EXHIBIT 99.3
FORM OF
EXCHANGE AGENCY AGREEMENT
October 16, 1997
The Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
The First American Financial Corporation, a California corporation, as
Depositor (the "Company") and First American Capital Trust I, a trust created
under the laws of the state of Delaware (the "Trust"), hereby appoint
Wilmington Trust Company to act as exchange agent (the "Exchange Agent") in
connection with an exchange offer by the Company and the Trust to exchange up
to $100,000,000 aggregate liquidation amount of the Trust's 8.50% Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "New
Securities"), which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like aggregate liquidation amount of the
Trust's outstanding 8.50% Capital Securities (Liquidation Amount $1,000 per
Capital Security) (the "Old Securities"). The terms and conditions of the
exchange offer are set forth in a Prospectus dated October 16, 1997 (as the
same may be amended or supplemented from time to time, the "Prospectus") and
in the related Letter of Transmittal, which together constitute the "Exchange
Offer." The registered holders of the Capital Securities are hereinafter
referred to as the "Holders." Capitalized terms used herein and not defined
shall have the respective meanings assigned thereto in the Prospectus.
The Exchange Offer is expected to be commenced by the Trust on or about
October 16, 1997. The Letter of Transmittal accompanying the Prospectus is to
be used by the holders of the Old Securities to accept the Exchange Offer and
contains instructions with respect to (i) the delivery of certificates for Old
Securities tendered in connection therewith and (ii) the book-entry transfer
of Old Securities to the Exchange Agent's account.
The Exchange Offer shall expire at 5:00 p.m. New York City time, on
November 17, 1997 or on such later date or time to which the Trust may extend
the Exchange Offer from time to time by giving oral (to be confirmed in
writing) or written notice to the Exchange Agent before 9:00 a.m., New York
City time, on the business day following the previously scheduled Expiration
Date.
The Company and the Trust each expressly reserves the right to amend or
terminate the Exchange Offer, and not to accept for exchange any Old
Securities not theretofore accepted for exchange, based upon any conditions of
the Exchange Offer described in the Prospectus. The Trust will give oral (to
be confirmed in writing) or written notice of any amendment, termination or
nonacceptance of Old Securities to the Exchange Agent promptly after any
amendment, termination or nonacceptance.
On the basis of the representations, warranties and agreements of the
Company, the Trust and the Exchange Agent contained herein and subject to the
terms and conditions hereof, the following sets forth the agreement between
the Company, the Trust and the Exchange Agent for the Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company and the Trust hereby authorize and appoint the
Wilmington Trust Company to act as Exchange Agent in connection with the
Exchange Offer and Wilmington Trust Company agrees to act as Exchange Agent in
connection with the Exchange Offer. As Exchange Agent, Wilmington Trust
Company will perform only those services as are specifically set forth in the
section of the Prospectus captioned "The Exchange Offer" and as are outlined
herein.
b. The Company and the Trust acknowledge and agree that Wilmington
Trust Company has been retained pursuant to this Agreement to act solely as
Exchange Agent in connection with the Exchange Offer, and in such capacity,
the Exchange Agent shall perform such duties in good faith.
c. The Exchange Agent will establish an account with respect to the
Old Securities at The Depository Trust Company ("DTC") for the purposes of the
Exchange Offer within two business days after the date of the Prospectus, and
any financial institution that is a participant in DTC's system may make
book-entry delivery of the Old Securities by causing DTC to transfer such Old
Securities into the Exchange Agent's account in accordance with DTC's
procedure for such transfer.
