be consecutive, but may not include any year commencing after a span of fifteen (15) consecutive years starting on the date the Referral first becomes a Textura client.

 

(x)                                 “Revenue” means the total of:

 

(i)                                     For CPM, the total revenues paid to Textura from Referrals related to their use of CPM, excluding all reasonable and customary costs for one-time software development projects, implementation fees, document customization fees and project fees for initial set up of: (1) such Referrals as Textura clients or (2) any project for such Referrals, plus all subscription amounts or other revenues paid to Textura from the subcontractors of any such Referrals that conduct business or interact with said Referrals using Textura technology or systems when such business or interaction is for such specific Referrals’ project;

 

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(ii)                                  For PQM, the total revenues paid to Textura from Referrals related to their use of PQM, excluding all reasonable and customary onetime costs associated with software development projects, implementation fees, document customization fees and project fees for initial set up of: (1) such Referrals as Textura clients or (2) any project for such Referrals, plus all subscription amounts or other revenues paid to Textura from the subcontractors of any such Referrals in accordance with the provisions of Exhibit A.

 

(iii)                               For all other Textura products or services, Textura shall provide Aon with forty-five (45) days advance notice prior to Textura’s provision of such products or services to its clients or customers and during such forty-five (45) day period, the Parties shall work together to reach a mutually agreeable formula for the Revenue generated from such products or services by Aon’s Referrals, with the understanding that such formula will result in seven percent (7%) of all revenue paid to Textura for the use by Referrals and their subcontractors of such products or services and shall not include, if applicable, reasonable and customary one-time costs associated with software development projects, implementation fees, document customization fees and project fees for initial set up of: (1) such Referrals as Textura clients or (2) any project for such Referrals.

 

(iv)                              For the avoidance of doubt, no dollar of Revenue generated by a subcontractor will be included in the calculation of more than one Referral Fee.

 

(y)                                 “Software” has the meaning set forth in the recitals.

 

(z)                                  “Software Agreement” has the meaning set forth in the recitals.

 

(aa)                          “2007 Agreement” has the meaning set forth in the recitals.

 

(bb)                          “2007 Warrant” has the meaning set forth in the recitals.

 

(cc)                            “Term” has the meaning set forth in Section 5(a).

 

(dd)                          “Termination Event” has the meaning set forth in Section 5(b).

 

(ee)                            “Textura” has the meaning set forth in the recitals.

 

(ff)                              “Textura 2010 Financing” shall mean the Seven Million Dollars (US $7,000,000) of convertible debentures (the “Convertible Debentures”) and warrants to purchase common stock upon the terms and conditions approved by the Textura Board of Directors on May 7, 2010, and any subsequent amendments thereto approved by the Textura Board of Directors (the “Financing Term Sheet”).

 

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(gg)                            “Three Year Anniversary Trigger” has the meaning set forth in Section 3(d)(i)(A).

 

Section 2.                                           Referral Fee Payment.

 

(a)                                 Generally.  In consideration for Aon making a Referral, Textura will (i) award Aon with a fee credit to its balance in the Credit Bank Account (as described in Section 3) equal to Seventy-Five Percent (75%) of the dollar value of the Referral Fee based on Revenue received by Textura from such Referral during the Referral Period as applicable to such Referral and (ii) pay Aon Twenty-Five Percent (25%) of such Referral Fee in cash.  The credits to Aon’s Credit Bank Account balance will be awarded and the cash payment made within 60 days after each calendar quarter starting or ending during the Referral Period.

 

(b)                                 Overpayments.  If fee credits are awarded for a calendar quarter within a year that is later determined not to count towards the Referral Period, Textura shall debit an amount from the Credit Bank Account equal to the dollar value of the original award that was an overpayment, except that if the Credit Bank Account balance is insufficient to debit such fee credits, Textura may offset future awards or deposits by Aon in the Credit Bank by any such shortfall.  In the event future awards or deposits by Aon in the Credit Bank Account are insufficient to cover such shortfall as of the end of the term of this Agreement, the cash value of any remaining shortfall (based on the cash value of the original award or unreturned portion thereof that was an overpayment) shall be a liability of Aon to Textura payable by wire transfer or check within 60 days of the end of the term of this Agreement.

 

(c)                                  Termination.  If the Credit Bank is terminated pursuant to this Agreement, Textura’s obligations to pay Aon the Referral Fees shall continue for the remainder of the Term and as further set forth in Section 3(d)(iii) and such obligations shall be considered a senior debt instrument and have the same ranking and rights as Textura’s 2010 Convertible Debenture.

 

Section 3.                                           Credit Bank Account; Fee Credits.

 

(a)                                 Generally.  Referral Fee payments pursuant to Section 2 shall be paid in the form of fee credits that are equal to the dollar value of a Referral Fee. Aon may also make direct investments in the Credit Bank pursuant to the terms of this Agreement and such investments shall constitute credits to the Aon’s Credit Bank account balance in the amount of such investment.

 

(b)                                 Credit Bank Account.  Textura shall establish and maintain a bookkeeping account of amounts invested by Aon in Textura and Referral Fee amounts awarded by Textura to Aon, referred to as the “Credit Bank Account.”  As reasonably requested by Aon, but no more than once each calendar quarter, Textura shall provide Aon with a statement identifying the beginning balance, inflows, outflows and the ending balance of the Credit Bank Account and any fee credits during the period since the last statement and any supporting documentation as may be reasonably requested by Aon.  Balances in the Credit Bank Account will accrue interest at an eight percent (8%) per annum rate calculated in arrears (the “Credit Bank Account Interest”).  The amount due Aon as reflected in the Credit Bank Account shall be considered a senior debt instrument of Textura and be pari passu with the Convertible Debentures issued under the

 

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Textura 2010 Financing.  Except as may be provided in Section 3(e)(ii) to the contrary, Aon is under no obligation to keep a minimum credit balance in the Credit Bank Account.

 

(c)                                  Reductions for Development Work.  To the extent mutually agreed to by Aon and Textura from time to time in the Software Agreement or a separate written agreement, the amount credited in the Credit Bank Account shall be decreased in consideration for development work and other rights, licenses and services that may be provided by Textura to Aon or an Affiliate of Aon by an amount equal to the product of (i) the Mid-Level Developer Hour value agreed upon by the Parties for the specific services for which payment to Textura is being affected, and (ii) the agreed upon number of hours required to perform a development task.  A “Mid-Level Developer Hour” equals the per-hour rate at which the Parties agree Textura is adequately compensated for its expenses of or amounts it pays to a mid-level developer. The value of a Mid-Level Developer Hour shall be (i) $75 for the initial work order under the Software Development Agreement and (ii) mutually agreed by the Parties for any subsequent work order.  The value of a Mid-Level Developer Hour set forth in the any work order shall be reviewed and may be revised annually as mutually agreed to by Aon and Textura on a work order by work order basis, and as provided in the Software Agreement.  At any time, the value of a Mid-Level Developer Hour as determined by the applicable work order shall be used to convert development tasks and hours into dollar amounts under the applicable work order with respect to payment for Textura’s services thereunder.  The Parties agree that the total amount chargeable by Textura to the Credit Bank Account for Mid-Level Developer Hours for phase 1 and phase 2 of development under the Software Agreement initial work order shall be $470,000, as further subject to the terms of the applicable Work Order.

 

(d)                                 Payment of Credit Bank Account.

 

(i)                                     Trigger Events.

 

A.                                    Except as described in this Agreement to the contrary, Aon shall not request the payment of any amounts in the Credit Bank Account until after the earlier to occur of (1) a North American Cash Flow Positive Event (a “Cash Flow Trigger”) or (2) the third anniversary of the Effective Date of this Agreement (the “Three Year Anniversary Trigger”).

 

B.                                    Upon the occurrence of the Cash Flow Trigger but prior to the occurrence of the Three Year Anniversary Trigger, (1) for the first six months after such Cash Flow Trigger, Aon shall only have the right to request that amounts in the Credit Bank Account in excess of Five Hundred Thousand Dollars (US $500,000) (the “Threshold”) and less than Two Million Dollars ($2,000,000) (the “Cap”) be converted to Textura common stock or paid in cash, at Textura’s discretion, in accordance with the demand, notice of form and confirmation procedures set forth in Section 3(d)(vi), and (2) after the expiration of the first six months after such Cash Flow Trigger, Aon shall have the right to request that

 

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amounts in the Credit Bank Account in excess of the Threshold and less than the Cap be converted to Textura common stock or paid in cash, at Textura’s discretion, in accordance with the demand, notice of form and confirmation procedures set forth in Section 3(d)(vi), and that amounts in the Credit Bank Account in excess of the Cap be promptly paid to Aon by Textura in cash, or, if the Parties mutually agree in Textura common stock.

 

C.                                    Upon the occurrence of the Three Year Anniversary Trigger, regardless of whether the Cash Flow Trigger has occurred, Aon shall have the right to demand quarterly cash payment of the amounts in the Credit Bank Account in accordance with the provisions of Section 3(d)(ii), and the Threshold and Cap restrictions shall no longer apply.

 

D.                                    None of the provisions of this Section 3(d)(i), including without limitation the Cash Flow Trigger, Three Year Anniversary Trigger, Cap or Threshold restrictions, shall apply to any demands for payment made by Aon except for those described in Section 3(d)(i)(B).

 

E.                                     After such request and payment of amounts to Aon as may be affected under this Section 3(d)(i), any balance remaining in the Credit Bank Account will continue to be subject to the applicable terms and conditions set forth in either Section 3(d)(i) or (ii), depending on whether a Three Year Anniversary Trigger has then occurred.

 

F.                                      A “North American Cash Flow Positive Event” shall have been deemed to occur on the first day of the first month beginning after Textura’s (and its applicable subsidiaries) results of operations in the United States and Canada, measured on a consolidated basis in accordance with Textura’s audited financial statements prepared in accordance with U.S. generally accepted accounting principles and as determined by the Textura Board of Directors, generate a positive cash flow from operations during a period of six (6) consecutive months (measured from the first day of the first month of such period and ending on the last day of the sixth month of such period) and Textura has a cash balance in excess of Two Million Dollars (US $2,000,000).

 

(ii)                                  Quarterly.  Within the sixty (60) calendar day period after the end of each calendar quarter occurring after the occurrence of the Three Year Anniversary Trigger, Aon shall have the right (at its

 

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sole discretion) to demand payment in cash by Textura of the amount the Credit Bank Account exceeds the Credit Bank Minimum pursuant to Section 3(e)(ii), by delivering written notice to Textura identifying the amount of such excess that Aon wants to be debited from the Credit Bank Account and paid to Aon.  Upon receipt of such demand notice, Textura shall promptly pay in cash to Aon the amount of the Credit Bank Account set forth in such notice to be paid to Aon. Any payments by Textura shall be payable promptly to Aon upon Aon’s request.

 

(iii)                               Termination of Agreement.  Irrespective of the occurrence of a Cash Flow Trigger or a Three Year Anniversary Trigger, within one hundred eighty (180) calendar days after the termination or expiration of this Agreement, Textura shall pay Aon without any request thereof required by Aon an amount equal to all amounts in the Credit Bank Account. Textura may determine the form of such payment, and shall provide notice to Aon consistent with such cash, cash equivalents or Textura common stock, the value of such common stock to be determined in accordance with Section 3(d)(vi); provided, however that if Textura determines to make such payment in Textura common stock it shall issue a prior notice of payment form to Aon and Aon may upon notification reject such form of payment.  If Aon so rejects the payment of its Credit Bank Account balance in the fowl of Textura common stock, Textura shall instead issue to Aon a promissory note for such cash amount having no more than an twelve (12) month maturity date and other terms as mutually agreeable to the Parties.  Provided the termination of this Agreement is not the result of a Termination Event of or by Aon, Textura’s obligation to pay a Referral Fee for any Referrals existing at the time of this Agreement’s termination shall survive until the end of such Referrals’ Referral Periods expire and all such Referral Fees shall be paid to Aon in cash on a quarterly basis after such termination.

 

(iv)                              Change in Control.  Within the sixty (60) calendar day period after a Change in Control Event, Aon shall have the right (at its sole discretion) to provide Textura with a written notice requesting payment of any or all amounts in the Credit Bank Account and identifying the amount in the Credit Bank Account to be paid.  Textura shall be required to pay to Aon the amount identified in such written notice into cash or equity, at Aon’s sole discretion, with Textura common stock being valued as per Section 3(d)(vi)(B)(b).  Any payments by Textura shall be payable promptly to Aon upon Aon’s request.  For purposes of clarification, no interest shall be incurred with respect to any installment payment.

 

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(v)                                 Significant Events.  Within the sixty (60) calendar day period after the occurrence of a Significant Event, Aon shall have the right (at its sole discretion) to provide Textura with a written notice requesting payment of (1) any or all amounts in the Credit Bank if such event is a Significant Event described in (A)-(D) below, or (2) if such event is a Significant Event described in (E) below, an amount equal to the smaller of the then-current balance in the Credit Bank or the amount of such cash compensation paid to Textura management.  Textura shall be required to pay to Aon the amount identified in such written notice into cash or equity, at Aon’s sole discretion, with Textura common stock being valued as per Section 3(d)(vi)(B)(b).  Any payments by Textura shall be payable promptly to Aon upon Aon’s request.  A “Significant Event” is the occurrence of any of the following:

 

A.                                    Board of Directors Change.  The failure of one or both of Aon’s director designees to be recognized as directors of the Textura Board of Directors (the “Board”) prior to the occurrence of a North American Cash Flow Positive Event;

 

B.                                    Board Committee Termination.  The failure of one of Aon’s designees to the Board to be recognized as a member of the Board’s Executive Committee or such other committee serving the function traditionally served by an executive committee or to have the right of such membership to participate in the committee’s discussions, vote on matters subject to committee decision, and provide input into the reporting and other recommendations the committee provides to the Board or Textura management; or

 

C.                                    Textura Financing.  If Textura obtains financing (other than a refinancing of the mortgage loan or a sale and leaseback transaction related to the building at 1405 Lake Cook Road, Northbrook, IL) or capital raising after the Effective Date, be it in the form of debt or equity, in an amount that exceeds the then-current Credit Bank Account balance by not less than Five Million Dollars (US $5,000,000);

 

D.                                    North American Cash Flow Positive Event.  A North American Cash Flow Positive Event having failed to occur by January 1, 2012; or

 

E.                                     Cash Compensation.  If prior to the occurrence of the earlier to occur of a Cash Flow Trigger or a Three Year Anniversary Trigger, Textura management is awarded cash compensation other than such non-discretionary amounts of

 

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base salary that such management is eligible to receive pursuant to their employment contracts, and during the twelve months ending immediately prior to such cash compensation being awarded Referrals have generated over $5 million in Revenue.

 

(vi)                              Payment.

 

A.                                    The choice of whether Textura pays cash or cash equivalents or issues common stock (or any combination of the three) to Aon pursuant to this Section 3(d) shall be at Textura’s sole discretion when such payment is pursuant to Section 3(d)(i)(B), otherwise it shall be as set forth in the applicable provisions of this Agreement.

 

B.                                    In addition, at anytime that pursuant to the terms of this Agreement, Textura may pay Aon in common stock, Textura shall be required to follow the following terms:

 

a.                                      If payment to Aon is pursuant to Section 3(d)(i)(B), Textura shall provide notice to Aon of the form it will be making payment of any amounts in the Credit Bank Account within fifteen (15) calendar days after receipt of Aon’s demand of the form of payment.  Aon shall then have fifteen (15) calendar days after receipt of Textura’s form of payment notice to confirm to Textura whether it wishes to continue with such payment or to withdraw its demand and continue without payment.  Within fifteen (15) calendar days of receipt of a confirmation from Aon of Aon’s continued demand for payment, Textura shall make such payment to Aon. If Textura does not receive confirmation of Aon’s continued demand or a withdrawal of such demand within such fifteen (15) day period, Textura shall proceed in making payment to Aon in the form designated by Textura in its notice to Aon.

