Exhibit 4.4
GUARANTEE AGREEMENT
SUPERIOR TELECOM INC.
and
[ ]
Dated as of __________, 1999
with respect to
8 1/2% TRUST CONVERTIBLE PREFERRED SECURITIES
(Liquidation Amount $50 per Preferred Security)
GUARANTEE
This GUARANTEE AGREEMENT, dated as of __________, 1999, is executed
and delivered by Superior TeleCom Inc., a Delaware corporation (the
"Guarantor"), and __________, a __________ banking corporation, as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of Superior
Trust I, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to a Declaration of Trust (the "Declaration of
Trust"), dated as of __________, 1999, among the Trustees named therein, the
Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Trust, the Trust is issuing
__________ of its 8 1/2% Trust Convertible Preferred Securities (liquidation
preference $50 per preferred security) (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Trust and having the terms set forth in the Declaration of Trust;
WHEREAS, the Preferred Securities and Common Securities (as defined
herein) will be issued by the Trust in consideration for the Debentures (as
defined in the Declaration of Trust) of the Guarantor, which will be
deposited with __________, as Property Trustee under the Declaration of
Trust, as Trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth herein, to pay to the Holders of the Preferred
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
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 of the Preferred
Securities.
ARTICLE 1
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
Declaration of Trust as in effect on the date hereof.
"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 include the Trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
possession, directly or indirectly, of the power to direct or cause the
direction
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of the management or policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; provided, however, that beneficial
ownership of 10% or more of the Voting Stock of an entity will be deemed to be
control. The terms "controlling" and "controlled" have meanings correlative to
"control."
"Common Securities" means the securities representing common
beneficial interests in the assets of the Trust.
"Common Stock" means common stock, par value $0.01 per share, of the
Guarantor or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Guarantor and which are not
subject to redemption by the Guarantor.
"Corporate Trust Office" shall mean the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at _________________________.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement, unless such payment
is prohibited by the subordination provisions of Article 6; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Trust: (a) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, but only if and
to the extent that the Trust has funds on hand available therefor at such time;
(b) the Redemption Price or Optional Redemption Price, as the case may be, of
any Preferred Securities called for redemption, but only if and to the extent
that the Trust has funds on hand available therefor at such time; and (c) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Trust
(unless the Debentures are distributed to Holders of the Preferred Securities),
the lesser of (i) the Liquidation Distribution, but only if and to the extent
that the Trust has funds on hand available therefor at such time and (ii) the
amount of assets of the Trust remaining available for distribution to Holders of
Preferred Securities.
"Guarantee Trustee" means ___________________, 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 Trust, 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,
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"Holder" shall not include the Guarantor, the Guarantee Trustee or any Affiliate
of the Guarantor or the Guarantee Trustee.
"Indemnified Person" shall mean the Guarantee Trustee (including in
its individual capacity), any Affiliate of the Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Guarantee Trustee (but in
no event shall "Indemnified Person" include the Trust, the Guarantor or any
Holder in their capacities as such).
"Indenture" means the Indenture, dated as of ________________, 1999,
between the Guarantor and _______________, as Indenture Trustee, as amended and
supplemented.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Preference of the Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holders, voting separately
as a class, of more than 50% of the aggregate Liquidation Amount of all the
Outstanding Preferred Securities issued by the Trust.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer, any Vice
President, the Chief Financial Officer or the Secretary of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's 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 Officer's 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 Officer's Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof or other entity.
"Responsible Officer" shall mean, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee
with direct responsibility for the administration of this Guarantee Agreement
and also means, with respect to a particular
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corporate trust matter, any other officer of the Guarantee Trustee to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"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 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
ARTICLE 2
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 shall furnish or cause to be furnished to the
Guarantee Trustee (unless the Guarantee Trustee is acting as Securities
Registrar) (i) semi-annually, on or before January 15 and July 15 of each year,
a list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof 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 written request, a List of Holders as of a date not
more than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied List of Holders or has not otherwise been
received by the Guarantee Trustee. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee. Within 60 days after
December 31 in each calendar year, commencing December 31, 1999, 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
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and in the manner 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 2.4 Periodic Reports to 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; and such compliance
certificate of the Guarantor shall be delivered on or before 120 days after the
end of each calendar year. 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 or determinable from 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
Officer's 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 Officer's
Certificate.
SECTION 2.6 Events of Default; Waiver. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the Holders
of all Preferred Securities, 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.
SECTION 2.7 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 30 days after a Responsible
Officer of the Guarantee Trustee obtains actual knowledge of the occurrence of
an Event of Default, transmit by mail, first-class postage prepaid, to the
Holders, notice of such Event of Default actually known to a Responsible Officer
of 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 fully protected in
withholding such notice if and so long as a Responsible Officer of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have actual knowledge
of any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the
Declaration of Trust shall have obtained actual knowledge, of such Event of
Default.