d. The Exchange Agent will examine, or request a Regular Trustee of
the Trust or a Designated Officer (as defined below) to examine, each of the
Letters of Transmittal and certificates for Old Securities and any other
documents received by the Exchange Agent from or for Holders of the Old
Securities, and any book-entry confirmations (as defined in the Prospectus)
received by the Exchange Agent with respect to the Old Securities, to
ascertain whether: (i) the Letters of Transmittal and any such other
documents are duly executed and properly completed in accordance with the
instructions set forth therein and that such book-entry confirmations are in
due and proper form and contain the information required to be set forth
therein, (ii) the Old Securities have otherwise been properly tendered, and
(iii) Holders have provided their correct Tax Identification Number or
required certification. Determination of all questions as to validity, form,
eligibility and acceptance for exchange of any Old Securities shall be made by
the Company or the Trust, whose determination shall be final and binding. In
each case where the Letters of Transmittal or any other documents have been
improperly completed or executed or where book-entry confirmations are not in
due and proper form or omit certain information, or any of the certificates
for Old Securities are not in proper form for transfer or some other
irregularity in connection with the tender of the Old Securities exists, the
Exchange Agent will endeavor to advise the tendering Holders of the
irregularity and to take any other action may be necessary or advisable as to
cause such irregularity to be corrected. Notwithstanding the foregoing, the
Exchange Agent shall not incur any liability for failure to give any such
notification.
e. With the approval of any Regular Trustee of the Trust or any
person designated in writing by the Company (a "Designated Officer") (such
approval, if given orally, to be confirmed in writing) or any other party
designated by any such Regular Trustee or Designated Officer, the Exchange
Agent is authorized to waive any irregularities in connection with any tender
of Old Securities pursuant to the Exchange Offer.
f. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Old Securities shall be considered properly tendered only
when tendered in accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph, Old Securities which any
Regular Trustee or Designated Officer shall approve (such approval, if given
orally, to be confirmed in writing) as having been properly tendered shall be
considered to be properly tendered.
g. The Exchange Agent shall advise the Company and the Trust with
respect to any Old Securities received after 5:00 p.m., New York City time, on
the Expiration Date and accept their instructions with respect to disposition
of such Old Securities.
h. The Exchange Agent shall accept tenders:
(i) in cases where the Old Securities are registered in two or more
names only if signed by all named Holders;
(ii) in cases where the signing person (as indicated on the Letter
of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of such person's authority so to act is
submitted; and
(iii) from persons other than the registered Holder of Old
Securities, provided that customary transfer requirements are
fulfilled.
The Exchange Agent shall accept partial tenders of Old Securities where
so indicated and as permitted in the Letter of Transmittal and deliver
certificates for Old Securities to the transfer agent for split-up and return
any untendered Old Securities or Old Securities which have not been accepted
by the Company and the Trust to the Holder (or such other person as may be
designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of the Exchange Offer.
i. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Trust will notify the Exchange Agent (such notice if given
orally, to be confirmed in writing) of its acceptance, promptly after the
Expiration Date, of all Old Securities properly tendered and the Exchange
Agent, on behalf of the Trust, will exchange such Old Securities for New
Securities provided to it by or on behalf of the Trust and cause such Old
Securities to be canceled. Delivery of New Securities will be made on behalf
of the Trust by the Exchange Agent at the rate of $1,000 liquidation amount of
the corresponding series of Old Securities tendered promptly after notice
(such notice if given orally, to be confirmed in writing) of acceptance of
said Old Securities by the Trust; provided, however, that in all cases, Old
Securities tendered pursuant to the Exchange Offer will be exchanged only
after timely receipt by the Exchange Agent of certificates for such Old
Securities (or confirmation of book-entry transfer into the Exchange Agent's
account at DTC), a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) or Agent's Message in lieu thereof), with any required
signature guarantees and any other required documents.
j. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and the conditions set forth in the Prospectus and
the Letter of Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date.
k. The Trust shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company and the Trust not to exchange any Old
Securities tendered shall be given by the Company or the Trust orally (and
confirmed in writing) to the Exchange Agent.
l. If, pursuant to the Exchange Offer, the Company and the Trust do
not accept for exchange all or part of the Old Securities tendered because of
an invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer--Conditions to the Exchange
Offer" or otherwise, the Exchange Agent shall promptly after the expiration or
termination of the Exchange Offer return such certificates for unaccepted Old
Securities (or effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal relating thereto
that are in the Exchange Agent's possession, to the persons who deposited such
certificates.