 

b.                                      If payment to Aon is to be affected by the conversion of the Credit Bank Account into shares of Textura common stock according with the terms of this Agreement, the number of shares that shall be issued to Aon as payment shall be determined by: (1) upon the occurrence of a Cash Flow Trigger, the number of shares that would be received by Aon upon Textura’s determination to pay a Credit Bank Account demand of Aon’s in common stock and

 

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Aon’s acceptance of such form of payment would be the number of Textura common stock shares determined by assuming such Credit Bank Account credits being converted were originally invested in the Textura 2010 Financing in an equivalent principal amount of convertible debentures issued in such financing and such debenture principal amount received under the Textura 2010 Financing and such principal amount of debentures was then being converted into equity at $26.50, and if Aon does not elect to receive conversion of the credits into common stock, Aon shall defer conversion or payment of the credits until the Three Year Anniversary Trigger, and (2) upon the occurrence of the Three Year Anniversary Trigger, the number of shares that would be received by Aon upon a determination for a Credit Bank balance to be paid in Textura common stock would be determined based on Fair Market Value, and (3) after the occurrence of a Three Year Anniversary Trigger and until such time as the occurrence of a Cash Flow Trigger, Textura common stock will be valued for Credit Bank Account balance payment purposes in accordance with Section 3(d)(vi)(B)(b), and after the Cash Flow Trigger, the stock will be valued in accordance with its Fair Market Value.  The term “Fair Market Value” shall be the value of Textura common stock as determined in any financing or capital raising conducted by Textura within six months of the common stock valuation, if such financing or capital raising, be it in the form of debt or equity, was for an amount greater than or equal to Five Million Dollars ($5,000,000) and involving three or more investors (such activity referred to as a “Subsequent Capital Raising”), or, if no such Subsequent Capital Raising had then occurred, the value of Textura common stock as mutually determined by the Parties or, if the Parties are unable to reach a mutual agreement on such fair market value, by an independent public accounting firm that is mutually agreed upon by the Parties.

 

(e)                                  Investment in the credit Bank Account

 

(i)                                     Initial Investment.  Upon execution of this Agreement, the Software Agreement and the receipt of commitments totaling not less than Seven Million Dollars (US $7,000,000) under the Textura

 

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2010 Financing, Aon shall deposit $1,078,698 in the Credit Bank Account by making a wire transfer in the amount of $1,000,000.00 and by Textura’s payment to Aon into the Credit Bank Account of the $78,698.00 it owes to Aon under the 2007 Agreement.

 

(ii)                                  Development Work Purchases.  Except as provided in this Agreement to the contrary, from time to time, Aon shall deposit additional amounts in the Credit Bank Account in anticipation of development work and maintenance and support services that Aon and Textura have mutually agreed upon being performed by Textura for Aon or an Affiliate of Aon under the Software Agreement, such that the Credit Bank Account has sufficient credits to cover the mutually agreed costs of existing development work, new development work and at least one (1) year of support for existing and new application hosting (including, without limitation, costs associated with hardware and third-party software licenses) as such costs are calculated in the agreed work order(s) that is applicable to such work and services (collectively, the aggregate of the foregoing is referred to as “Credit Bank Minimum”).  Any such deposit shall be payable by Aon by wire transfer of funds to Textura as further set forth in the Software Agreement.  Notwithstanding the foregoing, Aon is under no obligation to (1) keep a Credit Bank Minimum balance that would cause an aggregate balance in the Credit Bank Account to rise above the Cap, (2) include in its calculation of the Credit Bank Minimum any amounts in anticipation for development work that has not been agreed to by the Parties in an executed work order pursuant to the Software Development terms, (3) include in its calculation of the Credit Bank Minimum any amounts pursuant to any work orders that have expired or been terminated, or (4) maintain any Credit Bank Minimum if Aon has requested full payment of the Credit Bank Account balance pursuant to a Change in Control or Significant Event, in which such case Aon shall pay Textura for services provided under the Software Development Agreement with the remaining Credit Bank Account balance, if any, and then in cash.

 

Section 4.                                           2007 Agreement Payments.

 

(a)                                 Termination.  The 2007 Agreement shall hereby be terminated as of 12:01 a.m. Central Time on the Effective Date, and (i) except as provided in Section 4(b) below, the Parties to the 2007 Agreement shall have no further rights or obligations under the 2007 Agreement and (ii) $78,698, the aggregate amount owed under the 2007 Agreement as of 12:01 a.m. Central Time on the Effective Date, shall be added to the Credit Bank Account as set forth in Section 3(e)(i) and governed by the terms and conditions of this Agreement and the Software Agreement. Schedule 1 attached hereto sets forth the aggregate amount stated in the preceding sentence’s clause (ii) on a client by client basis.

 

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(b)                                 CPM Fees.  Notwithstanding Section 4(a) above, existing persons using CPM who are treated as “Clients” pursuant to the 2007 Agreement and “referred” (as defined in the 2007 Agreement) to Textura by Aon shall be treated as Referrals for purpose of this Agreement, with a corresponding Referral Fee paid by Textura pursuant to Section 2 of this Agreement; provided that Referral Fees shall be due and paying for such Clients only for a period of ten (10) years less the period Aon earned referral fees for such Clients under the 2007 Agreement.  All such “Clients” are listed in Schedule 2 attached hereto.

 

Section 5.                                           Term & Termination.

 

(a)                                 Term.  Except upon an early termination as described in Section 5(b), the term of this Agreement shall commence on the Effective Date and continue through and until 11:59 p.m. Central Time on the 10th anniversary of the Effective Date (the “Term”).

 

(b)                                 Early Termination.  This Agreement may not be terminated prior to the term described in Section 5(a) above except upon the occurrence of one or more of the events set forth below (each, a “Termination Event”), provided that written notice be provided by the Party seeking termination to the other Party:

 

(i)                                     Bankruptcy.  By either Party, if the other Party hereto shall make a general assignment for the benefit of creditors, files a voluntary petition of bankruptcy, suffers or permits the appointment of a receiver for its business or assets, becomes insolvent, becomes subject to (voluntarily or involuntarily) any proceedings under any bankruptcy, liquidation or insolvency law, whether domestic or foreign, or has wound up or liquidated its business voluntarily or otherwise, and same has not been discharged or terminated within sixty (60) days.

 

(ii)                                  Default.  By a Party, if the other Party hereto shall materially breach any provision of this Agreement and the breach shall continue for a period of thirty (30) calendar days after written notice to the breaching Party stating specifically the breach.

 

(iii)                               Going Concern.  By either Party, if any Party hereto shall cease doing business as a going concern and such business is not continued by a successor in interest within sixty (60) days after such cessation of business.

 

(iv)                              Change in Control.  By Aon, upon the occurrence of a Change in Control Event.

 

(c)                                  Obligations Upon, and Effect of, Termination.  The termination or expiration of the term of this Agreement shall not vacate any payment obligations set forth herein accrued upon or prior to such termination or expiration (including, but not limited to the payment requirements of Section 3(d)(ii) above); Textura’s obligations to pay Referral Fees shall continue as set forth in Section 2 and shall continue for any Referral Fees due and owing on or

 

13

 

prior to such termination date; and Sections 5(c), 11, 12 and 13 shall survive.  The terms of Section 3(d)(iii) shall apply upon the termination or expiration of this Agreement.

 

Section 6.                                           Multiple Referrals.  In the event that Textura receives referrals for the same client from Aon and any third party or parties, the Parties agree that the Referral Fees payable to Aon shall be reduced ratably in the reasonable discretion of Textura in the event a Referral Fee payment with respect to that client is also due to any such third party and Textura shall provide prompt notice to Aon of the existence of such multiple referrals and the extent of the Referral Fee reduction; notwithstanding the foregoing, (a) no Referral Fees related to clients or customers of Aon that are Referrals pursuant to Section 1(r)(i) of the definition of Referrals will be subject to any reduction or sharing of the Referral Fee and (b) if Textura is obligated to pay a third party a referral fee payment with respect to the same client for which Aon is due a Referral Fee, no Referral Fee shall be reduced below fifty percent (50%) of the amount otherwise due to Aon under this Agreement.  In addition, the reduction of Referral Fees set forth in this Section 6 shall not apply to any Referral unless at the time that Aon becomes involved in such client becoming a Referral, Textura notifies Aon in writing of the existence of such multiple referrals.  No obligations of Textura to pay referrals to third parties that arise after such client becomes a Referral shall reduce the amount of a Referral Fee owed to Aon under this Agreement.  In the event of any disagreement relating to this Section 6 which cannot be resolved, the Parties will escalate the disagreement to Aon’s Chief Administration Officer and Textura’s designated Board Member, Michael Murray or his successor, for resolution.

 

Section 7.                                           Warrants.

 

(a)                                 2007 Agreement Warrants.  Effective upon the Effective Date, the warrant to purchase up to 80,000 Class D-2 Shares issued to Aon in connection with the 2007 Agreement (the “2007 Warrant”) and any and all interest of Aon and all permitted assigns in connection with the 2007 Warrant shall immediately terminate, and Aon Risk Services hereby forfeits any and all rights with respect to the 2007 Warrant.  As a condition precedent to the obligations of Textura in this Agreement, Aon agrees to return to Textura the original 2007 Warrant (or affidavit as to its termination and destruction) and execute, acknowledge and deliver such other instruments and documents as reasonably may be requested to more effectively terminate any interest of Aon with respect to the 2007 Warrant.

 

(b)                                 Referral Performance Warrants.  Aon will earn performance warrants as the current Aon general contractors listed in Schedule 3 hereto, as such Schedule may be amended from time to time upon mutual written agreement of the Parties (the “Listed General Contractors”), become Textura clients and meet minimum revenue targets, as follows.

 

(i)                                     Upon execution of this Agreement, Textura shall deliver to Aon a warrant to purchase ten thousand (10,000) shares of common stock priced at $26.50 per share as consideration for Aon’s referral of PCL for CPM.

 

(ii)                                  Upon the implementation of PQM by PCL and Tutor-Perini, Textura shall deliver to Aon a warrant to purchase up to three

 

14

 

thousand seven hundred fifty (3,750) shares of common stock priced at $26.50 per share for each implementation.

 

(iii)                               If within four (4) years after the Effective Date the total Revenue received by Textura with respect to CPM and PQM from the Aon Listed General Contractors (the “Performance Revenue”) is equal or greater than Forty Million Dollars (US $40,000,000), Textura shall deliver to Aon a warrant to purchase thirty thousand (30,000) shares of common stock priced at $26.50 per share.

 

(iv)                              If within four (4) years after the Effective Date, the Performance Revenue equals or exceeds Eighty Million Dollars (US $80,000,000), Textura shall deliver to Aon a warrant to purchase seventy thousand (70,000) shares of common stock priced at $26.50 per share in addition to the warrants described in Section 7(b)(iii) above.

 

(v)                                 If, on the date four years after the Effective Date, the Performance Revenue does not equal or exceed Eighty Million Dollars (US $80,000,000), but exceeds Forty Million Dollars (US $40,000,000), Textura shall deliver to Aon a warrant to purchase additional shares of common stock equal to the sum of (A) thirty thousand (30,000) and (B) the product of (1) seventy thousand (70,000) times (2) a fraction, the numerator of which equals total Performance Revenue less Forty Million Dollars (US $40,000,000) and the denominator of which equals Forty Million Dollars (US $40,000,000), rounded by the nearest whole number.

 

Textura will calculate the Performance Revenue generated from the Listed General Contractors promptly after expiration of the four (4) year performance warrant period and, if Aon has earned any performance warrants, Textura will promptly issue and deliver such warrants to Aon, and will issue such warrants no later than 60 days after the expiration of such four (4) year period. Such warrants will be in the form of Exhibit A and must be exercised within five (5) years after the Effective Date.  Upon expiration of the four (4) year performance period, Aon’s right to earn such warrants shall expire, and upon expiration of the five (5) year period, Aon’s right to exercise such warrants shall automatically expire.  For the avoidance of doubt, the maximum warrants that can be earned under Sections 7(b)(iii), (iv) and (v) is One Hundred Thousand (100,000) warrants.

 

Section 8.                                           Independent Contractor.  The Parties agree and acknowledge that no relationship between Aon and Textura other than that of independent contractor is established hereby.  Aon is not an employee, agent, joint venturer or partner of or with Textura and this Agreement does not create any agency between Aon and Textura.  No Party shall represent to any third party that it is the employee, agent, joint venturer or partner of the other or make any representation or warranty on behalf of or in the name of the other or conduct any business or accept payment or service of legal process for the other.

 

15

 

Section 9.                                           Geographic Scope.  This Agreement shall be global in scope and thus apply to Clients anywhere in the world.

 

Section 10.                                    Nonexclusivity.

 

(a)                                 Generally.  Subject to the limitations in Section 10(b), Textura shall have the right to enter into substantially similar referral fee agreements with other Parties, and provide any person the right to promote Textura’s products and services (including without limitation the Software).

 

(b)                                 Co-Marketing and Co-Exhibiting Limitations.  During the term of this Agreement, Textura shall not co-market or co-exhibit the Software with any Aon Competitor, except to the extent Aon provides advance consent in writing (which consent may be withheld in Aon’s reasonable discretion).  For purpose of this Section 10(b), an “Aon Competitor” means an insurance broker that provides services to real property construction contractors, owners or developers anywhere in the world.  Notwithstanding the foregoing, and for the avoidance of doubt, nothing herein restricts or prohibits Textura from (i) cooperating with an Aon Competitor to sell Textura products and/or services to an Aon Competitor client itself or jointly with such Aon Competitor, (ii) participating in an Aon Competitor sales or marketing event as a speaker (without making any payment to such Aon Competitor), or (iii) authorizing any Aon Competitor to use Textura’s name, trademarks and/or materials in such Aon Competitor’s marketing materials for the purpose of identifying Textura’s products and services. Textura hereby represents to Aon that it has not entered into any referral agreements with other third-parties that have terms more favorable to the third party to that agreement than the terms of this Agreement, including, without limitation with respect to the Referral Fee calculation and payment structure, are to Aon, and Textura agrees that if it shall enter into any such agreement which would make the representation in the preceding sentence if given then inaccurate, it shall immediately notify Aon of its existence and terms, and, unless Aon elects otherwise within ten (10) days of such notice, this Agreement shall be deemed to be amended to conform the provisions of this Agreement with such more favorable terms.

 

Section 11.                                    Nonsolicitation.  During the term of this Agreement and for one (1) year thereafter, neither Party shall employ or solicit for employment any employee, contractor or consultant of the other Party without the other Party’s prior written consent; provided, however, that neither Party shall be prohibited from soliciting for employment or employing any such person who has ceased to be employed by the other Party (as an employee, contractor or consultant, without any inducement by such Party) or from employing any such person who contacts the other Party (i) on his or her own initiative and without any direct or indirect solicitation, or (ii) in response to a general solicitation for employment, such as an advertisement published in a newspaper, periodical or similar publication or published on such Party’s website.

 

Section 12.                                    Confidential Information.  Each Party acknowledges that in performing under this Agreement, it and its personnel may have access to the other Party’s confidential and proprietary information (“Confidential Information”).  Confidential Information shall include, without limitation, all information related to a Party’s general business operations (such as sales, marketing plans, costs, profits, pricing methods and financial information), software (source code and object code), algorithms, trade secrets, know-how, information technology systems,

 

16

 

equipment, technical designs, and maintenance policies and employee, supplier, and subscriber lists.  The receiving Party shall treat all information learned or acquired in the course of performing under this Agreement as Confidential Information, unless it is clearly available to the general public or the receiving Party can show was already in its possession at the time of receipt or was independently developed without use of the disclosing Party’s Confidential Information or is hereafter is made public through no fault of the receiving party.  The receiving Party will hold all of the disclosing Party’s Confidential Information in strict confidence and not use the disclosing party’s Confidential Information for the benefit of any third party or for any purpose other than as necessary to perform under this Agreement, and will not disclose Confidential Information to anyone except authorized employees with a need to know to perform under this Agreement.  These restrictions will continue indefinitely, even after the expiration or termination of this Agreement.

 

Section 13.                                    Miscellaneous.

 

(a)                                 Limitation of Liability.  EXCEPT FOR DAMAGES ARISING FROM BREACH OF CONFIDENTIALITY OR WILLFUL OR RECKLESS CONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA, OR USE, INCURRED BY SUCH PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

(b)                                 Force Majeure.  Neither Party shall be in default or otherwise liable for any delay in or failure of its performance under this Agreement where such delay or failure arises by reason of any Act of God, or any government or any governmental body, acts of the common enemy, the elements, strikes or labor disputes, or other similar or dissimilar cause beyond the control of such Party.

 

(c)                                  Notices.  Any notices required or permitted hereunder shall be in writing and sent by first class mail addressed to the addresses set forth below the Party signatures herein, by personal delivery, or by telecopy with proof of receipt, and shall be deemed received upon actual receipt or four business days after mailing.

 

(d)                                 Recitals.  The captions and recitals set forth above are an integral part of this Agreement and are incorporated by reference herein and made a part hereof.

 

(e)                                  Captions.  Section titles, captions and headings contained herein are inserted as a matter of convenience and are for reference only.

 

(f)                                   Waiver.  The waiver by either Party of any breach by the other Party of the representations, warranties, promises and/or covenants contained herein shall not prevent the subsequent enforcement of any such representation, warranty, promise and/or covenant as to any aspect that has not been waived, nor shall it be deemed a waiver of any subsequent breach thereof.  No waiver of any breach or violation hereof shall be implied from forbearance or failure by a Party to take action thereon.

