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CALIFORNIA FEDERAL BANK,
A Federal Savings Bank
and
Chemical Trust Company of California,
Interest Agent
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AGREEMENT REGARDING CONTINGENT LITIGATION RECOVERY
PARTICIPATION INTERESTS
Dated as of June 30, 1995
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AGREEMENT REGARDING CONTINGENT LITIGATION RECOVERY
PARTICIPATION INTERESTS
This Agreement Regarding Contingent Litigation Recovery Participation
Interests (the "Agreement") dated as of June 30, 1995, is made between
California Federal Bank, A Federal Savings Bank (the "Bank"), and Chemical
Trust Company of California, a California trust corporation ("Interest
Agent"), with reference to the following facts:
A. The Bank has brought suit against the United States, California
Federal Bank v. The United States of America, Civil Action No. 92-138C, filed
on February 28, 1992, in the United States Court of Federal Claims (the
"Litigation"), alleging that the United States breached certain contracts
entered into with the Bank and deprived the Bank of certain of its property
without just compensation in violation of the United States Constitution.
B. The Board of Directors of the Bank has determined that it is in
the best interests of the Bank to distribute to the registered holders of its
common stock, $1.00 par value ("Common Stock"), as of July 14, 1995
("Shareholders"), and reserve for management employees and directors who are
holders as of that date of options or warrants to purchase Common Stock
("Management"), the right to receive up to 25.377745% of the Litigation
Recovery, if any (as defined below).
C. Such distribution shall be effected by the issuance and delivery
of (a) an aggregate of 4,919,904 certificates to Shareholders, each
certificate representing the right to receive in cash five millionths of one
percent (0.000005%) of the Litigation Recovery, if any (such payment, the
"Recovery Payment"), and (b) an aggregate of 155,645 such certificates to
Management, subject to the vesting requirements of the corresponding option or
warrant agreements (collectively, the certificates referred to in clauses (a)
and (b) are hereinafter referred to as the "Participation Interests" and the
holders of such Participation Interests as the "Interest Holders").
D. For purposes of this Agreement, the term "Litigation Recovery"
shall mean the cash payment, if any, actually received by the Bank in respect
of a final, nonappealable judgment in or final settlement of the Litigation
after deduction of (i) the aggregate expenses incurred previously and
hereafter by the Bank in prosecuting the Litigation and obtaining such cash
payment, (ii) any income tax liability of the Bank as a result of the Bank's
receipt of such cash payment (net of any income tax benefit to the Bank from
the Recovery Payment to the Interest Holders and disregarding for purposes of
this clause (ii) the effect of any net operating loss carryforwards or other
tax attributes held by the Bank or any of its subsidiaries or affiliated
entities) and (iii) the expenses incurred by the Bank in connection with the
creation, issuance and trading of the Participation Interests, including,
without limitation, legal and accounting fees and the fees and expenses of the
Interest Agent.
NOW, THEREFORE, in consideration of these premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
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Section 1. Appointment of Interest Agent. The Bank hereby appoints
the Interest Agent to act as agent for the Bank in accordance with the terms
and conditions hereinafter set forth, and the Interest Agent hereby accepts
such appointment. The Bank may from time to time appoint such co-certificate
agents as it may deem necessary or desirable.
Section 2. Form of Participation Interests. The Participation
Interests and the form of assignment to be printed on the reverse thereof
shall be substantially in the form of Exhibit A hereto and may have such
letters, numbers or other marks of identification or designation and such
legends (including, without limitation, a legend referring to restrictions on
resale by statutory underwriters, a legend referring to any restrictions on
ownership by certain individuals and a legend referring to any applicable
vesting requirements), summaries or endorsements printed, lithographed or
engraved thereon as the Bank may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule
or regulation of any stock exchange or securities trading system on which the
Participation Interests may from time to time be listed or traded. The Bank
shall furnish to the Interest Agent, in writing, any such legend or
endorsement. Each Participation Interest shall be dated as of the date on
which countersigned by the Interest Agent, either upon initial issuance or
upon transfer or exchange, and on its face shall entitle the holder thereof to
receive, in cash, five millionths of one percent (0.000005%) or a whole
multiple thereof of the Litigation Recovery, if any.