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SECTION 2.8 Conflicting Interests. The Declaration of Trust and the
Indenture 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 3
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.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee 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) and is
actually known to the Responsible Officer of the Guarantee Trustee, 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
no implied covenants or obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee; and
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(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 on their face 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 Liquidation
Preference of the Securities 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 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
indemnity satisfactory to it 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 conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, proxy, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document 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 Officer's 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
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is herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officer's 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 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 include any 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 request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee and its officers, directors and agents such security
and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees and custodians) 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 have no obligation 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, custodians, nominees or attorneys or any Affiliate, and the
Guarantee Trustee shall not be responsible for any misconduct or negligence on
the part of any such person 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 instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Guarantee Trustee (A) may request written instructions from the Holders of a
Majority in Liquidation Preference of the Securities, (B) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received and (C) shall be fully protected in relying on and
acting in accordance with such instructions.
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(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument or other document (or any
rerecording, refiling or re-registration thereof).
(x) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, 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.
(xi) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith, without negligence,
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.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
Agreement. 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
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE 4
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 corporation or other Person 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 other
Person permitted by the Securities and Exchange Commission to act as an
indenture 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; it being understood that if such
corporation or other Person publishes reports
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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 4.1(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.
(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 the 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.
(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 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 an 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.
(e) No Guarantee Trustee shall be liable for the acts or omissions of
any Successor Guarantor Trustee.
(f) Upon termination of this Guarantee Agreement or the removal or
resignation of the Guarantee Trustee, the Guarantor shall pay all amounts due
and owing to such Guarantee Trustee.
ARTICLE 5
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GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full, subject to the subordination provisions set forth in
Article 6, to the extent set forth herein, the Guarantee Payments to the Holders
(without duplication of amounts theretofore paid by or on behalf of the Trust),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Trust 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 Trust 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 of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Trust 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 Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust 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 as so provided in the Indenture), Redemption Price, Optional
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 Trust 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 Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
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(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 or the Guarantee Trustee 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) an executed copy of 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 Liquidation Preference of the
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 to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) if the
Guarantee Trustee fails to enforce the Guarantee, 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 Trust or any other Person.
SECTION 5.5 Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not 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 Trust) or upon distribution of
Debentures to Holders as provided in the Declaration of Trust.
SECTION 5.6 Subrogation. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust 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 5.3 hereof.
13
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1 Subordination.
(a) If an Event of Default (as defined in the Indenture) has occurred
and is continuing, the rights of holders of Common Securities to receive
payments on liquidation, redemption and otherwise are subordinate to the rights
of Preferred Securities to receive Guarantee Payments under this Guarantee.
(b) In the event and during the continuation of any default by the
Guarantor in the payment of principal, premium, interest or any other payment
due on any Senior Debt (as defined in the Indenture) (whether or not dependent
upon the giving of notice, the lapse of time or both, or any other condition to
such default becoming an event of default), unless and until such default shall
have been cured or waived or shall have ceased to exist, and in the event that
the maturity of any Senior Debt has been accelerated because of a default, then
no Guarantee Payments shall be made hereunder by the Guarantor and neither the
Guarantee Trustee nor any Holder shall have any rights or remedies hereunder to
receive such Guarantee Payments.
(c) In the event of any default (other than a default described in the
immediately preceding paragraph) by the Guarantor under the terms of any
instrument evidencing any Senior Debt (whether or not dependent upon the giving
of notice, the lapse of time or both or any other condition), unless and until
such default shall have been cured or waived or shall have ceased to exist, no
Guarantee Payments shall be made hereunder by the Guarantor and neither the
Guarantee Trustee nor any Holder shall have any rights or remedies hereunder to
receive such Guarantee Payments.
(d) In the event of (i) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any total or partial liquidation, dissolution or other winding-up of the
Guarantor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any general assignment for the benefit of
creditors or any other marshaling of assets or liabilities of the Guarantor,
then and in any such event:
(1) the holders of Senior Debt shall be entitled to receive
payment and satisfaction in full in cash of all amounts due on or in
respect of all Senior Debt before any Guarantee Payment is made; and
(2) any payment or distribution of assets of the Guarantor of any
kind or character, whether in cash, property or securities, by set-off
or otherwise, to which the Holders or the Guarantee Trustee would be
entitled but for the provisions of this Section 6.1, shall be paid by
the liquidating trustee or agent or other Person making such payment
14
or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior
Debt or their representative or representatives, or to the trustee or
trustees under any indenture under which any instruments evidencing
any of such Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Debt held
or represented by each, to the extent necessary to make payment in
full in cash of all Senior Debt remaining unpaid, after giving effect
to any concurrent payment or distribution to the holders of such
Senior Debt, before any such payment or distribution is made to the
Holders or to the Guarantee Trustee.
(e) In the event that, notwithstanding the foregoing, the Guarantee
Trustee or any Holder shall have received any payment or distribution of assets
of the Guarantor of any kind or character, whether in cash, property or
securities, including, without limitation, by way of set-off or otherwise,
before all Senior Debt is paid and satisfied in full in cash, then and in such
event such payment or distribution shall be held by the Guarantee Trustee or
such Holder, as the case may be, in trust for the benefit of the holders of such
Senior Debt and shall be immediately paid over or delivered forthwith to the
liquidating trustee or agent or other Person making payment or distribution of
assets of the Guarantor for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full in cash
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
(f) The consolidation of the Guarantor with, or the merger of the
Guarantor with or into, another Person or the liquidation or dissolution of the
Guarantor following the transfer of all its assets (as an entirety or
substantially as an entirety) to another Person upon the terms and conditions
set forth in Article 8 of the Indenture shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of creditors
or marshaling of assets and liabilities of the Guarantor for the purposes of
this Section 6.1 if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by transfer such assets (as
an entirety or substantially as an entirety) shall, as a part of such
consolidation, merger or transfer, comply with the conditions set forth in
Article 8 of the Indenture.
(g) Amounts paid or payable by the Guarantor under Article 9 hereof
shall not be subject to the provisions and operation of this Article 6.
(h) This Guarantee Agreement shall rank pari passu with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor that is senior to the Common
Stock.
SECTION 6.2 Certain Covenants of the Guarantor.
(a) Guarantor covenants and agrees that if and so long as (i) the
Trust is the holder of all the Debentures, (ii) a Tax Event in respect of the
Trust has occurred and is continuing and
15
(iii) the Guarantor has elected, and has not revoked such election, to pay
Additional Sums in respect of the Preferred Securities and Common Securities,
the Guarantor will pay to the Trust such Additional Sums.
(b) The Guarantor covenants and agrees for so long as Preferred
Securities are Outstanding (i) not to convert Debentures except pursuant to a
Notice of Conversion delivered to the Conversion Agent by a Holder of Trust
Securities, (ii) to maintain directly or indirectly 100% ownership of the Common
Securities, provided that certain successors which are permitted pursuant to the
Indenture may succeed to the Guarantor's ownership of the Common Securities,
(iii) not to voluntarily dissolve, wind-up, liquidate or terminate the Trust,
except in accordance with the terms of the Declaration of Trust, (iv) to
maintain the reservation for issuance of the number of shares of Common Stock
that would be required from time to time upon the conversion of all the
Debentures then outstanding, (v) to use its reasonable best efforts, consistent
with the terms and provisions of the Declaration of Trust, to cause the Trust to
remain classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes and (vi) to deliver
shares of Common Stock as promptly as practicable on or after any Conversion
Date.
ARTICLE 7
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 Optional Redemption Price, as the case may be, of all Preferred Securities,
(ii) the distribution of Debentures to the Holders in exchange for all of the
Preferred Securities, (iii) full payment of the amounts payable in accordance
with the Declaration of Trust upon dissolution or liquidation of the Trust or
(iv) the distribution, if any, of Common Stock to the Holders of the Preferred
Securities in respect of the conversion of all such Holders' Preferred
Securities into Common Stock. 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 Preferred Securities or this Guarantee Agreement.
ARTICLE 8
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 Preferred Securities then Outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article 8 of the Indenture and pursuant to which the 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 that do not
materially adversely affect the rights of the Holders (in which case no vote
will be required), this Guarantee
16
Agreement may not be amended without the prior approval of the Holders of not
less than a Majority in Liquidation Preference of the Securities. The provisions
of Article 6 of the Declaration of Trust concerning meetings of the Holders
shall apply to the giving of such approval. No provisions in Article 3, Article
4 or Article 9, Section 6.1(g) or this sentence may be amended without the prior
written consent of the Guarantee Trustee, which consent may be granted or
withheld in the sole discretion of the Guarantee Trustee. The Guarantor shall
furnish the Guarantee Trustee with an Officer's Certificate and an Opinion of
Counsel to the effect that any amendment of this Guarantee Agreement is
authorized and permitted.
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 as the Guarantor may give notice of to the Holders:
Superior TeleCom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
(b) if given to the Trust, in care of the Guarantee Trustee, at the
Trust's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Trust may give notice of to
the Holders:
Superior TeleCom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
with a copy to:
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
17
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. This Guarantee Agreement is solely for the
benefit of the Holders, the Guarantee Trustee and other Indemnified Persons and
is not separately transferable from the Preferred 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.
ARTICLE 9
INDEMNIFICATION
SECTION 9.1 Exculpation.
18
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Holder for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee Agreement and
in a manner that 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 willful 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 the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 9.2 Compensation and Indemnification.
The Guarantor agrees to pay to the Guarantee Trustee such compensation
for its services as shall be mutually agreed upon by the Guarantor and the
Guarantee Trustee (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust). The
Guarantor shall reimburse the Guarantee Trustee upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation and
expenses of the Guarantee Trustee's agents and counsel, except any expense as
may be attributable to the negligence or bad faith of the Guarantee Trustee.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions of this
Section 9.2 shall survive the termination of this Guarantee Agreement and shall
survive the resignation or removal of the Guarantee Trustee.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
SUPERIOR TELECOM INC.,
19
as Guarantor
By:
--------------------------
Name:
Title:
[Guarantee Trustee],
not in its individual capacity but solely as
Guarantee Trustee
By:
--------------------------
Name:
Title:
20
TABLE OF CONTENTS
Page No.
--------
ARTICLE 1
DEFINITIONS..............................................................................................2
SECTION 1.1 Definitions..................................................................................2
ARTICLE 2
TRUST INDENTURE ACT......................................................................................5
SECTION 2.1 Trust Indenture Act; Application............................................................5
SECTION 2.2 List of Holders.............................................................................5
SECTION 2.3 Reports by the Guarantee Trustee............................................................6
SECTION 2.4 Periodic Reports to Guarantee Trustee. .....................................................6
SECTION 2.5 Evidence of Compliance with Conditions Precedent............................................6
SECTION 2.6 Events of Default; Waiver...................................................................6
SECTION 2.7 Event of Default; Notice....................................................................6
SECTION 2.8 Conflicting Interests.......................................................................7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.......................................................7
SECTION 3.1 Powers and Duties of the Guarantee Trustee..................................................7
SECTION 3.2 Certain Rights of Guarantee Trustee.........................................................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee Agreement............................10
ARTICLE 4
GUARANTEE TRUSTEE.......................................................................................10
SECTION 4.1 Guarantee Trustee; Eligibility.............................................................10
SECTION 4.2 Appointment, Removal and Resignation of the Guarantee Trustee..............................11
ARTICLE 5
GUARANTEE...............................................................................................12
SECTION 5.1 Guarantee..................................................................................12
SECTION 5.2 Waiver of Notice and Demand................................................................12
SECTION 5.3 Obligations Not Affected...................................................................12
SECTION 5.4 Rights of Holders..........................................................................13
SECTION 5.5 Guarantee of Payment.......................................................................13
SECTION 5.6 Subrogation................................................................................13
ARTICLE 6
COVENANTS AND SUBORDINATION.............................................................................14
SECTION 6.1 Subordination..............................................................................14
SECTION 6.2 Certain Covenants of the Guarantor.........................................................15
Page No.
--------
ARTICLE 7
TERMINATION
........................................................................................................16
SECTION 7.1 Termination................................................................................16
ARTICLE 8
MISCELLANEOUS...........................................................................................16
SECTION 8.1 Successors and Assigns.....................................................................16
SECTION 8.2 Amendments.................................................................................17
SECTION 8.3 Notices....................................................................................17
SECTION 8.4 Benefit....................................................................................18
SECTION 8.5 Interpretation.............................................................................18
SECTION 8.6 Governing Law..............................................................................18
ARTICLE 9
INDEMNIFICATION.........................................................................................19
SECTION 9.1 Exculpation................................................................................19
SECTION 9.2 Compensation and Indemnification...........................................................19
ii
CROSS REFERENCE TABLE*
SECTION OF TRUST SECTION OF
INDENTURE ACT OF GUARANTEE
1939, AS AMENDED AGREEMENT
310(a) .................................................................. 4.1(a)
310(b) .................................................................. 4.1(c), 2.8
310(c)................................................................... Inapplicable
311(a)................................................................... 2.2(b)
311(b) .................................................................. 2.2(b)
311(c)................................................................... Inapplicable
312(a) .................................................................. 2.2(a)
312(b)................................................................... 2.2(b)
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) ................................................................. 3.2
315(a) ................................................................. 3.1(d)
315(b) ................................................................. 2.7
315(c) ................................................................. 3.1
315(d) ................................................................. 3.1(d)
316(a) ................................................................. 1.1, 2.6, 5.4
316(b) ................................................................. 5.3
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.
i