 

17

 

(g)                                  Governing Law/Venue.  This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of Illinois without regard to its conflicts of laws rules and the Parties hereby consent that the sole proper venue and jurisdiction for any disputes arising hereunder shall be in the federal and state courts situated in the Lake County, State of Illinois.

 

(h)                                 Assignment.  Neither Party may assign or transfer this Agreement or any of its rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other Party such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that Aon may assign this Agreement to any of its Affiliates without the prior consent of Textura.

 

(i)                                     Reliance by Third Parties.  This Agreement is intended for the sole and exclusive benefit of the Parties and their respective representatives, successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to claim or derive any benefit therefrom.

 

(j)                                    Entire Agreement.  This Agreement, including the exhibits and schedules hereto, and the Software Agreement constitute the entire agreement between the Parties regarding the subject matter hereof and supercede all previous agreements and arrangements between the Parties relating to the subject matter hereof, whether written or oral. No terms, conditions or provisions other than those expressly contained herein shall be deemed to be part of this Agreement.

 

(k)                                 Amendments.  Neither this Agreement nor any of the terms or conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by Aon and Textura.

 

(l)                                     Counterparts.  This Agreement may be executed in any number of counterparts, including by pdf or facsimile, that together shall constitute one and the same instrument.

 

(m)                             Compliance With Laws.  Each Party shall, at its own expense, comply with all laws, rules and regulations and assume all liabilities or obligations imposed by such laws, rules and regulations with respect to its performance under this Agreement.

 

(Signature Page Follows)

 

18

 

IN WITNESS WHEREOF, each of the Parties has executed this 2010 Referral Fee Agreement as of the date first set forth above.

 

	
Aon   Risk Services Central, Inc.
    	
 
    	
Textura   Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Geoffrey Heekin
    	
 
    	
By:   
    	
/s/   Patrick Allin
    
	
Name:   
    	
Geoffrey   Heekin
    	
 
    	
Name:   
    	
Patrick   Allin
    
	
Title:   
    	
Executive   Vice President
    	
 
    	
Title:   
    	
CEO
    

 

 

	
Aon   Risk Services Central, Inc.
    	
 
    	
Attn:   Textura Corporation
    
	
Attn:   Geoffrey Heeken
    	
 
    	
Attn:   P.J. Allin
    
	
Address:   200 East Randolph St.,
    	
 
    	
Address:   
    	
1405   Lake Cook Rd
    
	
Chicago, IL   60601
    	
 
    	
 
    	
Deerfield, IL 60615
    
	
Facsimile:   312-381-0275
    	
 
    	
Facsimile:   
    	
847-882-1037
    

 

With a copy for notice purposes to:

 

Aon Corporation
 Attn: Chief Counsel — Corporate
 200 East Randolph Street
 Chicago, IL  60601
 Facsimile:  312-381-6165

 

19

 

SCHEDULE 1

 

Aggregate Amount Owed for Referred Clients Under the 2007 Agreement

 

See attached.

 

 

	
Relationship:
    	
Aon   Risk Services of Illinois, Inc.
    
	
Signed   By:
    	
Patrick   Allin
    
	
Agreement   Date:
    	
5/10/2007
    
	
Term   Date:
    	
5/10/2012
    
	
 
    	
 
    
	
Initial   Referral Fee:
    	
$25,000   for each referral that becomes a Client (generating $2,000 per month   in transaction fee revenue) paid within 30 days following quarter in which a   Client first pays $2,000 in transaction fee revenue
    
	
Transactional   Fees:
    	
Category   (2) Non-Residential Contractors Developers

1(a):               Clients on   2006 ENR Top 100 List
   10% of transaction fee revenue paid during first 36 Textura provides services   to clients who generate $5,000 per month in paid transaction fee   revenue

1(b):               Clients not   on 2006 ENR Top 100 List
   5% of transaction fee revenue paid during first 36 months Textura provides   services to clients who generate $2,000 per moth in paid transaction   fee revenue
    
	
 
    
	
 
    	
Category   (2) Residential Builders

2(a):               Clients   listed on Exhibit B of agreement
   10% of transaction fee revenue paid during first 36 Textura provides services   to clients who generate $5,000 per month in paid transaction fee   revenue

2(b):               Clients no on   Exhibit B of agreement
   5% of transaction fee revenue paid during first 36 months Textura provides   services to clients who generate $2,000 per moth in paid transaction   fee revenue
    
	
 
    	
Category   (3) Subsequent Referrals (Clients not included in Category (1) &   (2)

3(a):               5% of   transaction fee revenue paid during first 36 months Textura provides services   to clients who generate transaction fee revenue of less than $500,000

3(a):               10% of   transaction fee revenue paid during first 36 months Textura provides services   to clients who generate transaction fee revenue of more than $500,000
    
	
36   Month Extension:
    	
Qualified   Projects = Total cost exceeds $100,000,000 and are Initiated within the   initial 36 month period Referral fees will continue to be paid until project   completion
    

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
2006 ENR
   Top 100?
    	
 
    	
Start Date
    	
 
    	
End Date
    	
 
    	
$2k
   Threshold
    	
 
    	
$5k
   Threshold
    	
 
    	
Revenue
   Q/E 12.31.07
    	
 
    	
Revenue
   Q/E 3.31.08
    	
 
    	
Revenue
   Q/E 6.30.08
    	
 
    	
Revenue
   Q/E 9.30.08
    	
 
    	
Revenue
   Q/E 12.31.08
    	
 
    	
Revenue
   Q/E 3.31.09
    	
 
    	
Revenue
   Q/E 6.30.09
    	
 
    	
Revenue
   Q/E 9.30.09
    	
 
    	
Revenue
   Q/E 12.31.09
    	
 
    	
Revenue
   Q/E 3.31.10
    	
 
    
	
Category   1(a):
    	
 
    	
Perini
    	
 
    	
Y
    	
 
    	
Nov-07
    	
 
    	
Nov-10
    	
 
    	
Nov-07
    	
 
    	
 
    	
 
    	
10,460 
    	
 
    	
9,815
    	
 
    	
13,120 
    	
 
    	
13,305 
    	
 
    	
10,365 
    	
 
    	
6,030
    	
 
    	
6,810  
    	
 
    	
9,275 
    	
 
    	
4,090 
    	
 
    	
2,080 
    	
 
    
	
 
    	
 
    	
PCL
    	
 
    	
Y
    	
 
    	
Aug-09
    	
 
    	
Aug-12
    	
 
    	
Aug-09
    	
 
    	
Nov-07
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
— 
    	
 
    	
90,000 
    	
 
    	
2,388 
    	
 
    	
143,543 
    	
 
    
	
 
    	
 
    	
Gûbane
    	
 
    	
Y
    	
 
    	
Sep-09
    	
 
    	
Sep-12
    	
 
    	
Dec-09
    	
 
    	
Aug-09
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
2,420
    	
 
    	
11,235
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total Revenue
    	
 
    	
 
    	
 
    	
 
    	
 
    	
10,460
    	
 
    	
9,815
    	
 
    	
13,120
    	
 
    	
13,305
    	
 
    	
10,365
    	
 
    	
6,030
    	
 
    	
6,810
    	
 
    	
99,275
    	
 
    	
8,898
    	
 
    	
156,858
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Referral%
    	
 
    	
 
    	
 
    	
 
    	
 
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    	
10
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Referral Fees   Earned
    	
 
    	
 
    	
 
    	
 
    	
 
    	
1,046
    	
 
    	
982
    	
 
    	
1,312
    	
 
    	
1,331
    	
 
    	
1,037
    	
 
    	
603
    	
 
    	
681
    	
 
    	
9,928
    	
 
    	
890
    	
 
    	
15,686
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
2006 ENR
   Top 100?
    	
 
    	
Start Date
    	
 
    	
End Date
    	
 
    	
$2k
   Threshold
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Category   1(b):
    	
 
    	
Tocci
    	
 
    	
N
    	
 
    	
Dec-06
    	
 
    	
Dec-09
    	
 
    	
Dec-08
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3,210
    	
 
    	
3,085
    	
 
    	
3,610
    	
 
    	
3,060
    	
 
    	
2,575
    	
 
    	
6,262
    	
 
    
	
 
    	
 
    	
Panattoni
    	
 
    	
N
    	
 
    	
May-09
    	
 
    	
May-12
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total   Revenue
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
3,210
    	
 
    	
3,085
    	
 
    	
3,610
    	
 
    	
3,060
    	
 
    	
2,575
    	
 
    	
6,262
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Referral%
    	
 
    	
 
    	
 
    	
 
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Referral   Fees Earned
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
161
    	
 
    	
154
    	
 
    	
181
    	
 
    	
153
    	
 
    	
129
    	
 
    	
313
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Threshold Date
    	
 
    	
 
    	
 
    	
Q/E 12.31.07
    	
 
    	
Q/E 3.31.08
    	
 
    	
Q/E 6.30.08
    	
 
    	
Q/E 9.30.08
    	
 
    	
Q/E 12.31.08
    	
 
    	
Q/E 3.31.09
    	
 
    	
Q/E 6.30.09
    	
 
    	
Q/E 9.30.09
    	
 
    	
Q/E 12.31.09
    	
 
    	
Q/E 3.31.10
    	
 
    
	
Initial   Referral Fee
    	
 
    	
Perini
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Nov-07
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
PCL
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Aug-09
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Gûbane
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Dec-09
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tocci
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Dec-08
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Referral Fees Earned:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
25,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
25,000
    	
 
    	
25,000
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total
    	
 
    	
 
    	
 
    	
26,046
    	
 
    	
982
    	
 
    	
1,312
    	
 
    	
1,331
    	
 
    	
26,197
    	
 
    	
757
    	
 
    	
862
    	
 
    	
35,081
    	
 
    	
26,019
    	
 
    	
15,999
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Payment made
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
26,9197
    	
 
    	
757
    	
 
    	
 
    	
 
    	
5,388
    	
 
    	
538
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Cumulative Diff
    	
 
    	
 
    	
 
    	
26,046
    	
 
    	
2,028
    	
 
    	
3,340
    	
 
    	
4,670
    	
 
    	
3,950
    	
 
    	
3,950
    	
 
    	
4,812
    	
 
    	
34,504
    	
 
    	
59,985
    	
 
    	
75,984
    	
 
    

 

	
Total   Referral Fees Earned YTD
    	
 
    	
137,298
    	
 

	
Total   Referral Fees Paid YTD
    	
 
    	
58600
    	
 

	
 
    	
 
    	
 
    	
 

	
Referral   Fee Payment to Credit Bank Beginning Balance
    	
 
    	
78,698
    	
 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
																																		

 

 

SCHEDULE 2

 

2007 Referral Clients

 

See Schedule 1.

 

 

SCHEDULE 3

 

Listed General Contractors

 

Acciona

ACS/Dragados

Austin Industries

Balfour Beatty Construction

Barton Malow

Bechtel

Bilfinger

Black & Veatch

Bougye

Bovis Lend Lease

Brasfield & Gorrie LLC

CB&I

China Construction

China Rail

Clark Group

Corillian

DPR Construction Inc.

Ellis Don

Fagen Inc.

FCC

Fluor Corp.

Foster Wheeler AG

Gilbane Building Co.

Granite Construction Inc.

Hensel Phelps Construction Co.

Jacobs

JE Dunn Construction Group

Kajima

KBR

Kiewit Corp.

Manhattan Construction Group

McCarthy Holdings Inc.

McDermott International Inc.

Odebrecht

PCL Construction Enterprises Inc.

Skanska USA Inc.

Structure Tone

Suffolk Construction Co. Inc.

The Shaw Group

The Turner Corp.

The Walsh Group Ltd.

The Weitz Co. LLC.

The Whiting — Turner Contracting Co.

 

 

The Yates Cos. Inc.

Turner Industries Group LLC

Tutor-Perini Corp.

URS Corp.

Vinci

Webcor Builders

Willbros Group Inc.

 

 

EXHIBIT A

 

Explanation of PQM Revenue Calculation

 

Section I (x)(ii) of this Agreement specifies the definition of Revenue for Referrals use of the PQM application.  This Exhibit sets forth the mechanics for calculating the PQM Revenue for a Referral’s subcontractors.

 

When a new Referral becomes a PQM client of Textura it is Textura’s intention to request a list of such Referral’s active subcontractors from the Referral and to contact each of them to sell PQM.  Regardless of whether such list is provided or such contact is made, such Referral’s Revenue shall include amounts related to its subcontractors as follows:

 

1.              Subcontractor does not purchase POM.  In this instance no subcontractor Revenue is included in a Referral’s Revenue; however, if such subcontractor purchases PQM for use with a Referral the terms of paragraphs 2 or 3 below shall apply.

 

2.              Subcontractor is not a current Textura PQM client and signs up for a PQM subscription.  The entire subscription amount is included in Revenue and is therefore included in the calculation of the Referral’s Referral Fee.  At each subsequent subscription renewal, as long as this subcontractor uses PQM to pre-qualify with at least one Referral, the entire renewal subscription amount is included in “Revenue” and is therefore included in the calculation of the Referral’s Referral Fee.

 

3.              Subcontractor is a current Textura POM client and has not previously pre-qualified with a Referral and uses PQM to pre-qualify with the new Referral.  When this subcontractor renews its subscription or adds to its subscription level going forward, the entire going forward subscription amount paid to Textura by such subcontractor (including such subscription amounts paid based on its pre-qualification for non-Referrals) is included in the Referral’s Revenue and is therefore included in the calculation of the Referral’s Referral Fee.  At each subsequent subscription renewal, as long as this subcontractor uses PQM to pre-qualify with at least one Referral, the entire renewal subscription amount is included in Revenue and is therefore included in the calculation of the Referral’s Referral Fee.

 

4.              Subcontractor is a current Textura PQM client and has previously pre-qualified with a Referral (“Initial Referral”) and uses PQM to pre-qualify with the new Referral (“Second Referral”).  No separate Referral Fee is earned based on this relationship between the subcontractor and a Second Referral, as any additional Revenue generated from this second relationship would be included in the calculation of the Initial Referral’s revenue in accordance with the terms of paragraph 2 above.  However, if the Second Referral eventually becomes the only Referral that such subcontractor has pre-qualified with due to the Initial Referral no longer being a “Referral” as defined in the Agreement, then all Revenue

 

 

generated by such subcontractor shall be included in the Referral Fee associated with the Second Referral.  Revenue from subcontractors pre-qualifying with more than two Referrals shall be treated in a consistent manner with the foregoing.

 

5.              Each dollar of subcontractor PQM revenue will only be included in the calculation of one Referral Fee.  There will be no double counting of one dollar of revenue.

 

 

EXHIBIT B

 

Form of Future Issuance of Textura Warrant

 

See attached.

 

 

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS: (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF THESE SECURITIES (CONCURRED IN BY LEGAL COUNSEL TO THE COMPANY), STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. BY ACQUIRING THIS WARRANT, THE HOLDER REPRESENTS THAT THE HOLDER HAS ACQUIRED SUCH WARRANT FOR INVESTMENT AND THAT THE HOLDER WILL NOT SELL OR OTHERWISE DISPOSE OF THIS WARRANT WITHOUT REGISTRATION OR OTHER COMPLIANCE WITH THE ACT AND THE RULES AND REGULATIONS THEREUNDER.

 

TEXTURA CORPORATION
 WARRANT TO PURCHASE [     ] SHARES OF COMMON STOCK

 

Date of Grant:  [·], 20      

 

THIS CERTIFIES THAT, for value received, Aon Risk Services Central, Inc., an Illinois corporation, with an address of 200 East Randolph Street, Chicago, Illinois 60601 (the “Holder”), is entitled to subscribe for and purchase (subject to the terms and conditions below) from Textura Corporation, a Delaware corporation (the “Company”), [•] shares of Common Stock, subject to adjustment pursuant to Section 5(b) (the “Warrant Shares”).  This warrant and all warrants issued in substitution or exchange herefor are herein individually called a “Warrant.”

 

Section 1.                                           Definitions.  As used herein, the following terms shall have the following meanings:

 

(a)                                 “Common Stock” means shares of common stock of the Company, par value $.001 per share.

 

(b)                                 “Grant Date” shall mean [•], 2010.

 

Section 2.                                           Term.  Subject to the provisions of this Warrant, the purchase right represented by this Warrant is exercisable, in whole or in part, at any time after the date hereof, but before 5:00 p.m. Central Time on [5 Year Anniversary of Referral Fee Agreement Effective Date] (the “Expiration Time”).