m. Certificates for reissued Old Securities, unaccepted Old
Securities or New Securities shall be forwarded by (a) first-class certified
mail, return receipt requested under a blanket surety bond obtained by the
Exchange Agent at the expense of the Company protecting the Exchange Agent,
the Company and the Trust from loss or liability arising out of the
non-receipt or non-delivery or such certificates or (b) by registered mail
insured by the Exchange Agent at the expense of the Company separately for the
replacement value of each such certificate.
n. The Exchange Agent is not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer,
commercial bank, trust company or other persons or to engage or use any person
to solicit tenders.
o. As Exchange Agent, the Wilmington Trust Company:
(i) shall have no duties or obligations other than those
specifically set forth in the section of the Prospectus captioned "The
Exchange Offer," the Letter of Transmittal or herein or as may be
subsequently agreed to in writing;
(ii) will make no representations and will have no responsibilities
as to the validity, value or genuineness of any of the certificates for
the Old Securities deposited pursuant to the Exchange Offer or any
certificates for the New Securities issued pursuant to the Exchange
Offer, and will not be required to and will make no representation as
to the validity, value or genuineness of the Exchange Offer;
(iii) shall not be obligated to take any action hereunder which
might in the Exchange Agent's reasonable judgment involve any expense
or liability, unless the Exchange Agent shall have been furnished with
indemnity reasonably satisfactory to it;
(iv) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to the Exchange Agent
and reasonably believed by the Exchange Agent to be genuine and to have
been signed by the proper party or parties;
(v) may reasonably act upon any tender, statement, request,
agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as
to the truth and accuracy of any information contained therein, which
the Exchange Agent believes in good faith to be genuine and to have
been signed or represented by a proper person or persons;
(vi) may rely on and shall be protected in acting upon written or
oral instructions from any Regular Trustee or Designated Officer;
(vii) may consult with its own counsel with respect to any
questions relating to the Exchange Agent's duties and responsibilities
and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by the Exchange Agent hereunder in good faith and in
accordance with the advice or opinion of such counsel;
(viii) shall not advise any person tendering Old Securities pursuant
to the Exchange Offer as to whether to tender or refrain from tendering
all or any portion of its Old Securities or as to the market value,
decline or appreciation in market value of any Old Securities or as to
the market value of the New Securities; and
(ix) The Exchange Agent shall take such action as may from time to
time be requested by the Company or the Trust to furnish copies of the
Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery
or such other forms as may be approved from time to time by the Company
and the Trust, to all persons requesting such documents and to accept
and comply with telephone requests for information relating to the
procedures for accepting (or withdrawing from) the Exchange Offer. The
Company and the Trust will furnish you with copies of such documents at
your request.
p. The Exchange Agent shall advise by facsimile transmission or
telephone and promptly thereafter confirm in writing to the Company and the
Trust and such other persons as the Company and the Trust may request, daily
(and more frequently during the week immediately preceding the Expiration Date
and if otherwise requested by the Company), up to and including the Expiration
Date, the aggregate liquidation amount of Old Securities which have been
tendered pursuant to the Exchange Offer and the items received by the Exchange
Agent pursuant to the Exchange Offer and this Agreement, reporting separately
and cumulatively as to items properly received and items improperly received.
