Exhibit 4.21
[Form of Guarantee Agreement]
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GUARANTEE AGREEMENT
OF
Fund American Trust III
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Dated as of [ ]
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TABLE OF CONTENTS
PAGE
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ARTICLE I
Definitions ............................................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application ...................... 5
SECTION 2.02. Lists of Holders of Preferred
Securities .......................................... 6
SECTION 2.03. Reports by the Guarantee Trustee ...................... 6
SECTION 2.04. Periodic Reports to Guarantee
Trustee ............................................. 6
SECTION 2.05. Evidence of Compliance with
Conditions Precedent ................................ 6
SECTION 2.06. Events of Default; Waiver ............................. 6
SECTION 2.07. Disclosure of Information ............................. 7
SECTION 2.08. Conflicting Interest ................................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee
Trustee ............................................. 7
SECTION 3.02. Certain Rights and Duties of the
Guarantee Trustee ................................... 8
SECTION 3.03. Not Responsible for Recitals or
Issuance of Guarantee ................................ 11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. Qualifications ........................................ 11
SECTION 4.02. Appointment, Removal and Resignation
of Guarantee Trustee ................................ 12
2
Page
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ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee ............................................. 13
SECTION 5.02. Waiver of Notice ...................................... 13
SECTION 5.03. Obligations Not Affected .............................. 14
SECTION 5.04. Enforcement of Guarantee .............................. 15
SECTION 5.05. Guarantee of Payment .................................. 15
SECTION 5.06. Subrogation ........................................... 15
SECTION 5.07. Independent Obligations ............................... 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitation of Transactions ............................ 16
SECTION 6.02. Subordination ......................................... 17
ARTICLE VII
Termination ............................................................... 17
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. Exculpation ........................................... 18
SECTION 8.02. Indemnification ....................................... 18
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Successors and Assigns ................................ 19
SECTION 9.02. Amendments ............................................ 19
SECTION 9.03. Notices ............................................... 19
SECTION 9.04. Genders ............................................... 20
SECTION 9.05. Benefit ............................................... 20
SECTION 9.06. Governing Law ......................................... 20
SECTION 9.07. Counterparts .......................................... 20
SECTION 9.08. Exercise of Overallotment Option ...................... 20
[Form of]
GUARANTEE AGREEMENT dated as of [ ], between
[White Mountains Insurance Group, Ltd./Fund American
Companies, Inc.], a company existing under the laws of
[ ] (the "Guarantor"), and Bank One,
National Association, as the initial Guarantee Trustee
(as defined herein) for the benefit of the Holders
(as defined herein) from time to time of the Preferred
Securities (as defined herein) of Fund American
Trust III, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration") dated as of [ ], among the trustees named therein, Fund
American Companies, Inc , a Delaware corporation ("Fund American"), as Sponsor,
and the Holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer may issue up to $[ ] aggregate
liquidation amount of its [ ]% Trust Preferred Securities (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in Exhibit B to the Declaration, of
which $[ ] aggregate liquidation amount of Preferred Securities are being
issued as of the date hereof by the Issuer pursuant to the Underwriting
Agreement (as defined in the Declaration); and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders 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 the initial purchasers
thereof of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.
2
ARTICLE I
DEFINITIONS
(a) Capitalized terms used in this Guarantee Agreement but not defined in
the preamble above have the
respective meanings assigned to them in this Article I
(b) A term defined anywhere in this Guarantee Agreement has the same
meaning throughout.
(c) All references to "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.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Covered Person" means any Holder.
"Debentures" means the series of Junior Subordinated Debentures issued by
Fund American under the Indenture to the Property Trustee entitled the "[ ]%
Junior Subordinated Debentures due [ ]" which have been guaranteed by the
Guarantor.
"Distributions" has the meaning set forth in Exhibit B to the Declaration.
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"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 such a default resulting from a failure to pay any
Guarantee Payment, such default shall have continued for more than 30 days.
"Guarantee Payments" shall mean the following Distributions and other
payments, without duplication, with respect to the Preferred Securities, to the
extent not made or paid by the Issuer: (i) any accrued and unpaid Distributions
that are required to be paid on the Preferred Securities, but only if and to the
extent that in each case Fund American or the Guarantor has made a payment to
the Property Trustee of interest on the Debentures, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Preferred Securities called for
redemption by the Issuer, but only if and to the extent that in each case Fund
American or the Guarantor has made a payment to the Property Trustee of interest
or principal on the Debentures, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to Holders or the redemption of all the
Preferred Securities upon the maturity or redemption of the Debentures as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred Securities to
the date of payment, to the extent the Issuer has funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution to
Holders upon liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Bank One, National Association, until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any entity directly or indirectly
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controlling or controlled by or under direct or indirect common control with the
Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Junior Subordinated Debenture Indenture dated as of
[ ], between the Guarantor, Fund American and Bank One, National
Association, as trustee, as amended and supplemented from time to time, pursuant
to which the Debentures are to be issued.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Liquidation Distribution" has the meaning set forth in the definition of
Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class who are the record owners
of Preferred Securities whose aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the aggregate liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under the
Declaration.