 

Section 3.                                           Method of Exercise.  The purchase right represented by this Warrant may be exercised by the Holder hereof by delivering the following to the principal office of the Company for receipt prior to the Expiration Time: (a) the notice of exercise form attached hereto as Exhibit A duly completed and executed and (b) the payment to the Company, by certified or bank check or by wire transfer, of an amount equal to the then applicable Warrant Price (as defined in Section 5(a) below) multiplied by the number of Warrant Shares being purchased. Warrant Shares issued shall be deemed to have been issued immediately prior to the close of

 

 

business (Chicago, Illinois time) on the date or dates upon which this Warrant is exercised and the then applicable Warrant Price paid.  In the event of any exercise of the rights represented by this Warrant, certificates for the Warrant Shares so purchased shall be delivered to the Holder as soon as possible and in any event within ten (10) days of receipt of such notice of exercise and payment of the then applicable Warrant Price.

 

Section 4.                                           Warrant Shares Fully Paid, Reservation of Warrant Shares.  The Company shall reserve at all times so long as this Warrant remains outstanding, free from preemptive rights (other than certain preemptive and other approval rights provided in the Company’s bylaws which have been waived and/or consented to by the Company’s existing stockholders) out of its authorized but unissued Common Stock, a sufficient number of shares of Common Stock to provide for the issuance of Common Stock upon the exercise of this Warrant.  All Warrant Shares will, upon issuance by the Company, be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof.

 

Section 5.                                           Warrant Price and Adjustment to Warrant Price.

 

(a)                                 Warrant Price.  Subject to Section 5(b), the purchase price (“Warrant Price”) shall be equal to $26.50 per Warrant Share.

 

(b)                                 Adjustments on Reclassification or Merger.  If, through or as a result of any merger, consolidation, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction,

 

(i)                                     the number of shares of Common Stock outstanding is increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or

 

(ii)                                  additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to the Common Stock or other securities,

 

an appropriate and proportionate adjustment shall be made in (x) the maximum number and kind of Warrant Shares purchasable pursuant to this Warrant, (y) the number and kind of shares or other securities purchasable pursuant to this Warrant, and (z) the Warrant Price for each Warrant Share purchasable pursuant to this Warrant, without changing the aggregate purchase price as to which this Warrant may then be exercised.  For the avoidance of doubt, (i) the issuance of shares of Common Stock, options to purchase Common Stock or other equity-based awards to the Company’s directors and employees pursuant to the Company’s employee benefit plans, or (ii) the issuance of shares of Common Stock and options or warrants to purchase Common Stock to service providers and vendors of the Company, in each case pursuant to employee benefit plans, agreements or other arrangements approved by the Company’s board of directors, shall not result in any adjustments pursuant to this Section 5(b).

 

(c)                                  Fractional Shares.  No fractional shares of Common Stock shall be issued or cash payment made in connection with any adjustment pursuant to Section 5(b).  Any

 

2

 

fractional share of Common Stock issuable pursuant to this Warrant shall be rounded up if one-half share or more, or rounded down if less than one-half share.

 

(d)                                 Notice of Adjustments.  Whenever the Warrant Price or number of Warrant Shares shall be adjusted pursuant to the provisions of Section 5(b), the Company shall within ten (10) days of such adjustment deliver a certificate signed by an officer of the Company to the registered Holder(s) hereof setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the new Warrant Price and the aggregate number of securities then purchasable pursuant to this Warrant after giving effect to such adjustment.

 

Section 6.                                           No Impairment.  The Company will not, by amendment of its Certificate of Incorporation or bylaws or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions hereof, including, without limitation, Section 5 hereof, and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.

 

Section 7.                                           Compliance with the Act; Disposition of Warrant.

 

(a)                                 Compliance with the Act.  The Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances which will not result in a violation of the Act.  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the form of the legend set forth on the first page above.

 

(b)                                 Disposition of Warrant.  This Warrant may not be sold, assigned, offered, pledged or otherwise transferred without registration under applicable federal and state securities laws, unless the Company receives an opinion of counsel reasonably acceptable to the Company, stating that such sale, assignment, offer, pledge or other transfer is exempt from registration and prospectus delivery requirements of federal and state securities laws.  This Warrant and all rights hereunder are not transferable, in whole or in part, without the prior written consent of the Company, which consent shall not be unreasonably withheld.  The Warrant Shares issuable upon exercise of this Warrant shall be subject to certain transfer restrictions contained in the Company’s bylaws, as amended.

 

Section 8.                                           Rights as a Stockholder.  No Holder of this Warrant, as such, shall be entitled to vote or receive distributions or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise of this Warrant for any purpose, nor shall anything contained herein be construed to confer upon the Holder of this Warrant, as such, any of the rights of a stockholder of the Company or any voting rights, or to

 

3

 

receive notice of meetings, or to receive distributions or subscription rights or otherwise until this Warrant shall have been exercised.

 

Section 9.                                           Representations and Warranties.  This Warrant is issued and delivered on the basis of the following:

 

(a)                                 Authorization and Delivery.  The Company represents and warrants that this Warrant has been duly authorized and executed by the Company and when delivered will be the valid and binding obligation of the Company enforceable in accordance with its terms.

 

(b)                                 No Inconsistency.  The Company represents and warrants that the execution and delivery of this Warrant, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof (i) are not and will not be, inconsistent with the Company’s Certificate of Incorporation or bylaws (other than certain preemptive and other approval rights provided in the Company’s bylaws which have been waived and/or consented to by the Company’s existing stockholders), each as amended, (ii) do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, (iii) do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound and (iv) will not require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any Federal, state or local government authority or agency or other person.

 

(c)                                  Accredited Investor.  The Holder represents and warrants that as of the Grant Date it is an “accredited investor” (as that term is defined in Regulation D promulgated under the Act) and agrees that it will not exercise this Warrant unless, at the time of any exercise, it is an accredited investor and has confirmed the same to the Company.

 

Section 10.                                    Miscellaneous Provisions.

 

(a)                                 Modification and Waiver.  This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

(b)                                 Notices.  Any notice, request or other document required or permitted to be given or delivered hereunder shall be in writing and sent by first class mail addressed to the address set forth on the signature page hereto, in the case of the Company, and in the first paragraph hereof, in the case of the Holder, by personal delivery, or by telecopy with proof of receipt, and shall be deemed received upon actual receipt or four business days after mailing.

 

(c)                                  Binding Effect on Successors.  This Warrant shall be binding upon any entity succeeding the Company by merger or consolidation, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall be as set forth in the Company’s Certificate of Incorporation and bylaws (each as

 

4

 

amended from time to time) and shall survive the exercise and termination of this Warrant and all of the covenants and agreements herein and in such other documents and instruments of the Company shall inure to the benefit of the successors and assigns of the Holder hereof.

 

(d)                                 Lost Warrants or Stock Certificates.  The Company covenants to the Holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate issuable hereunder and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

 

(e)                                  Headings.  Section headings used in this Warrant are for convenience of reference only and are not a part of this Warrant for any other purpose.

 

(f)                                   Governing Law.  THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF ILLINOIS. ANY DISPUTE ARISING IN CONNECTION WITH THIS WARRANT OR ANY MATTER RELATED TO THIS WARRANT SHALL BE HEARD ONLY IN A COURT LOCATED IN CHICAGO, ILLINOIS.

 

*                                         *                                         *                                         *

 

5

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officers and to be dated the Grant Date hereof

 

	
 
    	
TEXTURA   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
1405   Lake Cook Road
    
	
 
    	
Deerfield, Illinois   60015
    
	
 
    	
Attention:
    	
Patrick   Allin
    
	
 
    	
Telephone:
    	
(708)   337-2146
    
	
 
    	
Telecopy:
    	
(847)   582-1037
    
				

 

[Signature Page to Textura Corporation Warrant]

 

 

EXHIBIT A

 

Notice of Exercise

 

To:                             Textura Corporation

 

1.                                      The undersigned hereby elects to purchase                          shares of Common Stock, par value $.001 per share (the “Warrant Shares”) of Textura Corporation, a Delaware corporation (the “Company”) pursuant to the terms of a Warrant to Purchase Common Stock with a Grant Date of [·], 2010, and tenders herewith payment of the purchase price of such Warrant Shares in full.

 

2.                                      Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below:

 

                                                                                    
 Name

 

                                                                                    
 Address

 

3.                                      The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

4.                                      The undersigned hereby acknowledges and agrees that all shares of Common Stock issued pursuant to this Warrant are subject to and bound by, the terms, rights, powers, preferences, restrictions and obligations provided for in the Company’s certificate of incorporation and bylaws (copies of which has been previously provided to the Holder) applicable to all stockholders of the Company.

 

	
 
    	
 
    	
Holder:
    	
                                                          
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:                                      ,   20       
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:Exhibit 4.18

	
 
    

 

 

SECOND AMENDED AND RESTATED

 

TRUST AGREEMENT

 

AMONG

 

CNA FINANCIAL CORPORATION, AS DEPOSITOR,

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
 AS PROPERTY TRUSTEE

 

BNY MELLON TRUST OF DELAWARE,
 AS DELAWARE TRUSTEE,

 

AND

 

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

 

DATED AS OF         

 

CNA FINANCIAL CAPITAL [      ]

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I
    	
DEFINED TERMS
    	
1
    
	
Section 1.1
    	
Definitions
    	
1
    
	
ARTICLE II
    	
ESTABLISHMENT OF THE TRUST
    	
9
    
	
Section 2.1
    	
Name
    	
9
    
	
Section 2.2
    	
Office of the Delaware Trustee; Principal Place of   Business
    	
9
    
	
Section 2.3
    	
Initial Contribution of Trust Property;   Organizational Expenses
    	
9
    
	
Section 2.4
    	
Issuance of the Trust Securities
    	
10
    
	
Section 2.5
    	
Subscription and Purchase of Debentures
    	
10
    
	
Section 2.6
    	
Declaration of Trust
    	
10
    
	
Section 2.7
    	
Authorization to Enter into Certain Transactions
    	
11
    
	
Section 2.8
    	
Assets of Trust
    	
14
    
	
Section 2.9
    	
Title to Trust Property
    	
14
    
	
ARTICLE III
    	
PAYMENT ACCOUNT
    	
14
    
	
Section 3.1
    	
Payment Account
    	
14
    
	
ARTICLE IV
    	
DISTRIBUTIONS; REDEMPTION
    	
15
    
	
Section 4.1
    	
Distributions
    	
15
    
	
Section 4.2
    	
Redemption
    	
16
    
	
Section 4.3
    	
Subordination of Common Securities
    	
18
    
	
Section 4.4
    	
Payment Procedures
    	
18
    
	
Section 4.5
    	
Tax Returns and Reports
    	
19
    
	
Section 4.6
    	
Payment of Taxes, Duties, Etc
    	
19
    
	
Section 4.7
    	
Reduction for Payments Under Junior Indenture
    	
19
    
	
ARTICLE V
    	
TRUST SECURITIES CERTIFICATES
    	
19
    
	
Section 5.1
    	
Initial Ownership
    	
19
    
	
Section 5.2
    	
The Trust Securities Certificates
    	
20
    
	
Section 5.3
    	
Execution and Delivery of Trust Securities   Certificates
    	
20
    
	
Section 5.4
    	
Registration of Transfer and Exchange of Preferred   Securities Certificates
    	
20
    
	
Section 5.5
    	
Mutilated, Destroyed, Lost or Stolen Trust   Securities Certificates
    	
21
    
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 5.6
    	
Persons Deemed Securityholders
    	
21
    
	
Section 5.7
    	
Access to List of Securityholders’ Names and   Addresses
    	
21
    
	
Section 5.8
    	
Maintenance of Office or Agency
    	
22
    
	
Section 5.9
    	
Appointment of Paying Agent
    	
22
    
	
Section 5.10
    	
Ownership of Common Securities by Depositor; no   Transfer
    	
23
    
	
Section 5.11
    	
Book-Entry Preferred Securities Certificates;   Common Securities Certificate
    	
23
    
	
Section 5.12
    	
Notices to Clearing Agency
    	
24
    
	
Section 5.13
    	
Issuance of Definitive Preferred Securities   Certificates
    	
24
    
	
Section 5.14
    	
Rights of Securityholders
    	
25
    
	
ARTICLE VI
    	
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
    	
27
    
	
Section 6.1
    	
Limitations on Voting Rights
    	
27
    
	
Section 6.2
    	
Notice of Meetings
    	
28
    
	
Section 6.3
    	
Meetings of Preferred Securityholders
    	
28
    
	
Section 6.4
    	
Voting Rights
    	
28
    
	
Section 6.5
    	
Proxies, Etc
    	
28
    
	
Section 6.6
    	
Securityholder Action by Written Consent
    	
29
    
	
Section 6.7
    	
Record Date for Voting and Other Purposes
    	
29
    
	
Section 6.8
    	
Acts of Securityholders
    	
29
    
	
Section 6.9
    	
Inspection of Records
    	
31
    
	
ARTICLE VII
    	
REPRESENTATIONS AND WARRANTIES
    	
31
    
	
Section 7.1
    	
Representations and Warranties of the Bank and the   Bank (Delaware)
    	
31
    
	
Section 7.2
    	
Representations and Warranties of Depositor
    	
32
    
	
ARTICLE VIII
    	
THE TRUSTEES
    	
32
    
	
Section 8.1
    	
Certain Duties and Responsibilities
    	
32
    
	
Section 8.2
    	
Notices of Defaults and Payment Deferrals
    	
34
    
	
Section 8.3
    	
Certain Rights of Property Trustee
    	
34
    
	
Section 8.4
    	
Not Responsible for Recitals or Issuance of   Securities
    	
36
    
	
Section 8.5
    	
May Hold Securities
    	
36
    
	
Section 8.6
    	
Compensation; Indemnity; Fees
    	
37
    
				

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 8.7
    	
Corporate Property Trustee Required; Eligibility   of Trustees
    	
37
    
	
Section 8.8
    	
Conflicting Interests
    	
38
    
	
Section 8.9
    	
Co-Trustees and Separate Trustee
    	
38
    
	
Section 8.10
    	
Resignation and Removal; Appointment of Successor
    	
39
    
	
Section 8.11
    	
Acceptance of Appointment by Successor
    	
41
    
	
Section 8.12
    	
Merger, Conversion, Consolidation or Succession to   Business
    	
42
    
	
Section 8.13
    	
Preferential Collection of Claims Against   Depositor or Trust
    	
42
    
	
Section 8.14
    	
Reports by Property Trustee
    	
42
    
	
Section 8.15
    	
Reports to the Property Trustee
    	
42
    
	
Section 8.16
    	
Evidence of Compliance with Conditions Precedent
    	
43
    
	
Section 8.17
    	
Number of Trustees
    	
43
    
	
Section 8.18
    	
Delegation of Power
    	
43
    
	
Section 8.19
    	
Voting
    	
43
    
	
ARTICLE IX
    	
TERMINATION, LIQUIDATION AND MERGER
    	
44
    
	
Section 9.1
    	
Termination Upon Expiration Date
    	
44
    
	
Section 9.2
    	
Early Termination
    	
44
    
	
Section 9.3
    	
Termination
    	
44
    
	
Section 9.4
    	
Liquidation
    	
45
    
	
Section 9.5
    	
Mergers, Consolidations, Amalgamations or   Replacements of the Trust
    	
46
    
	
ARTICLE X
    	
MISCELLANEOUS PROVISIONS
    	
47
    
	
Section 10.1
    	
Limitation of Rights of Securityholders
    	
47
    
	
Section 10.2
    	
Amendment
    	
47
    
	
Section 10.3
    	
Separability
    	
49
    
	
Section 10.4
    	
Governing Law
    	
49
    
	
Section 10.5
    	
Payments Due on Non-Business Day
    	
49
    
	
Section 10.6
    	
Successors
    	
49
    
	
Section 10.7
    	
Headings
    	
49
    
	
Section 10.8
    	
Reports, Notices and Demands
    	
49
    
	
Section 10.9
    	
Trust Indenture Act; Conflict with Trust Indenture   Act
    	
50
    
				

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 10.10
    	
Acceptance of Terms of Trust Agreement, Guarantee   and Junior Indenture
    	
50
    

 

iv

 

CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO SECTION 310
 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:

 

	
TRUST INDENTURE
   ACT SECTION
    	
 
    	
 
    	
 
    	
TRUST
   AGREEMENT SECTION
    	
 
    
	
Section 310
    	
 
    	
(a)(1)
    	
 
    	
8.7
    	
 
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
8.7
    	
 
    
	
 
    	
 
    	
(a)(3)
    	
 
    	
8.9
    	
 
    
	
 
    	
 
    	
(a)(4)
    	
 
    	
2.7(a) (ii)
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
8.8
    	
 
    
	
Section 311
    	
 
    	
(a)
    	
 
    	
8.13
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
8.13
    	
 
    
	
Section 312
    	
 
    	
(a)
    	
 
    	
5.7
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
5.7
    	
 
    
	
 
    	
 
    	
(c)
    	
 
    	
5.7
    	
 
    
	
Section 313
    	
 
    	
(a)
    	
 
    	
8.14(a)
    	
 
    
	
 
    	
 
    	
(a)(4)
    	
 
    	
8.14(b)
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
8.14(b)
    	
 
    
	
 
    	
 
    	
(c)
    	
 
    	
10.8
    	
 
    
	
 
    	
 
    	
(d)
    	
 
    	
8.14(c)
    	
 
    
	
Section 314
    	
 
    	
(a)
    	
 
    	
8.15
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(c)(1)
    	
 
    	
8.16
    	
 
    
	
 
    	
 
    	
(c)(2)
    	
 
    	
8.16
    	
 
    
	
 
    	
 
    	
(c)(3)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(d)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(e)
    	
 
    	
1.1, 8.16
    	
 
    
	
Section 315
    	
 
    	
(a)
    	
 
    	
8.1(a), 8.3(a)
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
8.2, 10.8
    	
 
    
	
 
    	
 
    	
(c)
    	
 
    	
8.1(a)
    	
 
    
	
 
    	
 
    	
(d)
    	
 
    	
8.1, 8.3
    	
 
    
	
 
    	
 
    	
(e)
    	
 
    	
Not Applicable
    	
 
    
	
Section 316
    	
 
    	
(a)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(a)(1)(A)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(a)(1)(B)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(c)
    	
 
    	
6.7
    	
 
    
	
Section 317
    	
 
    	
(a)(1)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(a)(2)
    	
 
    	
Not Applicable
    	
 
    
	
 
    	
 
    	
(b)
    	
 
    	
5.9
    	
 
    
	
Section 318
    	
 
    	
(a)
    	
 
    	
10.9
    	
 
    

 

Note: This reconciliation and tie sheet shall not, for any purposes, be deemed to be a part of this Trust Agreement.