In addition, the Exchange Agent will also provide, and cooperate in making
available to the Company and the Trust or any such other persons as requested
from time to time, such other information in its possession as the Company and
the Trust may reasonably request. Such cooperation shall include, without
limitation, the granting by the Exchange Agent to the Company and the Trust,
and such persons as the Company and the Trust may request, of access to those
persons on the Exchange Agent's staff who are responsible for receiving
tenders, in order to ensure that immediately prior to the Expiration Date the
Company and the Trust shall have received information in sufficient detail to
enable the Company and the Trust to decide whether to extend the Exchange
Offer. The Exchange Agent shall prepare a final list of all persons whose
tenders were accepted, the aggregate liquidation amount of Old Securities
tendered and the aggregate liquidation amount of Old Securities accepted and
deliver said list to the Company and the Trust.
q. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery received by the Exchange Agent shall be stamped by the
Exchange Agent as to the date and time of receipt thereof and shall be
preserved by the Exchange Agent for a period of time at least equal to the
period of time the Exchange Agent preserves other records pertaining to the
transfer of securities, or one year, whichever is longer, and thereafter shall
be delivered by the Exchange Agent to the Company and the Trust. The Exchange
Agent shall dispose of unused Letters of Transmittal and other surplus
materials by returning them to the Company or the Trust.
r. The Exchange Agent hereby expressly waives any lien, encumbrance
or right of set-off whatsoever that the Exchange Agent may have respect to
funds deposited with it for the payment of transfer taxes by reasons of
amounts, if any, borrowed by the Company or the Trust or any of its or their
subsidiaries or affiliates pursuant to any loan or credit agreement with the
Exchange Agent or for compensation owed to the Exchange Agent hereunder or for
any other matter.
s. The Exchange Agent hereby acknowledges receipt of the Prospectus
and the Letter of Transmittal and the Notice of Guaranteed Delivery and
further acknowledges that it has examined each of them. Any inconsistency
between this Agreement, on the one hand, and the Prospectus and the Letter of
Transmittal and the Notice of Guaranteed Delivery (as they may be amended or
supplemented from time to time), on the other hand, shall be resolved in favor
of the latter three documents, except with respect to the duties, liabilities
and indemnification of the Exchange Agent which shall be controlled by this
Agreement.
2. COMPENSATION. As consideration for its agreement to perform the services
of Exchange Agent hereunder, the Company agrees to pay Wilmington Trust
Company the amounts set forth on Schedule I attached hereto at the times set
forth therein.
3. INDEMNIFICATION.
a. The Company hereby agrees to indemnify and hold harmless the
Exchange Agent against and from any and all costs, losses, liabilities and
expenses (including reasonable counsel fees and disbursements) arising out of
or in connection with any act, omission, delay or refusal made by the Exchange
Agent in reliance upon any signature, endorsement, assignment, certificate,
order, request, notice, instruction or other instrument or document reasonably
believed by the Exchange Agent to be valid, genuine and sufficient and in
accepting any tender or effecting any transfer of Old Securities reasonably
believed by the Exchange Agent in good faith to be authorized, and in delaying
or refusing in good faith to accept any tenders or effect any transfer of Old
Securities. Anything in this Agreement to the contrary notwithstanding, the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of the Exchange Agent's
bad faith, gross negligence or willful misconduct. In no case shall the
Company be liable under this indemnity with respect to any claim against the
Exchange Agent until the Company has received written notice from the Exchange
Agent of the assertion of a claim against the Exchange Agent or of any other
action commenced against the Exchange Agent, promptly after the Exchange Agent
shall have received any such written assertion or notice of commencement of
action. The Company shall be entitled to participate at its own expense in
the defense of any such claim or other action, and, if the Company so elects,
the Company may assume the defense of any pending or threatened action to
enforce any such claim. In the event that the Company shall assume the
defense of any such suit or threatened action in respect of which
indemnification may be sought hereunder, the Company shall not be liable for
the fees and expenses incurred thereafter of any additional counsel retained
by the Exchange Agent so long as the Exchange Agent consents to the Company's
retention of counsel, which consent may not be unreasonably withheld;
provided, however, that the Company shall not be entitled to assume the
defense of any such action if the named parties to such action include the
Company or the Trust and the Exchange Agent and representation of the parties
by the same legal counsel would, in the written opinion of counsel for the
Exchange Agent, be inappropriate due to actual or potential conflicting
interests among them. It is understood that neither the Company nor the Trust
shall be liable under this paragraph for the fees and disbursements of more
than one legal counsel for the Exchange Agent. In the event that the Company
shall assume the defense of any such suit with counsel reasonably acceptable
to the Exchange Agent, the Company shall not thereafter be liable for the fees
and expenses of any counsel retained by the Exchange Agent.