Section 3. Issuance, Countersignature and Registration. The
Participation Interests shall originally be issued and dated as of July 28,
1995, or at such other time or times and with such date or dates as the Bank
may decide in its sole discretion. The Interest Agent shall, upon the Bank's
written instructions, issue, countersign and deliver Participation Interests
to, or on written order of, the Bank. The Participation Interests shall have
been executed on behalf of the Bank by its Chairman of the Board, the
President or a Senior Vice President, by facsimile signature, and have affixed
thereto a facsimile of the Bank's seal which shall be attested to by the
Secretary or an Assistant Secretary of the Bank by facsimile signature. The
Participation Interests shall be manually countersigned by the Interest Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Bank who shall have signed any of the Participation Interests
shall cease to be such officer of the Bank before counter-signature by the
Interest Agent and issuance and delivery by the Bank, such Participation
Interests, nevertheless, may be countersigned by the Interest Agent, issued
and delivered with the same force and effect as though the person who signed
such Participation Interests had not ceased to be such officer of the Bank;
and any Participation Interest may be signed on behalf of the Bank by any
person who, at the actual date of the execution of such Participation
Interest, shall be a proper officer of the Bank to sign such Participation
Interest, although at the date of the execution of this Agreement any such
person was not such an officer.
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The Interest Agent will maintain books for registration and transfer
of the Participation Interests issued hereunder. Such books shall show the
names and addresses of the respective Interest Holders and the date of
issuance of each of the Participation Interests.
Notwithstanding any other provision of this Agreement, the Interest
Agent shall comply with all applicable requirements and rules of each
securities exchange or securities trading system on which the Bank shall
determine to list or trade the Participation Interests in connection with the
listing or trading of the Participation Interests on each such exchange or
securities trading system. The Bank shall advise the Interest Agent of each
securities exchange or securities trading system on which listing is effected.
Section 4. Transfer, Split Up, Combination and Exchange of
Participation Interests; Mutilated, Destroyed, Lost or Stolen Participation
Interests. Any Participation Interest may be transferred, split up, combined
or exchanged for another Participation Interest or Participation Interests,
entitling the registered holder to receive that percentage of the Litigation
Recovery as the Participation Interest or Participation Interests surrendered
then entitled him to receive; provided, however, that the Bank and Interest
Agent shall not be required to effect any such transfer, split up, combination
or exchange if any of the resulting Participation Interest(s) would represent
a right to receive any percentage of the Litigation Recovery other than five
millionths of one percent (0.000005%) or a whole multiple thereof. Any
registered holder desiring to transfer, split up, combine or exchange any
Participation Interest shall make such request in writing delivered to the
Interest Agent, and shall surrender the Participation Interest or
Participation Interests to be transferred, split up, combined or exchanged at
the principal office of the Interest Agent or at its facility retained for
such purpose at one of the following two addresses:
Chemical Trust Company of California
000 Xxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Chemical Bank
Securities Window, Room 234
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Thereupon, the Bank shall have such Participation Interest signed as provided
in Section and the Interest Agent shall countersign and deliver to the person
entitled thereto a Participation Interest or Participation Interests, as the
case may be, as so requested. The Bank may require payment by the Interest
Holder of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Participation Interests.
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Upon receipt by the Bank and the Interest Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a
Participation Interest, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them (including with respect
to the amount of such indemnity or security), and reimbursement by the
Interest Holder to the Bank and the Interest Agent of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Participation
Interest if mutilated, the Bank will make and deliver a new Participation
Interest of like tenor to the Interest Agent for countersignature and delivery
to the registered owner in lieu of the Participation Interest so lost, stolen,
destroyed or mutilated. Applicants for substitute Participation Interests
shall also comply with such other regulations and pay such other reasonable
charges as the Bank may prescribe.
Section 5. Subsequent Issuances of Participation Interests. Nothing
contained in this Agreement shall prohibit the Bank from issuing from time to
time additional Participation Interests containing terms similar to or
different from the Participation Interests issued hereunder. Furthermore, no
Interest Holder shall have any preemptive rights with respect to any other
issuance of Participation Interests or any other securities by the Bank.
Section 6. Payment of Litigation Recovery.
6.1. Promptly following receipt by the Bank of the full cash payment
in respect of a final, nonappealable judgment in or a final settlement of the
Litigation and the determination by the Bank of the amount of the Litigation
Recovery, if any, and the Recovery Payment, if any (which determination shall
be binding and conclusive on all persons), the Bank shall promptly, at its
election, either (i) cause notice of the amount of the Litigation Recovery and
the Recovery Payment, as well as the Payment Record Date (as defined below),
to be published in The Wall Street Journal or in another newspaper or
newspapers of general circulation in the New York and Los Angeles metropolitan
areas, or (ii) cause such notice to be mailed to each registered holder of
Participation Interests at the time of such mailing (either such notice, the
"Payment Notice"). The Bank shall also promptly give written notice of the
Litigation Recovery and the Recovery Payment to the Interest Agent. The
Payment Notice shall also state the date by which registered Interest Holders
must surrender Participation Interests in order to receive payment thereon,
which date (the "Final Payment Date") shall be six months following the date
of the Payment Record Date. Subject to Section 8, payments in respect of the
Litigation Recovery shall be made to the registered holders of Participation
Interests as of the Payment Record Date, which shall be a date not less than
fifteen days and no later than thirty days following the date of the Payment
Notice.
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6.2. Following the Payment Record Date, the registered holder (as
described in Section 3) of a Participation Interest may receive payment thereon
only by surrendering such Participation Interest to the Interest Agent at its
facility maintained for such purpose at Chemical Bank, Securities Window, Room
234, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at the principal office of
the Interest Agent, if then different, at or prior to 5:00 p.m. (New York
time) on the Final Payment Date. No Interest Holder shall be entitled to
receive any payment with respect thereto until the Participation Interest
shall have been surrendered as provided in this Section 6. Any and all
Participation Interests not delivered in accordance with this Section shall be
null and void, and following the Final Payment Date, the Bank and Interest
Agent shall have no obligation to make any payment thereon.
6.3. Upon receipt of Participation Interests, and from time to time
following the Payment Record Date and prior to the Final Payment Date, the
Interest Agent shall requisition from the Bank the amount of cash to be paid
to or upon the order of the registered holders of such Participation
Interests, and subject to Section 8, such payment shall be made as soon as
practicable thereafter.
6.4. No Interest Holder shall be entitled to any interest for the
period of time between the date on which the Bank receives any cash payment in
connection with the Litigation and the date on which payment is made to such
holder in respect of such Participation Interest in accordance with the terms
of this Agreement.
Section 7. Cancellation and Destruction of Participation Interest.
All Participation Interests surrendered for the purpose of payment, exchange,
substitution or transfer shall, if surrendered to the Bank or to any of its
agents, be delivered to the Interest Agent for cancellation or in cancelled
form, or if surrendered to the Interest Agent shall be cancelled by it, and no
Participation Interests shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. If the Bank purchases or
acquires Participation Interests and if the Bank so chooses, the Bank may
deliver to the Interest Agent for cancellation and retirement, and the
Interest Agent shall so cancel and retire, the Participation Interests
evidencing said Participation Interests. The Interest Agent shall destroy such
cancelled Participation Interests, and in such case shall upon the written
request of the Bank deliver a certificate of destruction thereof to the Bank.
Section 8. No Rights in the Litigation or to Other Funds. The
Interest Agent hereby acknowledges and agrees, and each Interest Holder by
acceptance of a Participation Interest shall also acknowledge and agree, that
(i) the Bank retains sole and exclusive control of the Litigation and may,
among other things, dismiss, settle or cease prosecuting the Litigation at any
time without obtaining any cash or other recovery, and (ii) the Interest Agent
and each Interest Holder shall have no rights against the Bank for any
decision regarding the conduct or disposition of the Litigation, including,
without limitation, any decision to dispose of the Litigation without a cash
recovery by the Bank. In addition, in the event that applicable laws, rules or
regulations limit or prevent the distribution of all or any portion of the
Litigation Recovery, the Bank shall have no
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obligation whatsoever to make any payment in excess of the allowable amount,
if any. Consequently, should all or a portion of the Recovery Payment be in
excess of the allowable amount at the time such payment is to be made, the
Bank will not make all or a portion of the payment, as the case may be, in
excess of the allowable amount at such time or at any future time.
In the event of a corporate reorganization to create a holding
company, the Participation Interests will remain as outstanding securities of
the Bank. Similarly, in the event of an acquisition of the Bank or a merger in
which the Bank is the surviving separate entity, the rights of Interest
Holders shall be unchanged. In the event of a merger in which the Bank is not
the surviving entity, the rights of Interest Holders will be determined by the
terms of the merger in accordance with applicable laws. To the extent that the
surviving entity is the successor to the Bank's claims against the Government,
the rights of Interest Holders shall be unchanged.
Section 9. Covenants of the Bank. The Bank covenants and agrees as
follows:
9.1. The Bank shall use its reasonable best efforts to cause the
Participation Interests to be listed or included for trading on the National
Association of Securities Dealers Automated Quotation System or another
trading system.
9.2. The Bank will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the
initial issuance or delivery of the Participation Interests. The Bank shall
not, however, be required to pay any tax or taxes which may be payable in
respect of any subsequent transfer or delivery of Participation Interests.
Section 10. Right of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Participation
Interests; provided, however, that no registered holder of any Participation
Interest shall have the right to enforce, institute or maintain any suit,
action or proceeding against the Bank to enforce, or otherwise act in respect
of, the Participation Interests, unless (a) such registered holder shall have
previously given written notice to the Bank of the substance of such dispute,
and registered holders of at least one-quarter in interest of the issued and
outstanding Participation Interests shall have given written notice to the
Bank of their support for the institution of such proceeding to resolve such
dispute, (b) written notice of the substance of such dispute and of the
support for the institution of such proceeding by such holders shall have been
provided by the Bank to the Interest Agent, and (c) the Interest Agent shall
not have instituted appropriate proceedings with respect to such dispute
within 30 days following the date of such written notice to the Interest
Agent, it being understood and intended that no one or more registered holders
of Participation Interests shall have the right in any manner whatever by
virtue of, or by availing of, any provision of this Agreement to affect,
disturb or prejudice the rights of any other registered holders of
Participation Interests, or to obtain or to seek to obtain priority in
preference over any other holders or to enforce any right under this
Agreement, except in the manner herein provided for the equal and ratable
benefit of all registered holders
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of Participation Interests. Except as provided in this Section, no holder of a
Participation Interest shall have the right to enforce, institute or maintain
any suit, action or proceeding to enforce, or otherwise act in respect of, the
Participation Interests.
Section 11. Agreement of Interest Holders. Every Interest Holder by
accepting a Participation Interest consents and agrees with the Bank and the
Interest Agent and with every other Interest Holder that:
11.1. The Participation Interests are transferable only on the
registry books of the Interest Agent if surrendered at the principal office of
the Interest Agent or at its facility retained for such purpose at Chemical
Bank, Securities Window, Room 234, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
duly endorsed or accompanied by an instrument of transfer in form and
substance satisfactory to the Bank and the Interest Agent;
11.2. The Bank and the Interest Agent may deem and treat the person
in whose name each Participation Interest is registered as the absolute owner
thereof (notwithstanding any notations of ownership or writing on the
Participation Interests made by anyone other than the Bank or the
Participation Agent) for all purposes whatsoever, and neither the Bank nor the
Interest Agent shall be affected by any notice to the contrary, including,
without limitation, any notice or determination that such holder may be
prohibited by statute or other law from owning the Participation Interests;
11.3. Except as provided in Section , no holder of a Participation
Interest shall have the right to enforce, institute or maintain any suit,
action or proceeding to enforce, or otherwise act in respect of, the
Participation Interests; and
11.4. The Interest Agent is solely the agent of the Bank hereunder.
Section 12. Concerning the Interest Agent. The Bank agrees to pay to
the Interest Agent from time to time compensation for all services rendered by
it hereunder as the Bank and Interest Agent may agree from time to time, and,
from time to time, on demand of the Interest Agent, its reasonable expenses
and counsel fees and other disbursements reasonably incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Bank also agrees to indemnify the
Interest Agent for, and to hold it harmless against, any loss, claim,
liability, or expense, incurred without gross negligence on the part of the
Interest Agent, arising out of or in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim or liability arising out of or resulting from the
acceptance and administration of this Agreement or in connection with the
exercise or performance of any of its powers or duties hereunder. In no event
shall the Interest Agent be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Interest Agent has been advised of the likelihood of such loss or
damage and regardless of form of action.
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The Interest Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon any
Participation Interest, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document in good faith believed by
it to be genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper person or persons.