 

 

SECOND AMENDED AND RESTATED TRUST AGREEMENT, dated as of       ,       , among (i) CNA Financial Corporation, a Delaware corporation (including any successors or assigns, the “Depositor”), (ii) The Bank of New York Mellon Trust Company, N.A., a national banking association, as property trustee, (in such capacity, the “Property Trustee,” and in its separate corporate capacity and not in its capacity as Property Trustee, the “Bank” (iii) BNY Mellon Trust of Delaware, a national banking association, as Delaware trustee (in such capacity, “Delaware Trustee,” and, in its separate corporate capacity and not in its capacity as Delaware Trustee, the “Bank (Delaware)”), (iv) D. Craig Mense, an individual, and Albert J. Miralles, Jr., an individual, each of whose address is c/o CNA Financial Corporation, 333 South Wabash Avenue, Chicago, Illinois 60604 (each an “Administrative Trustee” and collectively the “Administrative Trustees”) (the Property Trustee, the Delaware Trustee and the Administrative Trustees referred to collectively as the “Trustees”) and (iv) the several Holders, as hereinafter defined.

 

WITNESSETH

 

WHEREAS, the Depositor and certain of the Trustees have heretofore duly declared and established a business trust pursuant to the Delaware Business Trust Act by the entering into that certain Trust Agreement, dated as of December 23, 1998 (the “Original Trust Agreement”), and by the execution and filing with the Secretary of State of the State of Delaware of the Certificate of Trust, filed on December 23, 1998, attached as Exhibit A hereto; and

 

WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Securities (as hereinafter defined) by the Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities (as hereinafter defined) by the Trust pursuant to the Underwriting Agreement (as hereinafter defined), (iii) the acquisition by the Trust from the Depositor of all of the right, title and interest in the Junior Debt Securities (as hereinafter defined) and (iv) the appointment of the Administrative Trustees;

 

NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows:

 

ARTICLE I

 

DEFINED TERMS

 

SECTION 1.1  DEFINITIONS.

 

For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)                                 the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

 

(b)                                 all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

(c)                                  unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Trust Agreement; and

 

(d)                                 the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision.

 

“Act” has the meaning specified in Section 6.8.

 

“Additional Amount” means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, the amount of Additional Interest or Additional Sums (as defined in the Junior Indenture), as applicable, paid by the Depositor on a Like Amount of Junior Debt Securities for such period.

 

“Additional Sums” has the meaning specified in Section 10.7 of the Junior Indenture.

 

“Administrative Trustee” means a Person satisfying the eligibility requirements set forth in Section 8.7(b) and initially means D. Craig Mense and Albert J. Miralles, Jr., solely in such Person’s capacity as Administrative Trustee of the Trust formed and continued hereunder and not in such Person’s individual capacity, or such Administrative Trustee’s successor in interest in such capacity, or any successor trustee appointed as herein provided.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Bank” has the meaning specified in the preamble to this Trust Agreement

 

“Bankruptcy Event” means, with respect to any Person:

 

(a)                                 the entry of a decree or order by a court having jurisdiction in the premises adjudging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

 

(b)                                 the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any

 

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applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of such Person, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt or insolvent, or the taking of corporate action by such Person in furtherance of any such action.

 

“Bankruptcy Laws” has the meaning specified in Section 10.9.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor’s Board of Directors, or such committee of the Board of Directors or officers of the Company to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Trustees.

 

“Book-Entry Preferred Securities Certificates” means certificates representing beneficial interests in the Preferred Securities, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 5.11.

 

“Business Day” means a day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed.

 

“Certificate Depository Agreement” means the agreement among the Trust, the Depositor and The Depository Trust Company, as the initial Clearing Agency, dated as of the Closing Date, relating to the Trust Securities Certificates, substantially in the form attached as Exhibit B, as the same may be amended and supplemented from time to time.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial Clearing Agency.

 

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Closing Date” means the Closing Time as defined in the Underwriting Agreement, which date is also the date of execution and delivery of this Trust Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

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“Common Security” means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $  and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

 

“Common Securities Certificate” means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit C.

 

“Corporate Trust Office” means the principal office of the Property Trustee located in Chicago, Illinois.

 

“Definitive Preferred Securities Certificates” means Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.13.

 

“Delaware Business Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. 3801, et seq., as it may be amended from time to time.

 

“Delaware Trustee” means the corporation identified as the “Delaware Trustee” in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided.

 

“Depositor” has the meaning specified in the preamble to this Trust Agreement.

 

“Distribution Date” has the meaning specified in Section 4.1(a).

 

“Distributions” means amounts payable in respect of the Trust Securities as provided in Section 4.1.

 

“Event of Default” means the occurrence of a Junior Debt Related Event of Default.

 

“Expense Agreement” means the Agreement as to Expenses and Liabilities between the Depositor and the Trust, substantially in the form attached as Exhibit D, as amended from time to time.

 

“Expiration Period” has the meaning specified in Section 3.11 of the Junior Indenture.

 

“Extension Date” has the meaning specified in Section 9.1.

 

“Guarantee” means the Guarantee Agreement executed and delivered by the Depositor and The Bank of New York Mellon Trust Company, N.A., as trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the holders of the Preferred Securities, as amended from time to time.

 

“Junior Debt Related Event of Default” means an “Event of Default” as defined in the Junior Indenture.

 

4

 

“Junior Debt Securities” means the aggregate principal amount of the Depositor’s Junior Subordinated Deferrable Interest Junior Debt Securities, Series       , issued pursuant to the Junior Indenture.

 

“Junior Debt Security Investment Company Event” means an “Investment Company Event” as defined in the Junior Indenture.

 

“Junior Debt Security Redemption Date” means, with respect to any Junior Debt Securities to be redeemed under the Junior Indenture, the date fixed for redemption under the Junior Indenture.

 

“Junior Debt Security Tax Event” means a “Tax Event” as defined in the Junior Indenture.

 

“Junior Indenture” means the Junior Subordinated Indenture, dated as of       ,       , between the Depositor and the Junior Indenture Trustee, as trustee, as amended or supplemented from time to time.

 

“Junior Indenture Trustee” means The Bank of New York Mellon Trust Company, N.A., a national banking association organized and any successor thereto.

 

“Lien” means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever.

 

“Like Amount” means (a) with respect to a redemption of Trust Securities, Trust Securities having a Liquidation Amount equal to that portion of the principal amount of Junior Debt Securities to be contemporaneously redeemed in accordance with the Junior Indenture, allocated to the Common Securities and to the Preferred Securities based on their relative Liquidation Amounts and the proceeds of which will be used to pay the Redemption Price of such Trust Securities, and (b) with respect to a distribution of Junior Debt Securities to Holders of Trust Securities in connection with a dissolution and liquidation of the Trust, Junior Debt Securities having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Junior Debt Securities are distributed.

 

“Liquidation Amount” means the stated amount of $ per Trust Security.

 

“Liquidation Date” means the date on which Junior Debt Securities are to be distributed to Holders of Trust Securities in connection with a termination and liquidation of the Trust pursuant to Section 9.4.

 

“Liquidation Distribution” has the meaning specified in Section 9.4(d).

 

“1940 Act” means the Investment Company Act of 1940, as amended.

 

“Officers’ Certificate” means a certificate signed by the Chairman and Chief Executive Officer, President or any Senior Vice President or Group Vice President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant

 

5

 

Secretary, of the Depositor, and delivered to the appropriate Trustee. One of the officers signing an Officers’ Certificate given pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include:

 

(a)                                 a statement that each officer signing the Officers’ Certificate has read the covenant or condition and the definitions relating thereto;

 

(b)                                 a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers’ Certificate;

 

(c)                                  a statement that each such officer has made such examination or investigation as, in such officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)                                 a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

 

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee.

 

“Original Trust Agreement” has the meaning specified in the recitals to this Trust Agreement.

 

“Outstanding”, when used with respect to Preferred Securities, means, as of the date of determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except:

 

(a)                                 Trust Securities theretofore cancelled by the Property Trustee or delivered to the Property Trustee for cancellation;

 

(b)                                 Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Trust Securities; provided that, if such Preferred Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement;

 

(c)                                  Trust Securities which have been paid or in exchange for or in lieu of which other Preferred Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; and

 

(d)                                 as provided in Section 9.4(c).

 

provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, any Administrative Trustee or any Affiliate of the Depositor or any Administrative Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any

 

6

 

Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities that such Trustee knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the Outstanding Preferred Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate. Preferred Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee’s right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor.

 

“Owner” means each Person who is the beneficial owner of a Book-Entry Preferred Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency).

 

“Paying Agent” means any paying agent or co-paying agent appointed pursuant to Section 5.9 and shall initially be the Bank.

 

“Payment Account” means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Bank in its trust department for the benefit of the Securityholders in which all amounts paid in respect of the Junior Debt Securities will be held and from which the Property Trustee shall make payments to the Securityholders in accordance with Article Four.

 

“Person” means any individual, corporation, partnership, joint venture, trust, association, joint stock company, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

 

“Preferred Security” means a preferred undivided beneficial interest in the assets of the Trust, designated as “      % “ having a Liquidation Amount of $       and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

 

“Preferred Securities Certificate” means a certificate evidencing ownership of one or more Preferred Securities, substantially in the form attached as Exhibit E.

 

“Property Trustee” means the commercial bank or trust company identified as the “Property Trustee” in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust heretofore formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as herein provided.

 

“Redemption Date” means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Junior Debt Security Redemption Date and the stated maturity of the Junior Debt Securities shall be a Redemption Date for a Like Amount of Trust Securities.

 

7

 

“Redemption Price” means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to the Redemption Date, [plus the related amount of the premium, if any,] paid by the Depositor upon the concurrent redemption of a Like Amount of Junior Debt Securities, allocated on a pro rata basis (based on Liquidation Amounts) among the Trust Securities, subject to the provisions contained herein.

 

“Relevant Trustee” shall have the meaning specified in Section 8.10.

 

“Securities Register” and “Securities Registrar” have the respective meanings specified in Section 5.4.

 

“Securityholder” or “Holder” means a Person in whose name a Trust Security or Securities is registered in the Securities Register; any such Person shall be deemed to be a beneficial owner within the meaning of the Delaware Business Trust Act.

 

“Special Event” means “Special Event” as defined in the Junior Indenture.

 

“Trust” means the Delaware business trust continued hereby and identified on the cover page to this Trust Agreement.

 

“Trust Agreement” means this Second Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including all exhibits hereto, including, for all purposes of this Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and any such modification, amendment or supplement, respectively.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, including the rules duly adopted by the Commission thereunder; 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 Property” means (a) the Junior Debt Securities, (b) the rights under the Guarantee, (c) any cash on deposit in, or owing to, the Payment Account and (d) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to this Trust Agreement.

 

“Trust Security” means any one of the Common Securities or the Preferred Securities.

 

“Trust Securities Certificate” means any one of the Common Securities Certificates or the Preferred Securities Certificates.

 

“Trustees” means, collectively, the Property Trustee, the Delaware Trustee and the Administrative Trustees.

 

8

 

“Underwriting Agreement” means the Terms Agreement, dated as of       ,       , among the Trust, the Depositor and the Underwriters named therein incorporating the Underwriting Agreement Standard Provisions.

 

ARTICLE II

 

ESTABLISHMENT OF THE TRUST

 

SECTION 2.1  NAME.

 

The Trust continued hereby shall be known as “CNA Financial Capital [      ],” as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

 

SECTION 2.2  OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.

 

The address of the Delaware Trustee in the State of Delaware is 300 King Street, Wilmington, Delaware 19801, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Depositor. The principal executive office of the Trust is c/o CNA Financial Corporation, 333 South Wabash Avenue, Chicago, Illinois 60604.

 

SECTION 2.3  INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.

 

(a)                                 The Trustees acknowledge receipt from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property.

 

(b)                                 The Depositor shall be responsible for and shall pay for all obligations (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 issuance and sale of the Preferred Securities, the fees and expenses (including reasonable counsel fees and expenses) of the Trustees as provided in Section 8.7 the costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, Paying Agent(s), Securities Registrar, duplication, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the disposition of Trust assets).

 

(c)                                  The Depositor will pay any and all taxes of the Trust (other than United States withholding taxes attributable to the Trust or its assets) and all liabilities, costs and expenses with respect to such taxes.

 

(d)                                 The Depositor’s obligations under this Section 2.3 shall be for the benefit of, and shall be enforceable by, the Property Trustee and any Person to whom any such obligations, costs, expenses and taxes are owed (a “Creditor”) whether or not such Creditor has received notice hereof. The Property Trustee and any such Creditor may enforce the Depositor’s

 

9

 

obligations under this Section 2.3 directly against the Depositor and the Depositor irrevocably waives any right or remedy to require that the Property Trustee or any such Creditor take any action against the Trust or any other Person before proceeding against the Depositor. The Depositor agrees to execute such additional agreements as may be necessary or desirable in order to give full effect to the provisions of this Section 2.3.

 

(e)                                  The Depositor shall make no claim upon the Trust Property for the payment of such expenses.

 

SECTION 2.4  ISSUANCE OF THE TRUST SECURITIES.

 

On       , 20    , the Depositor, on behalf of the Trust and pursuant to the Original Trust Agreement, executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to the Underwriters named in the Underwriting Agreement Preferred Securities Certificates, [registered in the name of the nominee of the initial Clearing Agency,] in an aggregate amount of        Preferred Securities having an aggregate Liquidation Amount of $      , against receipt of such aggregate purchase price of such Preferred Securities of $      , which amount the Administrative Trustee shall promptly deliver to the Property Trustee. Contemporaneously with the execution and delivery of this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to the Depositor a Common Securities Certificate, registered in the name of the Depositor, in an aggregate amount of        Common Securities having an aggregate Liquidation Amount of $       against payment by the Depositor of such amount, which amount such Administrative Trustee shall promptly deliver to the Property Trustee.

 

SECTION 2.5  SUBSCRIPTION AND PURCHASE OF DEBENTURES.

 

Contemporaneously with the execution of this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase from the Depositor Junior Debt Securities, registered in the name of the Trust and having an aggregate principal amount equal to $      , and, in satisfaction of the purchase price for such Junior Debt Securities, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $      , such amount being the sum of the amounts delivered to the Property Trustee pursuant to Section 2.4 and (ii) the first sentence of this Section 2.5.

 

SECTION 2.6  DECLARATION OF TRUST.

 

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 Junior Debt Securities, and (b) to engage in those activities necessary, convenient or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property upon and subject to the conditions set forth herein for the benefit of the Securityholders. The Administrative Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the

 

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purposes of the Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of any of the Trustees set forth herein except as required by the Delaware Business Trust Act. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act.

