EXHIBIT 4.6
EXECUTION COPY
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GUARANTEE AGREEMENT
BETWEEN
INTEGON CORPORATION
(AS GUARANTOR)
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(AS GUARANTEE TRUSTEE)
DATED AS OF
FEBRUARY 10, 1997
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
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310(a).......................................... 4.1(a)
310(b).......................................... 4.1(c), 2.8
310(c).......................................... Inapplicable
311(a).......................................... 2.9
311(b).......................................... 2.9
311(c).......................................... Inapplicable
312(a).......................................... 2.2(b)
312(b).......................................... 2.2(b)
312(c).......................................... 2.2
313............................................. 2.3
314(a).......................................... 2.4
314(b).......................................... Inapplicable
314(c).......................................... 2.5
314(d).......................................... Inapplicable
314(e).......................................... 1.1, 2.5, 3.2
314(f).......................................... 2.1, 3.2
315(a).......................................... 3.1(d)
315(b).......................................... 2.7
315(c).......................................... 3.1
315(d).......................................... 3.1(d)
315(e).......................................... 3.3
316(a).......................................... 1.1, 2.6, 5.4
316(b).......................................... 5.3, 5.4
316(c).......................................... 8.2
317(a).......................................... Inapplicable
317(b).......................................... Inapplicable
318(a).......................................... 2.1(b)
318(b).......................................... 2.1
318(c).......................................... 2.1(a)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS.........;;;;;;;;;;;;......................................... 1
Section 1.1. Definitions.................................................. 1
ARTICLE II. TRUST INDENTURE ACT...................................................... 4
Section 2.1. Trust Indenture Act; Application............................. 4
Section 2.2. List of Holders.............................................. 4
Section 2.3. Reports by the Guarantee Trustee............................. 5
Section 2.4. Periodic Reports to the Guarantee Trustee.................... 5
Section 2.5. Evidence of Compliance with Conditions Precedent............. 5
Section 2.6. Events of Default; Waiver.................................... 5
Section 2.7. Event of Default; Notice..................................... 6
Section 2.8. Conflicting Interests........................................ 6
Section 2.9. Preferential Collection of Claims against Guarantor.......... 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE...................... 6
Section 3.1. Powers and Duties of the Guarantee Trustee................... 6
Section 3.2. Certain Rights of Guarantee Trustee.......................... 8
Section 3.3. Indemnity.................................................... 9
ARTICLE IV. GUARANTEE TRUSTEE........................................................ 10
Section 4.1. Guarantee Trustee: Eligibility............................... 10
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee 10
ARTICLE V. GUARANTEE................................................................. 11
Section 5.1. Guarantee.................................................... 11
Section 5.2. Waiver of Notice and Demand.................................. 11
Section 5.3. Obligations Not Affected..................................... 11
Section 5.4. Rights of Holders............................................ 12
Section 5.5. Guarantee of Payment......................................... 13
Section 5.6. Subrogation.................................................. 13
Section 5.7. Independent Obligations...................................... 13
ARTICLE VI. COVENANTS AND SUBORDINATION.............................................. 13
Section 6.1. Subordination................................................ 13
ARTICLE VII. TERMINATION............................................................. 14
Section 7.1. Termination.................................................. 14
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Page
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ARTICLE VIII. MISCELLANEOUS....................................................... 14
Section 8.1. Successors and Assigns....................................... 14
Section 8.2. Amendments................................................... 14
Section 8.3. Notices...................................................... 14
Section 8.4. Benefit...................................................... 15
Section 8.5. Interpretation............................................... 16
Section 8.6. Governing Law................................................ 16
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EXHIBIT 4.6
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of February 10, 1997, is executed and
delivered by INTEGON CORPORATION, a Delaware corporation (the "Guarantor")
having its principal office at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx-Xxxxx, Xxxxx
Xxxxxxxx 00000, and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national
banking association organized and existing under the laws of the United States
of America, as trustee (the "Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Capital Securities and Common
Securities (each as defined in the Trust Agreement, and together, the
"Securities") of Integon Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
February 10, 1997 (as amended and in effect from time to time, the "Trust
Agreement"), among the Guarantor, as Depositor, the Guarantee Trustee, as
Property Trustee, the Delaware Trustee named therein, the Administrative
Trustees named therein and the Holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing Capital Securities
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities, will be used to purchase the Debentures (as defined in the
Trust Agreement) of the Guarantor which will be deposited with First Union
National Bank of North Carolina, as Property Trustee under the Trust Agreement,
as trust assets; and
WHEREAS, as incentive for the Holders to purchase Securities the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth
herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
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"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; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Issuer. 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.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any of the Guarantee Payments,
the Guarantor shall have received a notice of such default and shall not have
cured such default within 90 days after receipt of such notice.