Section 13. Merger or Consolidation or Change of Name of Interest
Agent. Any corporation into which the Interest Agent or any successor Interest
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Interest Agent or any
successor Interest Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Interest Agent or any successor Interest
Agent, shall be the successor to the Interest Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible
for appointment as successor Interest Agent under the provisions of Section 15
hereof. In case at the time such successor Interest Agent shall succeed to the
agency created by this Agreement, any of the Participation Interests shall
have been countersigned but not delivered, any such successor Interest Agent
may adopt the countersignature of the predecessor Interest Agent and deliver
such Participation Interests countersigned; and in case at that time any of
the Participation Interests shall not have been countersigned, any successor
Interest Agent may countersign such Participation Interests either in the name
of the predecessor Interest Agent or in the name of the successor Interest
Agent; and in all such cases such Participation Interests shall have the full
force provided in the Participation Interests and in this Agreement.
In case at any time the name of the Interest Agent shall be changed
and at such time any of the Participation Interests shall have been
countersigned but not delivered, the Interest Agent may adopt the
countersignature under its prior name and deliver Participation Interests so
countersigned; and in case at that time any of the Participation Interests
shall not have been countersigned, the Interest Agent may countersign such
Participation Interests either in its prior name or in its changed name; and
in all such cases such Participation Interests shall have the full force
provided in the Participation Interests and in this Agreement.
Section 14. Duties of Interest Agent. The Interest Agent undertakes
only the specific duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Bank and the holders of
Participation Interests, by their acceptance thereof, shall be bound:
14.1. The Interest Agent may consult with legal counsel (who may be
legal counsel for the Bank), and the opinion of such counsel shall be full and
complete authorization and protection to the Interest Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion,
provided the Interest Agent shall have exercised reasonable care in the
selection by it of such counsel.
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14.2. Whenever in the performance of its duties under this Agreement,
the Interest Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Bank prior to taking or suffering any
action hereunder, such fact or matter may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the Board, the
President or a Senior Vice President of the Bank and delivered to the Interest
Agent; and such certificate shall be full authorization to the Interest Agent
for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
14.3. The Interest Agent shall be liable hereunder only for its own
gross negligence or willful misconduct.
14.4. The Interest Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Participation Interests (except such as describe the Interest Agent and its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Bank
only.
14.5. The Interest Agent shall not be under any responsibility in
respect of and makes no representation as to the validity of this Agreement or
the execution and delivery hereof (except the due execution hereof by the
Interest Agent) or in respect of the validity or execution of any
Participation Interest (except its countersignature thereof); nor shall it be
responsible for any breach by the Bank of any covenant or condition contained
in this Agreement or in any Participation Interest.
14.6. The Interest Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, a Senior Vice President, the Secretary,
an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Bank,
and to apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer.
14.7. The Interest Agent and any shareholder, director, officer or
employee of the Interest Agent may buy, sell or deal in any of the
Participation Interests or other securities of the Bank or become pecuniarily
interested in any transaction in which the Bank may be interested, or contract
with or lend money to the Bank or otherwise act as fully and freely as though
it were not Interest Agent under this Agreement, so long as such persons do so
in full compliance with all applicable laws. Nothing herein shall preclude the
Interest Agent from acting in any other capacity for the Bank or for any other
legal entity.
14.8. The Interest Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents.
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14.9. The Interest Agent shall act solely as the agent of the Bank
hereunder. The Interest Agent shall not be liable except for the failure to
perform such duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into this Agreement against the
Interest Agent, whose duties shall be determined solely by the express
provisions hereof.
14.10. The Interest Agent shall not be responsible for any failure on
the part of the Bank to comply with any of its covenants and obligations
contained in this Agreement or in the Participation Interests.
14.11. The Interest Agent shall not be under any obligation or duty
to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless first indemnified to its satisfaction, but this
provision shall not affect the power of the Interest Agent to take such action
as the Interest Agent may consider proper, whether with or without such
indemnity. The Interest Agent shall promptly notify the Bank in writing of any
claim made or action, suit or proceeding instituted against it arising out of
or in connection with this Agreement.
14.12. The Bank will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may be required by the Interest Agent in
order to enable it to carry out or perform its duties under this Agreement.
Section 15. Change of Interest Agent. The Interest Agent may resign
and be discharged from its duties under this Agreement upon 30 days' notice in
writing mailed to the Bank by registered or certified mail, and to the holders
of the Participation Interests by first-class mail at the expense of the Bank.
The Bank may remove the Interest Agent or any successor Interest Agent upon 30
days' notice in writing, mailed to the Interest Agent or successor Interest
Agent, as the case may be, and to the holders of the Participation Interests
by first-class mail. If the Interest Agent shall resign or be removed or shall
otherwise become incapable of acting, the Bank shall promptly appoint a
successor to the Interest Agent, which the Bank may designate as an interim
Interest Agent. If the Bank appoints an interim Interest Agent, the Bank shall
then appoint a permanent successor to the Interest Agent, which may be the
interim Interest Agent. If the Bank shall fail to make such appointment of a
permanent successor within a period of 30 days after such removal or within 60
days after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Interest Agent or by the holder of a
Participation Interest (who shall, with such notice, submit his Participation
Interest for inspection by the Bank), then the Interest Agent or registered
holder of any Participation Interest may apply to any court of competent
jurisdiction for the appointment of a new Interest Agent. Any successor
Interest Agent, whether appointed by the Bank or by such a court, shall be a
corporation organized and doing business under the laws of the United States
or of any State of the United States, in good standing, which is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Interest Agent a combined capital and surplus of at
least
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$10,000,000. After appointment, the successor Interest Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Interest Agent without further act or deed; but the
predecessor Interest Agent shall deliver and transfer to the successor
Interest Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed deemed necessary by the
Bank. No later than the effective date of any such appointment, the Bank shall
file notice thereof in writing with the predecessor Interest Agent, and mail a
notice thereof in writing to the registered holders of the Participation
Interests. Failure to give any notice provided for in this Section 15, however,
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Interest Agent or the appointment of the
successor Interest Agent, as the case may be.
Section 16. Notices. Notices or demands authorized by this Agreement
to be given or made by the Interest Agent or by the holder of any
Participation Interest to or on the Bank shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Interest Agent) as follows:
California Federal Bank
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Executive Vice President and General Counsel
Subject to the provisions of Section 17, any notice or demand authorized by
this Agreement to be given or made by the Bank or by the holder of any
Participation Interest to or on the Interest Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Bank) as follows:
Chemical Trust Company of California
000 Xxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Administration
Notices or demands authorized by this Agreement to be given or made by the
Bank or the Interest Agent to the holder of any Participation Interest shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Bank maintained by the Interest Agent pursuant to
Section 3 hereof.
Section 17. Supplements and Amendments. The Bank and the Interest
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Participation Interests in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any provisions herein, or (iii) make any
other provisions in regard to matters or questions arising hereunder or
otherwise which the Bank and the Interest Agent may
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deem necessary or desirable, provided that without the consent of at least
three-quarters in interest of the then outstanding Participation Interests, no
such provision described in this clause (iii) shall, on the whole, adversely
affect in any material respect the interests of the registered holders of
Participation Interests.
The provisions of this Agreement may otherwise from time to time be
supplemented or amended by written agreement of the parties hereto and the
record holders of the outstanding Participation Interests, subject to the
limitations provided in the balance of this paragraph and elsewhere in this
Agreement. The record holders of at least three-quarters in interest of the
then outstanding Participation Interests, may, on behalf of all of the record
holders of then outstanding Participation Interests, act to amend or
supplement this Agreement in any respect, which Agreement as so amended or
supplemented shall be binding on and shall inure to the benefit of all record
holders of the then outstanding Participation Interests; provided that the
record holders shall not be entitled to make any change in the aggregate
interest in the Litigation which registered holders of the outstanding
Participation Interests shall receive.
The Bank shall mail notice to each holder of a Participation
Interest, in accordance with Section hereof, of any amendment affecting the
rights of the holders of Participation Interests effected pursuant to this
Section 17, within 60 days of any such amendment.
Section 18. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Bank or the Interest Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 19. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Bank,
the Interest Agent and the registered holders of the Participation Interests
any legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Bank, the
Interest Agent and the registered holders of the Participation Interests.
Section 20. Governing Law. The laws of the State of California shall
govern this Agreement and each Participation Interest without regard to
principles of conflicts of law.