 

SECTION 2.7  AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.

 

(a)                                 The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section 2.7, and in accordance with the following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following:

 

(i)                                     As among the Trustees, each Administrative Trustee shall have the exclusive power and authority to act on behalf of the Trust with respect to the following matters:

 

(A)                               the issuance and sale of the Trust Securities, including execution of any agreement, certificates evidencing Trust Securities or other documents necessary or advisable with respect to such issuance and sale;

 

(B)                               the purchase of the Junior Debt Securities

 

(C)                               to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the Expense Agreement and the Certificate Depository Agreement and such other agreements as may be necessary or desirable in connection with the purposes and function of the Trust;

 

(D)                               assisting in the registration of the Preferred Securities under the Securities Act of 1933, as amended, and under state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act;

 

(E)                                assisting in the listing of the Preferred Securities upon such securities exchange or exchanges as shall be determined by the Depositor and the registration of the Preferred Securities under the Securities Exchange Act of 1934, as amended, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing;

 

(F)                                 the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement;

 

11

 

(G)                               registering transfers and exchanges of the Preferred Securities in accordance with this Trust Agreement (but only if at such time the Property Trustee shall not be the Securities Registrar);

 

(H)                              to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware;

 

(I)                                   unless otherwise determined by the Depositor, the Property Trustee or the Administrative Trustees, or as otherwise required by the Delaware Business Trust Act or the Trust Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or all of the Administrative Trustees) any documents that the Administrative Trustees have the power to execute pursuant to this Trust Agreement; and

 

(J)                                   the taking of any action incidental to the foregoing as such Administrative Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder).

 

(ii)                                  As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters:

 

(A)                               the establishment and maintenance of the Payment Account and the appointment, subject to Section 5.9, of Paying Agents;

 

(B)                               the receipt and registered ownership of the Junior Debt Securities;

 

(C)                               the receipt of payments of the purchase price of the Trust Securities and the collection of interest, principal and any other payments made in respect of the Junior Debt Securities and deposit into the Payment Account;

 

(D)                               making Distributions and other payments to the Securityholders in respect of the Trust Securities;

 

(E)                                the exercise of all of the rights, powers and privileges of a holder of the Junior Debt Securities, subject to the terms of the Junior Indenture;

 

(F)                                 the sending of notices of default, redemption, Extension Periods, Special Events, liquidation and other information regarding the Trust Securities and the Junior Debt Securities to the Securityholders in accordance with this Trust Agreement;

 

(G)                               to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust, including, the distribution of the Trust Property in accordance with the terms of this Trust Agreement and the

 

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preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware;

 

(H)                              after an Event of Default, the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder);

 

(I)                                   so long as the Property Trustee is the Securities Registrar, registering transfers and exchanges of the Preferred Securities in accordance with this Trust Agreement; and

 

(J)                                   except as otherwise provided in this Section 2.7(a)(ii) or as required by the Trust Indenture Act, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Administrative Trustees set forth in Section 2.7(a)(i).

 

(b)                                 So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees shall not cause the Trust to (i) acquire any assets or make any investments (other than the Junior Debt Securities) or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to fail or cease to qualify as a “grantor trust” for United States Federal income tax purposes, (iv) make any loans (other than the Junior Debt Securities) or incur any indebtedness for borrowed money or issue any other debt, (v) issue any securities or other evidences of beneficial ownership of, or beneficial interests in the Trust other than the Trust Securities or (vi) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Administrative Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders.

 

(c)                                  In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects):

 

(i)                                     the preparation and filing by the Trust with the Commission and the execution on behalf of the Trust of a registration statement on the appropriate form in relation to the Preferred Securities, including any amendments thereto;

 

(ii)                                  the determination of the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and the doing of any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advising the Trustees of actions they must take on behalf of the Trust, and the preparation

 

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for execution and filing of any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States;

 

(iii)                               the preparation for filing by the Trust and execution on behalf of the Trust of an application to The New York Stock Exchange or any other national stock exchange or The Nasdaq Stock Market for listing upon notice of issuance of any Preferred Securities;

 

(iv)                              the preparation for filing by the Trust with the Commission and the execution on behalf of the Trust of a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto;

 

(v)                                 the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement providing for the sale of the Preferred Securities; and

 

(vi)                              the taking of any other actions necessary or desirable to carry out any of the foregoing activities.

 

(d)                                 Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so, that (i) the Trust will not be deemed to be an “investment company” required to be registered under the 1940 Act (ii) the Trust will be classified as a grantor trust for United States Federal income tax purposes and (iii) the Junior Debt Securities will be treated as indebtedness of the Depositor for United States Federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust, as amended from time to time, or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in their discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect in any material respect the interests of the holders of the Preferred Securities.

 

SECTION 2.8  ASSETS OF TRUST.

 

The assets of the Trust shall consist of the Trust Property.

 

SECTION 2.9  TITLE TO TRUST PROPERTY.

 

Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Trust and the Securityholders in accordance with this Trust Agreement.

 

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ARTICLE III

 

PAYMENT ACCOUNT

 

SECTION 3.1  PAYMENT ACCOUNT.

 

(a)                                 On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement; provided that any Paying Agent shall have the right of withdrawal with respect to the Payment Account solely for the purpose of making the payments contemplated under Article Four. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein.

 

(b)                                 The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments or proceeds with respect to, the Junior Debt Securities and any amounts paid to the Property Trustee pursuant to this Guarantee. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof.

 

ARTICLE IV

 

DISTRIBUTIONS; REDEMPTION

 

SECTION 4.1  DISTRIBUTIONS.

 

(a)                                 The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions (including any Additional Amounts) will be made on the Trust Securities at the rate [(or manner of calculation of the rate)] and on the dates that payments of interest (including any Additional Interest, as defined in the Junior Indenture) are made on the Junior Debt Securities. Accordingly:

 

(i)                                     Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there are funds of the Trust available for the payment of Distributions. Distributions shall accumulate from , , and, except in the event that the Depositor exercises its right to defer the payment of interest on the Junior Debt Securities pursuant to the Junior Indenture, shall be payable [quarterly] [monthly] [semi-annually] [annually] in arrears on [Insert Dates] of each year, commencing on , . If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall 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, payment of such Distribution shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date (each date on which distributions

 

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are payable in accordance with this Section 4.1(a), a “Distribution Date”). [insert alternative floating rate convention, if applicable]

 

Within two Business Days after receipt by the Property Trustee of notice of an Extension Period pursuant to Section 3.11 of the Junior Indenture, the Property Trustee shall give notice thereof to the Securityholders by first class mail, postage prepaid.

 

(ii)                                  Assuming payments of interest on the Junior Debt Securities are made when due (and before giving effect to Additional Amounts, if applicable), Distributions on the Trust Securities shall be payable at a rate of % per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any full period shall be computed on the basis of a 360-day year of twelve 30-day months. [insert alternative floating rate provisions, if applicable]. The amount of Distributions for any partial period shall be computed on the basis of the number of days elapsed in a 360-day year of twelve 30-day months. The amount of Distributions payable for any period shall include the Additional Amounts, if any.

 

(iii)                               Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand legally available in the Payment Account for the payment of such Distributions.

 

(iv)                              Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be [one Business Day prior to such Distribution Date; provided, however, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date] 15 days prior to the relevant Distribution Date.

 

SECTION 4.2  REDEMPTION.

 

(a)                                 Upon receipt by the Trust of a notice of redemption or other acceleration of the maturity of the Junior Debt Securities, the Property Trustee, subject to Section 4.3, will call for redemption a Like Amount of Trust Securities on the Junior Debt Security Redemption Date and will call for redemption all Outstanding Trust Securities on the stated maturity date of the Junior Debt Securities, in each case at the applicable Redemption Price.

 

(b)                                 Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder’s address appearing in the Security Register. All notices of redemption shall state:

 

(i)                                     the Redemption Date;

 

(ii)                                  the Redemption Price;

 

(iii)                               the CUSIP number;

 

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(iv)                              if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed;

 

(v)                                 the place or places where Trust Securities are to be surrendered for payment of the Redemption Price; and

 

(vi)                              that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accumulate on and after said date.

 

(c)                                  The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption or payment at maturity of Junior Debt Securities. Redemptions of the Trust Securities shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand legally available in the Payment Account for the payment of such Redemption Price.

 

(d)                                 If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then[, by 12:00 noon, New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long as the Preferred Securities are in book-entry-only form, irrevocably deposit with the Clearing Agency for the Preferred Securities funds sufficient to pay the applicable Redemption Price for the Preferred Securities being redeemed on such date and will give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders thereof. If the Preferred Securities are not in book-entry-only form,] the Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price to the Holders thereof upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price, but without interest, and such Securities will cease to be Outstanding. In the event that any date on which any Redemption Price is payable 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. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust Securities will continue to accumulate, at the then applicable rate, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price.

 

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(e)                                  Payment of accumulated and unpaid Distributions on the Redemption Date of the Trust Securities will be subject to the rights of Holders on the close of business on the relevant record date in respect of a Distribution Date occurring on or prior to such Redemption Date.

 

(f)                                   If less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated on a pro rata basis (based on Liquidation Amounts) among the Common Securities and the Preferred Securities. The particular Preferred Securities to be redeemed shall be selected) not more than 60 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption, by such method (including, without limitation, by lot) as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 or an integral multiple of $25 in excess thereof) of the Liquidation Amount of Preferred Securities of a denomination larger than $25. If fewer than all of the Trust Securities represented by a Trust Securities Certificate are redeemed, an Administrative Trustee shall execute for the Holder a new Trust Securities Certificate representing the unredeemed Trust Securities. The Property Trustee shall promptly notify the Security Registrar in writing of the Preferred Securities selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Preferred Securities that has been or is to be redeemed.

 

SECTION 4.3  SUBORDINATION OF COMMON SECURITIES.

 

(a)                                 Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price and/or Liquidation Distribution of, the Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata among the Common Securities and the Preferred Securities based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date, Redemption Date or Liquidation Date any Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional Amounts, if applicable) on, or Redemption Price and/or Liquidation Distribution of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment shall have been made or been provided for in full in cash of (i) all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, such Redemption Price on all Outstanding Preferred Securities then being redeemed, as applicable, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or the Redemption Price and/or Liquidation Distribution of, Preferred Securities then due and payable.

 

(b)                                 In the case of the occurrence of any Event of Default, the Holder of Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under this Trust Agreement until the effect of such Event of Default has been cured, waived or otherwise eliminated with respect to the Preferred Securities. Until any such Event of Default under this Trust Agreement has been so cured, waived or otherwise eliminated with

 

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respect to the Preferred Securities, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and not the Holder of the Common Securities, and only the Holders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf.

 

SECTION 4.4  PAYMENT PROCEDURES.

 

If the Preferred Securities are held by a Clearing Agency, payment of Distributions and any Redemption Price or Liquidation Distribution shall be made to the Clearing Agency in immediately available funds, which shall credit the relevant Persons’ accounts at such Clearing Agency on the applicable Distribution Dates. Payments of the Redemption Price or Liquidation Distribution in respect of Definitive Preferred Securities held in certificated form shall be made to the Holder thereof in immediately available funds upon surrender of the Preferred Securities Certificate representing such Definitive Preferred Securities at the Corporate Office of the Trustee. Payments of Distributions (including Additional Amounts, if applicable) in respect of Definitive Preferred Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register. Payments in respect of Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Common Securityholder.

 

SECTION 4.5  TAX RETURNS AND REPORTS.

 

The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor’s expense, and file all United States Federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. In this regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared and filed) the appropriate Internal Revenue Service Form required to be filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be prepared and furnished) to each Securityholder the appropriate Internal Revenue Service form required to be provided on such form. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. The Administrative Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities.

 

SECTION 4.6  PAYMENT OF TAXES, DUTIES, ETC. of the Trust.

 

Upon receipt under the Junior Debt Securities of Additional Sums and directions as to the payments of such Additional Sums, the Property Trustee shall promptly pay, solely out of monies on deposit pursuant to this Trust Agreement, any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority.

 

SECTION 4.7  REDUCTION FOR PAYMENTS UNDER JUNIOR INDENTURE.

 

Any amount payable hereunder to any Holder of Preferred Securities (and any Owner with respect thereto) shall be reduced by the amount of any corresponding payment such Holder (and Owner) has directly received pursuant to Section 5.8 of the Junior Indenture, Section 5.14 of this Trust Agreement or the Guarantee.

 

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ARTICLE V

 

TRUST SECURITIES CERTIFICATES

 

SECTION 5.1  INITIAL OWNERSHIP.

 

Upon the formation of the Trust and the contribution by the Depositor pursuant to Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust.

 

SECTION 5.2  THE TRUST SECURITIES CERTIFICATES.

 

The Preferred Securities Certificates shall be issued in minimum denominations of $Liquidation Amount and integral multiples of $in excess thereof, and the Common Securities Certificate shall be issued in an aggregate Liquidation Amount equal to $. Trust Securities Certificates representing fractional interests shall not be issued. The Trust Securities Certificates shall be executed on behalf of the Trust by manual signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee’s name pursuant to Sections 5.4, 5.11 and 5.13.

 

SECTION 5.3  EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.

 

On the Closing Date, the Administrative Trustees shall cause Preferred Securities Certificates and the Common Securities Certificates, in the respective aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed on behalf of the Trust as provided in Section 5.2 and delivered to or upon the written order of the Depositor, signed by its chairman of the board, its president, any executive vice president or any vice president, treasurer or assistant treasurer or controller without further corporate action by the Depositor.

 

SECTION 5.4  REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES CERTIFICATES.

 

The Depositor shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.8, a register or registers for the purpose of registering Trust Securities Certificates and transfers and exchanges of Preferred Securities Certificates (the “Securities Register”) in which, the registrar designated by the Depositor (the “Securities Registrar”), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Preferred Securities Certificates and the Common Securities Certificate (subject to Section 5.10 in the case of the Common Securities Certificates) and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Bank shall be the initial Securities Registrar; any successor Securities Registrar shall be appointed by the Administrative Trustees.

 

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Upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 5.8, the Administrative Trustees or any one of them shall execute and deliver, in the name of the designated transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of execution by such Administrative Trustee or Trustees.

 

The Securities Registrar shall not be required to register the transfer of any Preferred Securities that have been called for redemption. At the option of a Holder, Preferred Securities

 

Certificates may be exchanged for other Preferred Securities Certificates in authorized denominations and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificates to be exchanged at the office or agency maintained pursuant to Section V.8.

 

Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to Securities Registrar duly executed by the Holder or his attorney duly authorized in writing. Each Preferred Securities Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Securities Registrar in accordance with its customary practice.

 

No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Securities Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates (other than any exchange not involving a transfer).

 

SECTION 5.5  MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES.

 

If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its reasonable satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be reasonably required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust shall execute and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Securities Registrar 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 Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the Trust Property, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time.

 

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SECTION 5.6  PERSONS DEEMED SECURITYHOLDERS.

 

The Trustees, the Paying Agent or the Securities Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner and Holder of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and none of the Trustees, the Paying Agent or the Securities Registrar shall be bound by any notice to the contrary.

 

SECTION 5.7  ACCESS TO LIST OF SECURITYHOLDERS’ NAMES AND ADDRESSES.

 

(a)                                 The rights of Securityholders to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities, and the corresponding rights of the Trustee shall be as provided in the Trust Indenture Act. Each Securityholder, by receiving and holding a Trust Securities Certificate, and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee the Delaware Trustee, or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

In the event that the Property Trustee is no longer the Securities Registrar, the Administrative Trustees or the Depositor shall furnish or cause to be furnished a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Securityholders as of the most recent record date and (a) the Property Trustee, quarterly not later than 10 days prior to a Distribution Date and (b) to the Property Trustee, promptly after receipt by the Administrative Trustees, promptly after receipt by the Administrative Trustees or the Depositor of a request therefor from the Property Trustee in order to enable the Paying Agent to pay Distributions in accordance with Section 4.1 hereof, in each case to the extent such information is in the possession or control of the Administrative Trustees or the Depositor and is not identical to a previously supplied list or has not otherwise been received by the Property Trustee.

 

SECTION 5.8  MAINTENANCE OF OFFICE OR AGENCY.

 

The Property Trustee shall maintain in New York, New York and Chicago, Illinois, an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustees in respect of the Trust Securities Certificates may be served, initially located at                               . The Property Trustees shall give prompt written notice to the Depositor and to the Securityholders of any change in the location of the Securities Register or any such office or agency.

 

SECTION 5.9  APPOINTMENT OF PAYING AGENT.

 

The Paying Agent shall make Distributions to Securityholders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any

 

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material respect; provided that such revocation and removal with respect to the sole Paying Agent shall not become effective until the appointment of a successor. The Paying Agent shall initially be the Bank, and any co-paying agent chosen by the Bank, and acceptable to the Administrative Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that the Bank shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor that is acceptable to the Property Trustee (in the case of a Paying Agent other than the Bank) and the Depositor to act as Paying Agent (which shall be a bank or trust company meeting the eligibility requirements set forth in Section 6.9 of the Junior Indenture); provided that such resignation with respect to the sole Paying Agent shall not become effective until the appointment of a successor. The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

SECTION 5.10  OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR; NO TRANSFER.

 

On the Closing Date, the Depositor shall acquire and retain beneficial and record ownership of the Common Securities. To the fullest extent permitted by law, other than in connection with a consolidation or merger of the Depositor into another corporation, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person, pursuant to Section 8.1 of the Junior Indenture, any attempted transfer of the Common Securities shall be void. The Administrative Trustees shall cause the Common Securities Certificate issued to the Depositor to contain a legend stating “THIS CERTIFICATE IS NOT TRANSFERABLE”.

 

SECTION 5.11  BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES CERTIFICATE.

 

(a)                                 The Preferred Securities Certificates, upon original issuance, will be issued in the form of a Preferred Securities Certificate or Certificates representing [Definitive Preferred Securities or] Book-Entry Preferred Securities Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust. Book-Entry Preferred Securities Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will receive a Definitive Preferred Securities Certificate representing such Owner’s interest in such Preferred

 

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Securities, except as provided in Section 5.13. Unless and until Definitive Preferred Securities Certificates have been issued to Owners pursuant to Section 5.13:

 

(i)                                     the provisions of this Section 5.11(a) shall be in full force and effect;

 

(ii)                                  the Securities Registrar and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of the Redemption Price Amount of and Distributions on the Book-Entry Preferred Securities and the giving of instructions or directions to Owners of Book-Entry Preferred Securities) as the sole Holder of Book-Entry Preferred Securities and shall have no obligations to the Owners thereof;

 

(iii)                               to the extent that the provisions of this Section 5.11 conflict with any other provisions of this Trust Agreement, the provisions of this Section 5.11 shall control; and

 

(iv)                              the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants; provided, that solely for the purposes of determining whether the Holders of the requisite Liquidation Amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, so long as Definitive Preferred Security Certificates have not been issued, the Trustees may conclusively rely on, and shall be protected in relying on, any written instrument (including a proxy) delivered to the Trustees by the Clearing Agency setting forth the Owners’ votes or assigning the right to vote on any matter to any other Persons either in whole or in part. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 5.13, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants.

 

(b)                                 A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate.

 

SECTION 5.12  NOTICES TO CLEARING AGENCY.

 

To the extent that a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be given to Owners to the Clearing Agency, and shall have no obligations to the Owners.

 

SECTION 5.13  ISSUANCE OF DEFINITIVE PREFERRED SECURITIES CERTIFICATES.

 

If (a) the Depositor advises the Property Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Preferred Securities Certificates or that the Clearing Agency is no longer registered or in good standing under the Securities Act of 1934, as amended, or other applicable statute or regulation,

 

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and the Depositor is unable to locate a qualified successor within 90 days, (b) the Depositor at its option advises the Property Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (c) after the occurrence of an Event of Default, Owners of Book-Entry Preferred Securities Certificates representing beneficial interests aggregating at least a majority of the Liquidation Amount advise the Property Trustee in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interest of the Owners of Book-Entry Preferred Securities Certificates, then the Property Trustee shall instruct the Clearing Agency to notify all Owners of Preferred Securities Certificates and the other Trustees of the occurrence of any such event and of the availability of the Definitive Preferred Securities Certificates to Owners requesting the same. Upon surrender to the Property Trustees of the Preferred Securities Certificate or Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in authorized denominations in accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them.

 

SECTION 5.14  RIGHTS OF SECURITYHOLDERS.

 

(a)                                 The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.9, and the Securityholders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable by the Trust. The Holders of the Trust Securities, in their capacities as such, 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.

 

(b)                                 For so long as any Preferred Securities remain Outstanding, if, upon a Junior Debt Related Event of Default, the Junior Indenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Junior Debt Securities fail to declare the principal of all of the Junior Debt Securities to be immediately due and payable, the Holders of at least 25% in Liquidation Amount of the Preferred Securities then Outstanding shall have such right by a notice in writing to the Depositor and the Junior Indenture Trustee; and upon any such declaration such principal amount of and the accrued interest on all of the Junior Debt Securities shall become immediately due and payable, provided that the payment of principal and interest on such Junior Debt Securities shall remain subordinated to the extent provided in the Junior Indenture.

 

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At any time after such a declaration of acceleration with respect to the Junior Debt Securities has been made and before a judgment or decree for payment of the money due has been obtained by the Junior Indenture Trustee as in the Junior Indenture provided, the Holders of a majority in Liquidation Amount of the Preferred Securities, by written notice to the Property Trustee, the Depositor and the Junior Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i)                                     the Depositor has paid or deposited with the Debenture Trustee a sum sufficient to pay

 

(A)                               all overdue installments of interest (including any Additional Interest (as defined in the Junior Indenture)) on all of the Junior Debt Securities,

 

(B)                               the principal of (and premium, if any, on) any Junior Debt Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate then borne by the Junior Debt Securities, and

 

(C)                               all sums paid or advanced by the Junior Indenture Trustee under the Junior Indenture and the reasonable compensation, expenses, disbursements and advances of the Junior Indenture Trustee and the Property Trustee, their agents and counsel; and

 

(ii)                                  all Events of Default, other than the non-payment of the principal or premium, if any, of the Junior Debt Securities which has become due solely by such acceleration, have been cured or waived as provided in Section 5.13 of the Junior Indenture.

 

Upon receipt by the Property Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of the Preferred Securities, a record date shall be established for determining Holders of Outstanding Preferred Securities entitled to join in such notice, which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 5.14(b).

 

The holders of a majority in aggregate Liquidation Amount of the Preferred Securities may, on behalf of the holders of the Junior Debt Securities and the Holders of the related

 

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Preferred Securities, waive any past default under the Junior Indenture, except a default in they payment of principal, premium, if any, or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest, premium, if any, and principal due otherwise than by acceleration has been deposited with the Junior Indenture Trustee) or a default in respect of a covenant or provision which under the Junior Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Debt Security. No such recission shall affect any subsequent default or impair any right consequent thereon.

 

(c)                                  For so long as any Preferred Securities remain Outstanding, upon an Event of Default specified in Sections 5.1(a) or 5.1(b) of the Junior Indenture, any Holder of Preferred Securities shall have the right to institute a proceeding directly against the Depositor pursuant to Section 5.8 of the Junior Indenture for enforcement of payment to such Holders of the principal of or premium, if any, or interest on the Junior Debt Securities having a principal amount equal to the Liquidation Amount of the Preferred Securities of such Holder (a “Direct Action”).

 

Except as set forth in this Section 5.14(c) and Section 5.14(b) and Sections 5.12, 9.2 and 10.5 of the Junior Indenture, the Holders of Preferred Securities shall have no right to exercise directly any right or remedy available to the holders of, or in respect of, the Junior Debt Securities.

 

ARTICLE VI

 

ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

 

SECTION 6.1  LIMITATIONS ON VOTING RIGHTS.

 

(a)                                 Except as provided in this Section, in Sections 5.14, 8.10 and 10.2 and in the Junior Indenture and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association.

 

(b)                                 So long as any Junior Debt Securities are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Junior Indenture Trustee, or executing any trust or power conferred on the Junior Indenture Trustee with respect to the Junior Debt Securities, (ii) waive any past default which is waivable under Section 5.13 of the Junior Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Debt Securities shall be due and payable or (iv) consent to any amendment, modification or termination of the Junior Indenture or the Junior Debt Securities, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of a majority in Liquidation Amount of all Outstanding Preferred Securities, provided, however, that where a consent under the Junior Indenture would require the consent of each holder of Junior Debt Securities affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Preferred Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of Preferred Securities, except by a subsequent vote of the Holders of Preferred

 

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Securities. The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received from the Junior Indenture Trustee with respect to the Junior Debt Securities. In addition to obtaining the foregoing consents of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that the Trust will continue to qualify as a grantor trust for United States Federal income tax purposes after taking into account such action.

 

(c)                                  Subject to Section 10.2(c) hereof, if any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect in any material respect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Securities will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of a majority in Liquidation Amount of the Outstanding Preferred Securities. No amendment to this Trust Agreement may be made if, as a result of such amendment, the Trust would fail to qualify as a grantor trust for United States federal income tax purposes.

 

SECTION 6.2  NOTICE OF MEETINGS.

 

Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Preferred Securityholder of record, at its registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice.

 

SECTION 6.3  MEETINGS OF PREFERRED SECURITYHOLDERS.

 

No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Preferred Securityholders of 10% of the Outstanding Preferred Securities (based upon their Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are entitled to vote.

 

Preferred Securityholders of 50% of the Outstanding Preferred Securities (based upon their Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders.

 

If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of record present, in person or by proxy, holding a majority of the Preferred Securities (based upon their Liquidation Amount) held by the Preferred Securityholders present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes.

 

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SECTION 6.4  VOTING RIGHTS.

 

Securityholders shall be entitled to one vote for each $of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote.

 

SECTION 6.5  PROXIES, ETC.

 

At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders shall be entitled to vote. When Trust Securities are held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.

 

SECTION 6.6  SECURITYHOLDER ACTION BY WRITTEN CONSENT.

 

Any action which may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding a majority of all Preferred Trust Securities (based upon their Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing.

 

SECTION 6.7  RECORD DATE FOR VOTING AND OTHER PURPOSES.

 

For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of a Distribution or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes.

 

SECTION 6.8  ACTS OF SECURITYHOLDERS.

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders or Owners may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders or Owners in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective

 

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when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Securityholders or Owners signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor of the Trustees, if made in the manner provided in this Section.

 

Without limiting the generality of this Section 6.8, unless otherwise provided in or pursuant to this Trust Agreement, a Securityholder, including a Clearing Agency, may make, give or take, by a proxy, or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other act provided in or pursuant to this Trust Agreement to be made, given or taken by Securityholders, and a Clearing Agency that is a Securityholder may provide its proxy or proxies to the beneficial owners of interest the Trust Securities owned by such Clearing Agency through such Clearing Agency’s standing instructions and customary practices.

 

The Administrative Trustees shall fix a record date for the purpose of determining the Persons who are beneficial owners of interest in any Trust Securities held by a Clearing House entitled under the procedures of such Clearing House to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other act provided in or pursuant to this Trust Agreement to be made, given or taken by Securityholders. If such a record date is fixed, the Securityholders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other act, whether or not such Securityholders remain Securityholders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other act shall be valid or effective if made, given or taken more than 90 days after such record date.

 

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee receiving the same deems sufficient.

 

The ownership of Preferred Securities shall be proved by the Securities Register.

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.

 

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Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount.

 

If any dispute shall arise between the Securityholders and the Administrative Trustees or among such Securityholders or Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article 6, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter.

 

SECTION 6.9  INSPECTION OF RECORDS.

 

Upon reasonable notice to the Administrative Trustees and the Property Trustee, the records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder’s interest as a Securityholder.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 7.1  REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE BANK (DELAWARE).

 

The Bank and the Bank (Delaware), each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Securityholders that:

 

(a)                                 the Bank is a national banking association duly organized, validly existing and in good standing under the laws of the United States; The Bank (Delaware) is a Delaware banking corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; and The Bank (Delaware), as Delaware Trustee, fulfills for the trust the statutory requirements of Section 3807 of the Delaware Business Trust Act;

 

(b)                                 each of the Bank and the Bank (Delaware) has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement;

 

(c)                                  this Trust Agreement has been duly authorized, executed and delivered by the Bank and the Bank (Delaware) and constitutes the valid and legally binding agreement of the Bank and the Bank (Delaware) enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles;

 

(d)                                 the execution, delivery and performance by each of the Bank and the Bank (Delaware) of this Trust Agreement has been duly authorized by all necessary corporate or other action on the part of the Bank and the Bank (Delaware), respectively, and do not require any

 

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approval of stockholders of the Bank or the Bank (Delaware) and such execution, delivery and performance will not (i) violate the Bank’s or the Bank’s (Delaware) Charter or By-laws, (ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which the Bank or the Bank (Delaware) Trustee, as the case may be, is a party or by which it is bound, or (iii) violate any law, governmental rule or regulation of the United States or the State of Delaware, as the case may be, governing the corporate, banking or trust powers of the Bank or the Bank (Delaware) (as appropriate in context) or any order, judgment or decree applicable to the Bank or the Bank (Delaware);

 

(e)                                  neither the authorization, execution or delivery by the Bank or the Bank (Delaware) of this Trust Agreement nor the consummation of any of the transactions by the Bank or the Bank (Delaware) (as the case may be) contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing Federal law governing the corporate, banking or trust powers of the Bank or the Bank (Delaware), as appropriate in context, under the laws of the United States or the State of Delaware;

 

(f)                                   there are no proceedings pending or, to the best of each of the Bank’s and the Bank’s (Delaware) knowledge, threatened against or affecting the Bank or the Bank (Delaware) in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Bank or the Bank (Delaware), as the case may be, to enter into or perform its obligations as one of the Trustees under this Trust Agreement.

 

SECTION 7.2  REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.

 

The Depositor hereby represents and warrants for the benefit of the Securityholders that:

 

(a)                                 the Trust Securities Certificates issued on behalf of the Trust have been duly authorized and have been, duly and validly executed, issued and delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Securityholders will be entitled to the benefits of this Trust Agreement; and

 

(b)                                 there are no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with the execution, delivery and performance by the Bank, the Property Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement.

 

ARTICLE VIII

 

THE TRUSTEES

 

SECTION 8.1  CERTAIN DUTIES AND RESPONSIBILITIES.

 

(a)                                 The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee by the Trust Indenture Act. Notwithstanding

 

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the foregoing, no provision of this Trust Agreement shall require the Trustees to expend or risk their own funds or otherwise incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. To the extent that, at law or in equity, an Administrative Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the Securityholders, such Administrative Trustee shall not be liable to the Trust or to any Securityholder for such Trustee’s good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Administrative Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of the Administrative Trustees.

 

(b)                                 Except during the continuance of an Event of Default,

 

(i)                                     each of the Property Trustee, the Delaware Trustee and the Administrative Trustees undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against any of the Property Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the Property Trustee, the Delaware Trustee and the Administrative Trustees may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to such Person and conforming to the requirements of this ; but in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to any such Person, such Person shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Trust Agreement.

 

(c)                                  In case an Event of Default has occurred and is continuing, the Property Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

 

(d)                                 All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.1(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.

 

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(e)                                  No provision of this Trust Agreement 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)                                     the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts;

 

(ii)                                  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 a majority in Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement;

 

(iii)                               the Property Trustee’s sole duty with respect to the custody, safe keeping and physical preservation of the Junior Debt Securities and the Payment 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 Trust Agreement and the Trust Indenture Act;

 

(iv)                              the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor; and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; and

 

(v)                                 the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor.

 

SECTION 8.2  NOTICES OF DEFAULTS AND PAYMENT DEFERRALS.

 

Within ninety calendar days after the occurrence of any Event of Default or Junior Debt Security Tax Event actually known to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such Event of Default to the Securityholders, the Administrative Trustees and the Depositor, unless such Event of Default shall have been cured or waived.

 

Within five Business Days after the receipt of notice of the Depositor’s exercise of its right to defer the payment of interest on the Junior Debt Securities pursuant to the Junior Indenture, the Administrative Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such exercise to the Securityholders and the Property Trustee, unless such exercise shall have been revoked.

 

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SECTION 8.3  CERTAIN RIGHTS OF PROPERTY TRUSTEE.

 

Subject to the provisions of Section VIII.1:

 

(a)                                 the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)                                 if, other than during the occurrence and continuance of an Event of Default, (i) in performing its duties under this Trust Agreement, the Property Trustee is required to decide between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor and the Property Trustee shall be fully protected in acting in accordance with such instructions; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct;

 

(c)                                  any direction or act of the Depositor or the Administrative Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers’ Certificate;

 

(d)                                 whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be established before undertaking, 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 Depositor or the Administrative Trustees;

 

(e)                                  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 reregistration thereof;

 

(f)                                   the Property Trustee may consult with counsel (which counsel may be counsel to the Depositor or any of its Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action

 

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taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction;

 

(g)                                  the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(h)                                 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, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Securityholders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit;

 

(i)                                     the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, provided that the Property Trustee shall be responsible for its own negligence or recklessness with respect to selection of any agent or attorney appointed by it hereunder;

 

(i)                                     whenever in the administration of this Trust Agreement 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

 

(j)                                    except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement.

 

No provision of this Trust Agreement 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 8.4  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

 

The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Depositor, and the Trustees do not assume any responsibility for their correctness (except to the extent they are incorporated into the Statement of Eligibility on Form T-1 provided by the Property Trustee to Depositor in connection herewith). The Trustees shall

 

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not be accountable for the use or application by the Depositor of the proceeds of the Junior Debt Securities.

 

SECTION 8.5  MAY HOLD SECURITIES.

 

Except as provided in the definition of the term “Outstanding” in Article I, any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent.

 

SECTION 8.6  COMPENSATION; INDEMNITY; FEES.

 

The Depositor agrees:

 

(a)                                 to pay to the Trustees from time to time reasonable compensation for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(b)                                 except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, bad faith or willful misconduct; and

 

(c)                                  to indemnify each of the Trustees or any predecessor Trustee for, and to hold the Trustees harmless against, any loss, damage, claims, liability, penalty or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Trust Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

 

No Trustee may claim any lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.6.

 

The provisions of this Section 8.6 shall survive the termination of this Trust Agreement or the resignation or removal of any Trustee.

 

SECTION 8.7  CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.

 

(a)                                 There shall at all times be a Property Trustee hereunder. The Property Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of

 

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condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

(b)                                 There shall at all times be one or more Administrative Trustees hereunder. Each Administrative 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 persons authorized to bind that entity.

 

(c)                                  There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law that shall act through one or more persons authorized to bind such entity.

 

SECTION 8.8  CONFLICTING INTERESTS.

 

If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. Subject to the foregoing, the Depositor and any 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 shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. Neither the Depositor nor any 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 the Depositor or any 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 Trustee may engage in any financial or other transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or its Affiliates.

 

SECTION 8.9  CO-TRUSTEES AND SEPARATE TRUSTEE.

 

Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Trustees, shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power

 

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deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Any co-trustee or separate trustee appointed pursuant to this Section shall either be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such entity.

 

Should any written instrument from the Depositor be required by any co- trustee or separate trustee so appointed for more fully confirming to such co- trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor.

 

Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely:

 

(a)                                 the Trust Securities shall be executed and delivered, and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees specified hereunder shall be exercised, solely by such Trustees and not by such co-trustee or separate trustee;

 

(b)                                 the rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee;

 

(c)                                  the Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case an Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor; upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal; and a successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section;

 

(d)                                 no co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee hereunder;

 

(e)                                  the Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee; and

 

(f)                                   any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

 

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SECTION 8.10  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

 

No resignation or removal of any Trustee (the “Relevant Trustee”) and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 8.11.

 

Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time with respect to the Trust Securities by giving written notice thereof to the Securityholders.

 

If the instrument of acceptance by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee (or to the Common Securityholder, if the Relevant Trustee is an Administrative Trustee) within 30 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the expense of the Depositor, any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities.

 

Unless an Event of Default shall have occurred and be continuing, any Trustee may be removed at any time by Act of the Common Securityholder. If an Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by Act of the Holders of a majority in Liquidation Amount of the Outstanding Preferred Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be removed by the Common Securityholder at any time.

 

If any Trustee shall resign, be removed or become incapable of acting as Trustee, or if a vacancy shall occur in the office of any Trustee for any cause, at a time when no Event of Default shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder delivered to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees with respect to the Trust Securities and the Trust, and the retiring Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when an Event of Default shall have occurred and be continuing, the Preferred Securityholders, by Act of the Securityholders of a majority in Liquidation Amount of the Preferred Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with respect to the Trust Securities and the Trust, and such successor Trustee shall comply with the applicable requirements of Section 8.11.

 

If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, regardless of whether an Event of Default shall have occurred and be continuing, the Common Securityholder by Act of the Common Securityholder delivered to the Administrative Trustee shall promptly appoint a successor Administrative Trustee or Administrative Trustees with respect to the Trust Securities and the Trust, and such successor Administrative Trustee or Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee with respect to the Trust Securities shall have been so appointed by the Common Securityholder or the Preferred Securityholders and accepted

 

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appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee with respect to the Trust Securities.

 

The Property Trustee shall give notice of each resignation and each removal of a Trustee and each appointment of a successor Trustee to all Securityholders in the manner provided in Section 10.8 and shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee.

 

Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (a) the unanimous act of remaining Administrative Trustees if there are at least two of them or (b) otherwise by the Depositor (with the successor in each case being a Person who satisfies the eligibility requirement for Administrative Trustees set forth in Section 8.7).

 

SECTION 8.11  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

 

In case of the appointment hereunder of a successor Trustee such successor Trustee so appointed shall execute, acknowledge and deliver to the Trust and to the retiring Trustee (or to the Common Securityholder, if the retiring Trustee is an Administrative Trustee) an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Depositor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and if the Property Trustee is the resigning Trustee shall duly assign, transfer and deliver to the successor Trustee all property and money held by such retiring Property Trustee hereunder.

 

In case of the appointment hereunder of a successor Relevant Trustee with respect to the Trust Securities and the Trust, the retiring Relevant Trustee and each successor Relevant Trustee with respect to the Trust Securities shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust and (b) shall add to or change any of the provisions of this Trust Agreement as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Relevant Trustee, it being understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees of the same trust and that each such Relevant Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such

 

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successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust.

 

Upon request of any such successor Relevant Trustee, the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

 

No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article.

 

SECTION 8.12  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

 

Any corporation into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

 

SECTION 8.13  PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.

 

If and when the Property Trustee or the Delaware Trustee shall be or become a creditor (whether directly or indirectly Secured or Unsecured) of the Depositor or the Trust (or any other obligor upon the Junior Debt Securities or the Trust Securities), the Property Trustee or the Delaware Trustee, as the case may be, shall be subject to and shall take all actions necessary in order to comply with the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor).

 

SECTION 8.14  REPORTS BY PROPERTY TRUSTEE.

 

The Property Trustee shall transmit to Preferred Securityholders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Property Trustee shall, within 60 days after each following the date of the Trust Agreement deliver to Holders a brief report, dated as of , which complies with the provisions of such Section 313(a).

 

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with each stock exchange upon which any Preferred Securities are then

 

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listed, with the Commission and with the Trust. The Trust will promptly notify the Property Trustee when any Preferred Securities are listed on any stock exchange.

 

SECTION 8.15  REPORTS TO THE PROPERTY TRUSTEE.

 

The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314(a) 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 8.16  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

 

Each of the Depositor and the Administrative 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 Trust 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) of the Trust Indenture Act shall be given in the form of an Officers’ Certificate.

 

SECTION 8.17  NUMBER OF TRUSTEES.

 

(a)                                 The number of Trustees shall be five, provided that the Holder of all of the Common Securities by written instrument may increase or decrease the number of Administrative Trustees; provided, however, that there shall at all times be at least one Administrative Trustee. The Property Trustee and the Delaware Trustee may be the same Person if the Property Trustee meets the applicable requirements.

 

(b)                                 If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10.

 

(c)                                  The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement.

 

SECTION 8.18  DELEGATION OF POWER.

 

(a)                                 Any Administrative 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 2.7(a), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and

 

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(b)                                 The Administrative Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative 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 8.19  VOTING.

 

Except as otherwise provided in this Trust Agreement, the consent or approval of the Administrative Trustees shall require consent or approval by not less than a majority of the Administrative Trustees, unless there are only two, in which case both must consent.

 

ARTICLE IX

 

TERMINATION, LIQUIDATION AND MERGER

 

SECTION 9.1  TERMINATION UPON EXPIRATION DATE.

 

Unless earlier terminated, the Trust shall automatically terminate on ,       (the “Expiration Date”), following the distribution of the Trust Property in accordance with Section 9.4.

 

SECTION 9.2  EARLY TERMINATION.

 

The first to occur of any of the following events is an “Early Termination Event”:

 

(a)                                 the occurrence of a Bankruptcy Event in respect of, or the dissolution, liquidation or winding-up of, the Depositor;

 

(b)                                 the direction to the Property Trustee from the Depositor at any time (which direction is optional and wholly within the discretion of the Depositor) to terminate the Trust and distribute a Like Amount of Junior Debt Securities to Securityholders of Trust Securities.

 

(c)                                  the redemption of all of the Trust Securities; and

 

(d)                                 the entry of an order for dissolution of the Trust by a court of competent jurisdiction.

 

The direction of the Depositor pursuant to Section 9.2(b) shall be made in writing by the Depositor and specify the date of distribution of the Junior Debt Securities, which shall not be less than less than 30 days after the date of the delivery of such direction.

 

The election of the Depositor pursuant to Section 9.2(b) shall be made by the Depositor giving written notice to the Trustees not less than 30 days prior to the date of distribution of the Junior Debt Securities. Such notice shall specify the date of distribution of the Junior Debt Securities and shall be accompanied by an Opinion of Counsel that such event will not be a taxable event to the Holders of the Preferred Securities for Federal income tax purposes.

 

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SECTION 9.3  TERMINATION.

 

The respective obligations and responsibilities of the Trustees and the Trust created and continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or upon the redemption of all of the Trust Securities pursuant to Section 4.2, of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders.

 

SECTION 9.4  LIQUIDATION.

 

(a)                                 If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously as the Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each Securityholder a Like Amount of Junior Debt Securities, subject to clause (d) below. Notice of liquidation shall be given by the Property Trustee by first-class mail, postage prepaid mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder’s address appearing in the Securities Register. All notices of liquidation shall:

 

(i)                                     state the Liquidation Date;

 

(ii)                                  state that from and after the Liquidation Date the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Junior Debt Securities; and

 

(iii)                               provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Junior Debt Securities or, if clause (d) below applies, receive a Liquidation Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate.

 

(b)                                 In order to effect the liquidation of the Trust and distribution of the Junior Debt Securities to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Junior Debt Securities in exchange for the Outstanding Trust Securities Certificates.

 

(c)                                  Except where Section 9.2(c) or clause (d) below applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Junior Debt Securities will be issued to holders of Trust Securities Certificates, upon surrender of such certificates to the Administrative Trustees or their agent for exchange, (iii) the Depositor shall use its commercially practicable efforts to have the Junior Debt Securities listed on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory organization as the Preferred Securities are then listed, if any, (iv) any Trust Securities Certificates not so surrendered for exchange will be

 

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deemed to represent a Like Amount of Junior Debt Securities, accruing interest at the rate provided for in the Junior Debt Securities from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates with respect to such Junior Debt Securities) and (v) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive Junior Debt Securities upon surrender of Trust Securities Certificates.

 

(d)                                 In the event that, notwithstanding the other provisions of this Section 9.4, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Junior Debt Securities in the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property shall be liquidated, and the Trust shall be dissolved, wound-up or terminated, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution, winding-up or other termination of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the “Liquidation Distribution”). If, upon any such 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, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The holder of the Common Securities will be entitled to receive the Liquidation Distribution upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Holders of Preferred Securities, except that, if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities, and no Liquidation Distribution shall be paid to the Holders of the Common Securities unless and until receipt by all Holders of the Preferred Securities of the entire Liquidation Distribution payable in respect thereof.

 

SECTION 9.5  MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST.

 

The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any corporation or other body, except pursuant to this Section IX.5. At the request of the Depositor, with the consent of only the Administrative Trustees and without the consent of the Holders of the Preferred Securities, the Property Trustee or the Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to a trust organized as such under the laws of any State; provided, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Preferred Securities or (b) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the “Successor Securities”) so long as the Successor Securities rank the same as the Preferred Securities rank in priority with respect to Distributions and payments upon liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Junior Debt

 

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Securities, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities) to be downgraded or placed under surveillance or review by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect, (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (c) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust (or any successor entity) will continue to be classified as a grantor trust for United States Federal income tax purposes and (viii) the Depositor owns all of the Common Securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States Federal income tax purposes.

 

ARTICLE X

 

MISCELLANEOUS PROVISIONS

 

SECTION 10.1  LIMITATION OF RIGHTS OF SECURITYHOLDERS.

 

The death or incapacity of any person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, nor entitle the legal representatives or heirs of such person or any Securityholder for such person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

 

SECTION 10.2  AMENDMENT.

 

(a)                                 This Trust Agreement may be amended from time to time by the Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or

 

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to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will be classified for United States Federal income tax purposes as a grantor trust at all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to register as an investment company under the 1940 Act; provided, however, that such action shall not adversely affect in any material respect the interests of any Securityholder, and any amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders.

 

(b)                                 Except as provided in Section 6.1 and 10.2(c) hereof, any provision of this Trust Agreement may be amended by the Trustees and the Depositor with (i) the consent of Trust Securityholders representing a majority (based upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust’s status as a grantor trust for United States Federal income tax purposes or the Trust’s exemption from status of an investment company under the 1940 Act.

 

(c)                                  In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Article Six hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date, (ii) change the redemption provisions of the Trust Securities, (iii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment contemplated in (i) or (ii) above on or after such date, (iv) modify the first sentence of Section 2.6 hereof, (v) authorize or issue any beneficial interest in the Trust other than as contemplated by this Trust Agreement, (vi) change the conditions precedent for the Depositor to elect to dissolve the Trust and distribute the Debentures to Holders of the Trust Securities as set forth in Section 9.2, or (vii) affect the limited liability of any Holder of Preferred Securities; and notwithstanding any other provision herein, without the unanimous consent of the Securityholders (such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of this Section 10.2 may not be amended.

 

(d)                                 Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the exemption from status of an investment company under the 1940 Act or fail or cease to be classified as a grantor trust for United States Federal income tax purposes.

 

(e)                                  Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor, the Property Trustee or the Delaware Trustee (as the case may be), this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor, the Property Trustee or the Delaware Trustee, respectively.

 

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(f)                                   In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment.

 

(g)                                  Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officers’ Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement.

 

SECTION 10.3  SEPARABILITY.

 

In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 10.4  GOVERNING LAW.

 

This Trust Agreement and the rights and obligations of each of the Securityholders, the Trust and the Trustees with respect to this Trust Agreement and the Trust Securities shall be construed in accordance with and governed by the laws of the State of Delaware without regard to conflict of laws principles.

 

SECTION 10.5  PAYMENTS DUE ON NON-BUSINESS DAY.

 

If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be made on the next succeeding day that is a Business Day (except as otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as though made on the date fixed for such payment, and no interest shall accrue thereon for the period after such date [insert alternative floating rate conversion, if applicable].

 

SECTION 10.6  SUCCESSORS.

 

This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust or the Relevant Trustee, including any successor by operation of law. Except in connection with a consolidation, merger or sale involving the Depositor that is permitted under Article Eight of the Junior Indenture and pursuant to which the assignee agrees in writing to perform the Depositor’s obligations hereunder, the Depositor shall not assign its obligations hereunder.

 

SECTION 10.7  HEADINGS.

 

The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement.

 

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SECTION 10.8  REPORTS, NOTICES AND DEMANDS.

 

Any report, notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Preferred Securityholder, to such Preferred Securityholder as such Securityholder’s name and address may appear on the Securities Register; and (b) in the case of the Common Securityholder or the Depositor, to CNA Financial Corporation, 333 South Wabash Avenue, Chicago, Illinois 60604, Attention:                   , facsimile no.: (312)  . Any notice to Preferred Securityholders shall also be given to such owners as have, within two years preceding the giving of such notice, filed their names and addresses with the Property Trustee for that purpose.

 

Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission.

 

Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee or the Administrative Trustees shall be given in writing addressed (until another address is published by the Trust) as follows: (a) with respect to the Property Trustee to The Bank of New York Mellon Trust Company, N.A., [insert address]; (b) with respect to the Delaware Trustee, to BNY Mellon Trust of Delaware, [insert address]; and (c) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked “Attention Administrative Trustees of CNA Financial Capital [I][II][III].” Such notice, demand or other communication to or upon the Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust or the Property Trustee.

 

SECTION 10.9  TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.

 

(a)                                 This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement 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 any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required provision shall control. If any provision of this Trust Agreement modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Trust Agreement as so modified or excluded, as the case may be.

 

(d)                                 The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust.

 

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SECTION 10.10  ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND JUNIOR INDENTURE.

 

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE JUNIOR INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.

 

	
 
    	
CNA   Financial Corporation,
    
	
 
    	
as   Depositor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
The   Bank of New York Mellon Trust Company,
   N.A., as Property Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
BNY   Mellon Trust of Delaware,
    
	
 
    	
as   Delaware Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
D.   Craig Mense,
    
	
 
    	
as   Administrative Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Albert   J. Miralles, Jr.,
    
	
 
    	
as   Administrative Trustee
    

 

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