"Exchange Guarantee Agreement" means the guarantee agreement, as amended,
modified or supplemented from time to time, to be executed and delivered by the
Guarantor and the Guarantee Trustee as contemplated by the Exchange and
Registration Rights Agreement, dated as of February 10, 1997, among the
Guarantor, the Issuer and the Initial Purchasers named therein, as amended,
modified or supplemented form time to time.
"Guarantee Agreement" means the Initial Guarantee Agreement, and, when and
if issued, the Exchange Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
required to be paid on the Securities, to the extent the Issuer shall have funds
on hand available therefor at such time, (ii) the Redemption Price and the
Repurchase Price with respect to any Securities called for redemption by the
Issuer or the repurchase of which is caused by the Holders thereof under the
Trust Agreement, to the extent the Issuer shall have funds on hand available
therefor at such time, or (iii) upon a voluntary or involuntary termination,
winding up or liquidation of the Issuer (unless Debentures are distributed to
the Holders), the lesser of (a) the aggregate Liquidation Amount plus
accumulated and unpaid Distributions to the date of payment, to the extent the
Issuer shall have funds on hand available therefor at such time, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
on liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the "Liquidation
Payment").
"Guarantee Trustee" means First Union National Bank of North Carolina,
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Securities; provided, however, that in determining whether the
holders of the requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
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include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of February
10, 1997, between the Guarantor and First Union National Bank of North Carolina,
as trustee, as may be modified, amended or supplemented and in effect from time
to time.
"Initial Capital Security" means an undivided beneficial preferred interest
in the assets of the Issuer, having a Liquidation Amount of $1,000 and having
the rights provided therefor in the Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution, as provided therein.
"Initial Guarantee Agreement" means this Guarantee Agreement, dated as of
February 10, 1997 between the Guarantor and the Guarantee Trustee, on behalf of
and for the benefit of the Holders of the Initial Capital Securities, as may be
modified, amended or supplemented and in effect from time to time.
"Majority in aggregate Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders of Capital
Securities, voting separately as a class, of more than 50% of the aggregate
Liquidation Amount of all then outstanding Capital Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman or a Vice Chairman of the Board of Directors of such
Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the 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 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 officer, such
condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" when used with respect to the Guarantee Trustee means
any officer of the Guarantee Trustee assigned by the Guarantee Trustee from time
to time to administer its corporate trust matters.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended and
as in effect on the date of this Guarantee Agreement.
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the Guarantee
Trustee:
(i) semi-annually, not more than 15 days after January 15 and July 15 in
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders as of such January 1 and July 1, and
(ii) at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
excluding from any such list names and addresses received by the Guarantee
Trustee in its capacity as Securities Registrar.
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(b) The Guarantee Trustee shall comply with its obligations under Section
312(a) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
The Guarantee Trustee shall transmit to Holders such reports concerning the
Guarantee Trustee and its actions under this Guarantee 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 Guarantee Trustee shall, within sixty days after each May 15 following
the date of this Guarantee Agreement deliver to Holders a brief report, dated as
of such May 15, which complies with the provisions of such Section 313(a).
Section 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Guarantee Trustee is
for informational purposes only and the Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein,
including the Guarantor's compliance with any of its covenants hereunder (as to
which the Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in aggregate Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
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Section 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of the
Board of Directors and/or Responsible Officers of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
Section 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
Section 2.9. Preferential Collection of Claims against Guarantor.
If and when the Guarantee Trustee shall be or become a creditor of the
Guarantor or the Issuer (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Guarantor or the Issuer (or any other such
obligor).
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
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(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be determined
solely by the express provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable, except for the performance of such duties and
obligations as are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee Trustee, the
Guarantee Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to the requirements
of this Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee, unless it
shall be proved that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in aggregate Liquidation
Amount of the Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee
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Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if the Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
Section 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Guarantee
Agreement shall be sufficiently evidenced by an Officers' Certificate unless
otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting to take any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its selection,
and the written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by it hereunder in good faith
and in accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the direction
of any Holder, unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee,
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against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(v)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(vii) The Guarantee 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, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive written instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until
such written instructions are received, and (C) shall be protected in acting in
accordance with such written instructions.
(ix) The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this
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Guarantee 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.
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) 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, and
shall be a corporation or association meeting the requirements of Section 310(a)
of the Trust Indenture Act. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the supervising or
examining authority, then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor. If an instrument of acceptance by a Successor Guarantee Trustee
shall not have been delivered to the Guarantee Trustee within 30 days after such
removal, the Guarantee Trustee being removed may petition any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing
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executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full on a
subordinated basis to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may
have or assert other than the defense of payment. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
Section 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension or deferral of any interest
payment period on the Debentures as provided in the Indenture), Redemption
Price, Repurchase Price, Liquidation Payment or any other sums payable under the
terms of the Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in aggregate
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or directing the
exercise of any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person.
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Section 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection and will apply only to the extent that the Issuer has funds
sufficient to make such payments. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Trust Agreement.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
Section 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor, except those made pari passu or subordinate to such
obligations expressly by their terms, in the same manner as set forth in Article
XIII of the Indenture.
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ARTICLE VII. TERMINATION
Section 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price or the Repurchase Price for
all outstanding Securities, (ii) the distribution of Debentures to the Holders
in exchange for all of the Securities, (iii) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Capital Securities or this
Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article VIII of the Indenture and pursuant
to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders or the Guarantee Trustee in any material respect (in which case
no consent of the Holders or the Guarantee Trustee, as the case may be, will be
required), this Guarantee Agreement may only be amended by the Guarantor with
the prior approval of the Holders of not less than a Majority in aggregate
Liquidation Amount of the Capital Securities and of the Guarantee Trustee. The
provisions of Article VI of the Trust Agreement concerning meetings of the
Holders shall apply to the giving of such approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
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Integon Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx-Xxxxx
Xxxxx Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: General Counsel
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Integon Capital I
c/o Integon Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx-Xxxxx
Xxxxx Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: General Counsel
with a copy to:
First Union National Bank of North Carolina
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Bond Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
The Initial Guarantee Agreement is solely for the benefit of the Holders of
the Initial Capital Securities and is not separately transferable from the
Initial Capital Securities. The Exchange Guarantee Agreement when and if
executed by the Guarantor, shall be solely for the benefit of the
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Holders of the Exchange Capital Securities and shall not be separately
transferable from the Exchange Capital Securities.
Section 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
Section 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Integon Corporation
By: /s/ Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Corporate
General Counsel & Secretary
First Union National Bank of
North Carolina
as Guarantee Trustee
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Asst. Vice President
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STATE OF )
) : ss.:
COUNTY OF )
On the ___ day of February, 1997, before me personally came
________________________________________________________________________________
____________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ____________________________________________________ of
Integon Corporation, one of the corporations described in and which executed the
foregoing instrument; that he/she knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; and that he/she
signed his/her name thereto by like authority.
-----------------------------
Notary Public
STATE OF NORTH CAROLINA )
): ss.:
COUNTY OF )
On the ___ day of February, 1997, before me personally came
________________________________________________________________________________
___________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ______________________________________________________ of
First Union National Bank of North Carolina, one of the corporations described
in and which executed the foregoing instrument, and that he/she signed his/her
name thereto pursuant to the bylaws of said Corporation.
---------------------------
Notary Public