b. The Exchange Agent agrees that, without the prior written consent
of the Company (which consent shall not be unreasonably withheld), it will not
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification
could be sought in accordance with the indemnification provision of this
Agreement (whether or not the Exchange Agent, the Company or the Trust or any
of its directors, officers and controlling persons is an actual or potential
party to such claim, action or proceeding), unless such settlement, compromise
or consent includes an unconditional release of the Company and its directors,
officers and controlling persons, the Trust and its trustees thereof from all
liability arising out of such claim, action or proceeding.
4. TAX INFORMATION
a. The Company and the Trust understand that the Exchange Agent is
required, in certain instances, to withhold 31% with respect to interest paid
on the New Securities and proceeds from the sale, exchange, redemption or
retirement of the New Securities from Holders who have not supplied their
correct Taxpayer Identification Number or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations. The Exchange Agent shall notify the Company and the
Trust of any Holder who has failed to supply such Taxpayer Identification
Number or certification.
b. The Exchange Agent shall notify the Trust of the amount of any
transfer taxes payable in respect of the exchange of Old Securities of which
the Exchange Agent has actual knowledge.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with,the laws of the State of Delaware applicable to contracts
executed in and to be performed in that state without regard to conflicts of
laws principles.
6. NOTICES. Any communication or notice provided for hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon
receipt) by delivery in person, by telecopy, by overnight delivery service or
by registered or certified mail (postage prepaid, return receipt requested) to
the applicable party at the address indicated below:
If to the Company:
The First American Financial Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Secretary
Telecopier No.: (000) 000-0000
If to the Trust:
First American Capital Trust I
c/o The First American Financial Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Secretary
Telecopier No.: (000) 000-0000
If to the Exchange Agent:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Operations
Telecopier No.: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
party to the other parties hereto in a written notice complying as to delivery
with the terms of this Section.
7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their successors and assigns
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. Without limitation to the
foregoing, the parties hereto expressly agree that no holder of Old Securities
or New Securities shall have any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or
more counterparts, and each of such counterparts shall together constitute one
and the same agreement. If any term or other provision of this Agreement or
the application thereof is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the agreements contained herein is not affected in any
manner adverse to any party. Upon such determination that any term or
provision or the application thereof is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the agreements contained herein may be
performed as originally contemplated to the fullest extent possible.
9. CAPTIONS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended or modified nor may any provision hereof by
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earlier of (a) the
90th day following the expiration, withdrawal, or termination of the Exchange
Offer, (b) the close of business on the date of actual receipt of written
notice by the Exchange Agent from the Company and the Trust stating that this
Agreement is terminated, (c) one year following the date of this Agreement, or
(d) the time and date on which this Agreement shall be terminated by mutual
consent of the parties hereto. Notwithstanding the foregoing, Paragraphs 2,
3, and 4 shall survive the termination of this Agreement.
Kindly indicate your acceptance of the foregoing provisions by signing
in the space provided below for that purpose and returning to the Company a
copy of this Agreement so signed, whereupon this Agreement and the Exchange
Agent's acceptance shall constitute a binding agreement among the Exchange
Agent, the Company and the Trust.
Very truly yours,
THE FIRST AMERICAN FINANCIAL CORPORATION
By:_________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
FIRST AMERICAN CAPITAL TRUST I
By:_________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Regular Trustee
By:_________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Regular Trustee
Accepted and agreed to as of
the date first written above:
WILMINGTON TRUST COMPANY
By:_________________________________
Authorized Signatory
SCHEDULE I
Compensation