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"Redemption Price" has the meaning set forth in the definition of
Guarantee Payments.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer of the Guarantee Trustee with responsibility for the administration of
this Guarantee Agreement and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of, and familiarity with, the particular subject.
"66-2/3% in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class who are the record owners
of Preferred Securities whose aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents 66-2/3% or more of the aggregate liquidation amount of
all outstanding Preferred Securities.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4 01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. 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.
(c) The application of the Trust Indenture Act to this Guarantee Agreement
shall not affect the nature
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of the Preferred Securities as equity securities representing preferred
undivided beneficial interests in the assets of the Issuer.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES. (a) The Guarantor
shall provide the Guarantee Trustee with such information as is required under
Section 312(a) of the Trust Indenture Act at the times and in the manner
provided in Section 312(a).
(b) The Guarantee Trustee shall comply with its obligations under Sections
310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after May
15 of each year, the Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form,
in the manner and at the times provided by Section 313 of the Trust Indenture
Act. The Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee, the Commission and the Holders, as
applicable, such documents, reports and information as required by Section
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the times
required by Section 314(a)(4) and (c) of the Trust Indenture Act (PROVIDED that
any certificate to be provided pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each fiscal year
of the Issuer).
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide the Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Guarantee Agreement which
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 pursuant to Section 314(c)
of the Trust Indenture Act shall comply with Section 314(e) of the Trust
Indenture Act.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. (a) Subject to Section 2.06(b),
Holders may, by vote of at least a Majority in liquidation amount of the
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Preferred Securities, (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
(b) The right of any Holder to receive payment of the Guarantee Payments
in accordance with this Guarantee Agreement, or to institute suit for the
enforcement of any such payment, shall not be impaired without the consent of
each such Holder.
SECTION 2.07. DISCLOSURE OF INFORMATION. The disclosure of information as
to the names and addresses of the Holders in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law or any law
hereafter enacted which does not specifically refer to Section 312 of the Trust
Indenture Act, nor shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
SECTION 2.08. CONFLICTING INTEREST. The Declaration 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.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder
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exercising his or her rights pursuant to Section 5.04. The right, title and
interest of the Guarantee Trustee to this Guarantee Agreement shall vest
automatically in each Person who may hereafter be appointed as Guarantee Trustee
in accordance with Article IV. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered.
(b) If an Event of Default occurs and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of or
for the benefit of the Guarantee Trustee or its agents or their creditors.
(d) 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,
as their names and addresses appear upon the register, notice of all Events of
Default known to the Guarantee Trustee, unless such Events of Default shall have
been cured before the giving of such notice; PROVIDED that, 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 directors
and/or Responsible Officers of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders. The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
except any Event of Default as to which 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.
(e) The Guarantee Trustee shall not resign as a Trustee unless a Successor
Guarantee Trustee has been appointed and accepted that appointment in accordance
with Article IV.
SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing or waiving 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,
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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 2.06(a)), 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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this 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 wilful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing or
waiving of all 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 no implied covenants or obligations shall be read
into this Guarantee Agreement against the Guarantee Trustee; 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 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;
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(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 as provided herein relating to the time,
method and place of conducting any proceeding for any remedy available to
the Guarantee 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 it shall have reasonable
ground 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.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by reason of
Rule 3a-7 under the Investment Company Act ("Rule 3a-7"), subject to the
requirements of Rule 3a-7, request and rely upon a certificate, which
shall comply with the provisions of Section 314(e) of the Trust Indenture
Act, signed by any authorized officer of the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which may
be counsel to the Guarantor or any of its Affiliates and may include any
of its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the
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administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) 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 request or direction of any Holders, unless such Holders shall have
offered to the Guarantee Trustee reasonable security and indemnity against
the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; PROVIDED that nothing contained in this clause (iv) shall
relieve the Guarantee Trustee of the obligation, upon the occurrence of an
Event of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Guarantee Agreement, and to use
the same degree of care and skill in such exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act, or as to its compliance with
any of the terms and provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The
recitals contained in this Guarantee Agreement shall be taken as the statements
of the Guarantor and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. QUALIFICATIONS. (a) There shall at all times be a Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then for the purposes of this
Section 4.01(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, possess those
qualifications.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i),(ii) and (iii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. 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
the Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
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(b) The Guarantee Trustee shall not be removed in accordance with Section
4.02(a) until a Successor Guarantee Trustee possessing the qualifications to act
as Guarantee Trustee under Section 4.01(a) has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until its
successor shall have been appointed and until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until: (i) a Successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee; or (ii) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders, if the Trust is
excluded from the definition of an Investment Company solely by reason of Rule
3a-7.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
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of amounts theretofore paid by the Issuer), regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.02. WAIVER OF NOTICE. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and, to the extent permitted by law, all other notices and demands.