Section 21. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 22. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CALIFORNIA FEDERAL BANK,
A Federal Savings Bank
By: /s/ Xxxxxxx X. Xxxxxx
Its: Executive Vice President
Attest:
By: /s/ Xxxxx X. Xxxxxxxxx
Its: Senior Vice President
CHEMICAL TRUST COMPANY
OF CALIFORNIA,
as Interest Agent
By: /s/ Xxxxxx Xxxxxxxx
Its: Vice President
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EXHIBIT A
THE CONTINGENT LITIGATION RECOVERY PARTICIPATION INTERESTS ARE NOT SAVINGS
ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THE PARTICIPATION
INTERESTS ARE BEING DISTRIBUTED PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
STATUTES, AND HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR APPLICABLE STATE SECURITIES AGENCIES. THE RECOVERY PAYMENT MAY
BE SUBJECT TO APPLICABLE CAPITAL DISTRIBUTION REGULATIONS.
[Form of Contingent Litigation Recovery Participation Interest]
No. PC- ____ Participation Interests
Contingent Litigation Recovery Participation Interest
THIS CERTIFIES THAT ___________________, or registered assigns, is
the registered owner of the right to receive from California Federal Bank, A
Federal Savings Bank (the "Bank") five millionths of one percent (0.000005%)
of the Litigation Recovery, if any (as hereinafter defined) for each
Contingent Litigation Recovery Participation Interest set forth above. As used
throughout this Contingent Litigation Recovery Participation Interest (the
"Participation Interest"), "Litigation Recovery" means the cash payment, if
any, actually received by the Bank in respect of a final, nonappealable
judgment in or final settlement of California Federal Bank v. The United
States of America, Civil Action No. 92-138C, filed on February 28, 1992, in
the United States Court of Federal Claims (the "Litigation"), after deduction
of (i) the aggregate expenses incurred previously and hereafter by the Bank in
prosecuting the Litigation and obtaining such cash payment, (ii) any income
tax liability of the Bank, computed on a pro forma basis, as a result of the
Bank's receipt of such cash payment (net of any income tax benefit to the Bank
from the payment of a portion of the Litigation Recovery to the holders of
Participation Interests (the "Recovery Payment") and disregarding for purposes
of this clause (ii) the effect of any net operating loss carryforwards or
other tax attributes held by the Bank or any of its subsidiaries or affiliated
entities) and (iii) the expenses incurred by the Bank in connection with the
creation, issuance and trading of the Participation Interests, including,
without limitation, legal and accounting fees and the fees and expenses of the
Interest Agent (as hereinafter defined). Payment hereunder shall occur upon
presentation and surrender of this Participation Interest in the manner
specified in the Participation Agreement at or prior to 5:00 P.M. (New York
time) on the Final Payment Date (hereinafter defined) at the principal office
of Chemical Trust Company of California, a California trust corporation (the
"Interest Agent"), or at the
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Interest Agent's facility designated for such purpose at Chemical Bank,
Securities Window, Room 234, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
Chemical Trust Company of California, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, or its successor as Interest Agent.
Payment, if any, on this Participation Interest shall be made to the
registered holder hereof as of a date (the "Payment Record Date") that is not
less than fifteen days and not later than thirty days following the date of
the Payment Notice (as hereinafter defined). The "Payment Notice" shall be
notice of the amount of the Litigation Recovery and the Recovery Payment, as
well as the Payment Record Date, which notice shall be published or mailed to
registered holders of Participation Interests by the Bank. The "Final Payment
Date" will be the date that is six months following the date of the Payment
Record Date.
This Participation Interest is subject to all of the terms,
provisions and conditions of that certain Agreement Regarding Participation
Interests, dated as of June 30, 1995 (the "Participation Agreement"), by and
between the Bank and the Interest Agent, which Participation Agreement is
hereby incorporated herein by reference and made a part hereof and to which
Participation Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Interest Agent, the Bank and the holders of the Participation Interests.
Copies of the Participation Agreement are on file at the above-mentioned
principal office of the Interest Agent.
This Participation Interest, upon surrender at the principal office
of the Interest Agent or at its facility designated for such purpose at
Chemical Bank, Securities Window, Room 234, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or Chemical Trust Company of California, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, may be transferred, split up,
combined or exchanged for another Participation Interest or Participation
Interests of like tenor entitling the holder to receive a like aggregate
percentage of the Litigation Recovery as the Participation Interest or
Participation Interests surrendered shall have entitled such holder to
receive; provided, however, that the Bank and Interest Agent shall not be
required to effect any such transfer, split up, combination or exchange if any
of the resulting Participation Interest(s) would represent a right to receive
any percentage of the Litigation Recovery other than five millionths of one
percent (0.000005%) or a whole multiple thereof.
Following the Payment Record Date, the registered holder hereof may
receive payment in respect of this Participation Interest only by surrendering
this Participation Interest to the Interest Agent at its facility maintained
for such purpose at Chemical Bank, Securities Window, Room 234, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at the principal office of the Interest
Agent, if then different, at or prior to 5:00 p.m. (New York time) on the
Final Payment Date. No holder of a Participation Interest shall be entitled to
receive any payment with respect thereto until the Participation Interest
shall have been surrendered as provided in the preceding sentence and the
Participation Agreement. A holder of a Participation Interest shall not be
entitled to any interest for
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the period of time between the date on which the Bank receives any cash
payment in connection with the Litigation and the date on which payment is
made to such holder in respect of such Participation Interest in accordance
with the terms of the Participation Agreement. Any and all Participation
Interests not delivered in accordance with the Participation Agreement shall
be null and void, and following the Final Payment Date, the Bank and Interest
Agent shall have no obligation to make any payment thereon.
Each holder of a Participation Interest by acceptance of the same
acknowledges and agrees that (i) the Bank retains sole and exclusive control
of the Litigation and may, among other things, dismiss, settle or cease
prosecuting the Litigation at any time without obtaining any cash or other
recovery, and (ii) no holder of a Participation Interest shall have any rights
against the Bank for any decision regarding the conduct or disposition of the
Litigation, including, without limitation, any decision to dispose of the
Litigation without a cash recovery by the Bank. In addition, in the event that
applicable laws, rules or regulations limit or prevent the distribution of all
or any portion of the Litigation Recovery, the Bank shall have no obligation
whatsoever to make any payment in excess of the allowable amount, if any.
All rights of action in respect of the Participation Agreement are
vested in the respective registered holders of the Participation Interests;
provided, however, that no registered holder of any Participation Interest
shall have the right to enforce, institute or maintain any suit, action or
proceeding against the Bank to enforce, or otherwise act in respect of, the
Participation Interests, unless (a) such registered holder shall have
previously given written notice to the Bank of the substance of such dispute,
and registered holders of at least one-quarter in interest of the issued and
outstanding Participation Interests shall have given written notice to the
Bank of their support for the institution of such proceeding to resolve such
dispute, (b) written notice of the substance of such dispute and of the
support for the institution of such proceeding by such holders shall have been
provided by the Bank to the Interest Agent, and (c) the Interest Agent shall
not have instituted appropriate proceedings with respect to such dispute
within 30 days following the date of such written notice to the Interest
Agent, it being understood and intended that no one or more registered holders
of Participation Interests shall have the right in any manner whatever by
virtue of, or by availing of, any provision of the Participation Agreement to
affect, disturb or prejudice the rights of any other registered holders of
Participation Interests, or to obtain or to seek to obtain priority in
preference over any other holders or to enforce any right under the
Participation Agreement, except in the manner herein provided for the equal
and ratable benefit of all registered holders of Participation Interests.
Except as provided in this paragraph, no holder of a Participation Interest
shall have the right to enforce, institute or maintain any suit, action or
proceeding to enforce, or otherwise act in respect of, the Participation
Interests.
This Participation Interest shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Interest Agent.
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WITNESS the facsimile signature of the proper officers of the Bank
and its corporate seal.
Dated:
CALIFORNIA FEDERAL BANK,
A Federal Savings Bank
By:
---------------------------
Its:
--------------------------
ATTEST
Countersigned
------------------------
Interest Agent
By:
--------------------------
Authorized Signature
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[Form of Reverse Side of Contingent Litigation Recovery Participation Interest]
ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Participation Interest.)
FOR VALUE RECEIVED ______________________________________ hereby
sells, assigns and transfers unto _____________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Participation Interest, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________________________ attorney, to transfer the within
Participation Interest on the books of the within-named Bank, with full power
of substitution.
Dated:
------------------
Signature
--------------------------
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Participation Interest in every particular,
without alteration or enlargement or any change whatsoever.
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