SECTION 5.03. 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 Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership,
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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 Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. ENFORCEMENT OF GUARANTEE. The Guarantor and the Guarantee
Trustee expressly acknowledge 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) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
respect of this Guarantee Agreement, including the giving of directions to the
Guarantee Trustee, or exercising any trust or other power conferred upon the
Guarantee Trustee under this Guarantee Agreement, and (iv) if the Guarantee
Trustee fails to enforce this Guarantee Agreement, 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
Issuer, the Guarantee Trustee or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder of
Preferred Securities may directly institute a proceeding against the Guarantor
for enforcement of such Holder's right to receive payment under the Guarantee.
The Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other
16
person or entity before proceeding directly against the Guarantor.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not merely of collection. 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).
SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all
rights, if any, of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any 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 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay any
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock if at such
time (i) the Guarantor shall be in default with respect to its Guarantee
Payments or other payment obligations
17
hereunder, (ii) there shall have occurred any Event of Default (as defined in
the Declaration) or (iii) the Guarantor shall have given notice of its selection
of an extension period (as defined in the Indenture) and such period, or any
extension thereof, is continuing; PROVIDED, HOWEVER, that the foregoing
restrictions will not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Guarantor by way of issuance
of shares of its capital stock, (ii) declarations or payments of dividends in
connection with the implementation of a stockholders's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (iii) payments of accrued
dividends by the Guarantor upon the redemption, exchange or conversion of any
preferred stock of the Guarantor as may be outstanding from time to time in
accordance with the terms of such preferred stock, (iv) cash payments made by
the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (v) purchases or acquisitions of share of common stock in connection with
the satisfaction of obligations under any employee benefit plan or other
contractual obligation, (vi) dividends, distributions, redemptions, purchases,
acquisitions or payments as a result of a reclassification of capital stock or
conversion of one class or series of capital stock for another class or series
of capital stock.
SECTION 6.02. SUBORDINATION. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other indebtedness, liabilities and obligations of
the Guarantor and any guarantees, endorsements or other contingent obligations
of the Guarantor in respect of such indebtedness, liabilities or obligations,
including the Debentures, except those made PARI PASSU or subordinate by their
terms, and (ii) senior to all capital stock now or hereafter issued by the
Guarantor and to any guarantee now or hereafter entered into by the Guarantor in
respect of any of its capital stock. The Guarantor's obligations under this
Guarantee Agreement will rank PARI PASSU with respect to obligations under other
guarantee agreements which it may enter into from time to time to the extent
that such agreements shall be entered into in substantially the form hereof and
provide for comparable guarantees by the Guarantor of payment on preferred
securities issued by
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other business trusts of which the Guarantor holds the common securities.
ARTICLE VII
TERMINATION
This Guarantee Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred Securities, or
upon the distribution of Debentures to Holders in exchange for all the Preferred
Securities, or upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to the Preferred Securities or this Guarantee Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. EXCULPATION. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or wilful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of assets, liabilities, profits,
19
losses or any other facts pertinent to the existence and amounts of assets from
which Distributions to Holders might properly be paid.
SECTION 8.02. INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or wilful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or conveyance, transfer or lease of
assets involving the Guarantor that is permitted under Article Ten of the
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. AMENDMENTS. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be
20
required), this Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than 66-2/3% in liquidation amount of the Preferred
Securities. The provisions of Section 12.02 of the Declaration concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 9.03 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 as the Guarantor may give notice of to the Holders:
[ ]
[ ]
[ ]
Facsimile No.: [( ) ]
Attention: [ ]
(b) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice of to
the Holders:
[ ]
[ ]
[ ]
Facsimile No.: [( ) ]
Attention: [ ]
(c) if given to any Holder of Preferred Securities, 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 9.04. GENDERS. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
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SECTION 9.05. BENEFIT. This Guarantee Agreement is solely for the benefit
of the Holders and, subject to Section 3.01(a), is not separately transferable
from the Preferred Securities.
SECTION 9.06. 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 PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. COUNTERPARTS. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
SECTION 9.08. EXERCISE OF OVERALLOTMENT OPTION. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of any overallotment
option under the Underwriting Agreement (as defined in the Declaration), the
Guarantor agrees to give prompt notice thereof to the Guarantee Trustee, but the
failure to give such notice shall not relieve the Guarantor of any of its
obligations hereunder.
This Guarantee Agreement is executed as of the day and year first above
written.
[ ]
by
Name:
Title:
BANK ONE NATIONAL ASSOCIATION,
as Guarantee Trustee
by
Name:
Title:
