Exhibit 4(m)
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CNF Trust I
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PREFERRED SECURITIES GUARANTEE AGREEMENT
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Dated as of June 11, 1997
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TABLE OF CONTENTS
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PREFERRED SECURITIES GUARANTEE AGREEMENT......................... 1
ARTICLE I DEFINITIONS AND INTERPRETATION......................... 2
Section 1.1 Definitions and Interpretation................. 2
ARTICLE II TRUST INDENTURE ACT................................... 5
Section 2.1 Trust Indenture Act; Application............... 5
Section 2.2 Lists of Holders of Securities................. 5
Section 2.3 Reports by the Preferred Guarantee Trustee..... 6
Section 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
Section 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
Section 2.6 Events of Default; Waiver...................... 7
Section 2.7 Event of Default; Notice....................... 7
Section 2.8 Conflicting Interests.......................... 7
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE......................................... 8
Section 3.1 Powers and Duties of the Preferred Guarantee
Trustee........................................ 8
Section 3.2 Certain Rights of Preferred Guarantee Trustee.. 10
Section 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee................. 13
ARTICLE IV PREFERRED GUARANTEE TRUSTEE.................... 13
Section 4.1 Preferred Guarantee Trustee; Eligibility....... 13
Section 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
ARTICLE V GUARANTEE.............................................. 15
Section 5.1 Guarantee...................................... 15
Section 5.2 Waiver of Notice and Demand.................... 15
Section 5.3 Obligations Not Affected....................... 15
Section 5.4 Rights of Holders.............................. 17
Section 5.5 Guarantee of Payment........................... 17
Section 5.6 Subrogation.................................... 17
Section 5.7 Independent Obligations........................ 18
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ARTICLE VI LIMITATION OF TRANSACTIONS;
SUBORDINATION.................................. 18
Section 6.1 Limitation of Transactions..................... 18
Section 6.2 Ranking........................................ 19
ARTICLE VII TERMINATION.................................... 19
Section 7.1 Termination.................................... 19
ARTICLE VIII INDEMNIFICATION................................ 20
Section 8.1 Exculpation.................................... 20
Section 8.2 Indemnification................................ 20
ARTICLE IX MISCELLANEOUS.................................. 21
Section 9.1 Successors and Assigns......................... 21
Section 9.2 Amendments..................................... 21
Section 9.3 Notices........................................ 21
Section 9.4 Benefit........................................ 22
Section 9.5 Governing Law.................................. 22
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of June 11, 1997, is executed and delivered by
CNF Transportation Inc., a Delaware corporation (the "Guarantor"), and The First
National Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time of the TECONS
(as defined herein) of CNF Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 11, 1997, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing preferred securities, having an aggregate liquidation amount of
$110,000,000 ($125,000,000 if the Underwriters' over-allotment option is
exercised in full) designated the $2.50 Term Convertible Securities, Series A
(the "TECONS").
WHEREAS, as incentive for the Holders to purchase the TECONS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Preferred Securities Guarantee, to pay to the Holders of the
TECONS the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined in the Declaration
referred to below), except that if an Event of Default (as defined in the
Indenture (as defined herein)) with respect to the Debentures, has occurred and
is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of TECONS to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TECONS, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee have the same meaning when used
in this Preferred Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person; provided, however, that the Authorized Officer
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signing an Officers' Certificate given pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"Base Indenture" means the Indenture dated as of June 11, 1997 between
the Company and The First National Bank of Chicago, as trustee.
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of June 11, 1997 of the Sponsor in respect of the Common
Securities.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000.
"Covered Person" means any Holder or beneficial owner of TECONS.
"Declaration Event of Default" means an Event of Default as defined in
the Declaration.
"Guarantee Event of Default" means (i) the failure of the Guarantor to
perform any of its payment or other obligations under this Preferred Securities
Guarantee or (ii) the failure of the Guarantor to deliver CNF Common Stock upon
an appropriate election by any Holder of TECONS to convert such TECONS into
shares of CNF Common Stock.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TECONS, to the extent not paid or made
by the Issuer: (i) any accumulated and unpaid Distributions which are required
to be paid on such TECONS to the extent the Issuer shall have funds available
therefor, (ii) the redemption price (the "Redemption Price"), and all
accumulated and unpaid Distributions to but excluding the date of redemption to
the extent the Issuer has funds available therefor, with respect to any TECONS
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the conversion of all of the TECONS into CNF Common Stock, the redemption
of all outstanding TECONS or the distribution of Debentures to the Holders in
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exchange for TECONS as provided in the Declaration) or in connection with any
transaction permitted pursuant to Section 3.15 of the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the TECONS to but excluding the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of
Default (as defined in the Indenture) with respect to the Debentures has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of TECONS to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any TECONS; provided, however, that, in determining whether
the holders of the requisite percentage of TECONS have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of June 11,
1997, between the Guarantor (the "Debenture Issuer") and The First National Bank
of Chicago, as trustee, as supplemented by the First Supplemental Indenture
dated as of June 11, 1997, between the Debenture Issuer and The First National
Bank of Chicago, as trustee, as the same may be further amended or supplemented
from time to time in accordance with its terms.
"List of Holders" shall have the meaning assigned thereto in Section
2.2(a) hereof.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the TECONS or, except as provided by the Trust
Indenture Act, a vote by Holder(s) of TECONS, voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to but excluding the date upon which the voting percentages are
determined) of all outstanding TECONS.
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"Preferred Guarantee Trustee" means The First National Bank of
Chicago, until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers 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.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the TECONS.
ARTICLE II TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee 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 Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the TECONS
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("List of Holders") as of such date, (i) within 14 days after each record date
for payment of Distributions, as of such record date, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Preferred Guarantee Trustee, provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor or in the event that the Preferred Guarantee Trustee is
the Registrar under the Declaration. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the TECONS such reports as are required
by Section 313 of the Trust Indenture Act if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
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Section 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of TECONS may, by
vote, on behalf of the Holders of all of the TECONS, waive any past Guarantee
Event of Default and its consequences. Upon such waiver, any such Guarantee
Event of Default shall cease to exist, and any Guarantee Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Guarantee Event of Default or impair any right
consequent thereon.
Section 2.7 Guarantee Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Guarantee Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders of the TECONS, notices of all such Events
of Default, unless such defaults have been cured before the giving of such
notice, provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the TECONS.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Guarantee Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
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Section 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee 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 PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the TECONS, and
the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of TECONS exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment to
act as Successor Preferred Guarantee Trustee. The right, title and interest of
the Preferred Guarantee Trustee shall automatically vest in any Successor
Preferred Guarantee Trustee, 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 Preferred Guarantee Trustee.
(b) If an Guarantee Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall (and the Guarantor
acknowledges that the Preferred Guarantee Trustee shall) enforce this Preferred
Securities Guarantee for the benefit of the Holders of the TECONS.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Guarantee 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 Preferred Securities Guarantee, and no implied
covenants shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Guarantee Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Preferred Securities Guarantee, and use the same degree of care and skill
in its
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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 Preferred Securities Guarantee shall
be construed to relieve the Preferred 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 Guarantee 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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and
conforming to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
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(iii) the Preferred 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 amount of the TECONS relating to the time, method and place
of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee, or exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred 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
Preferred 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 Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
Section 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document 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 Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering
or omitting any action hereunder, the Preferred
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Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of
its selection, and the 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 accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Guarantee Trustee
such security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or 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 Preferred Guarantee Trustee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such
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further inquiry or investigation into such facts or matters as it may see
fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Preferred Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the TECONS, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Preferred Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the TECONS, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and (iii)
shall be protected in conclusively relying on or acting in accordance with
such instructions.
(xi) The Preferred 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 Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
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(xii) The Preferred Securities Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred Guarantee Trustee shall be construed to be
a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(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 other Person permitted by
the Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate
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trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
Person 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 4.1(a)(ii), the combined
capital and surplus of such Person 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 Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
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appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued and owing to the Preferred Guarantee Trustee to the date of such
termination, removal or resignation.
ARTICLE V GUARANTEE
Section 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (except to the extent paid, and without
duplication of amounts paid, by the Issuer), as and when due, 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 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee 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,
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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 Preferred Securities Guarantee 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 TECONS 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, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the TECONS or the extension of time
for the performance of any other obligation under, arising out of, or in
connection with, the TECONS (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
permitted by the Indenture);
(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 TECONS, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the TECONS;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
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(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
TECONS have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of TECONS may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder of TECONS may directly institute a proceeding against the
Guarantor for enforcement of this Preferred Securities Guarantee for such
payment.
Section 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
Section 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TECONS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
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however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
Section 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TECONS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions.
So long as any TECONS remain outstanding, if there shall have occurred
and be continuing any Guarantee Event of Default or any Declaration Event of
Default, then (a) the Guarantor shall not declare or pay any dividend on, or
make any distributions with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock (other than (A)
(i) purchases or acquisitions of shares of the Guarantor's capital stock (or
capital stock equivalents) in connection with the satisfaction by the Guarantor
of its obligations under any officers, directors or employee benefit plans (or
any options or other instruments issued thereunder) or the satisfaction by the
Guarantor of its obligations pursuant to any contract or security requiring the
Guarantor to purchase shares of the Guarantor's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Guarantor's capital stock (or
capital stock equivalents) from officers, directors or employees of the
Guarantor or its subsidiaries pursuant to employment agreements or upon
termination of employment or retirement, (iii) as a result of a
reclassification, combination or subdivision of the Guarantor's capital stock or
the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the
00
Xxxxxxxxx'x xxxxxxx xxxxx, (xx) dividends or distributions of shares of common
stock on common stock, (v) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or any security being converted or exchanged into such
capital stock, (vi) dividends or distributions on, or redemptions, purchases or
acquisitions of, or liquidation payments with respect to, the Guarantor's Series
B Cumulative Convertible Preferred Stock, (vii) purchases or other acquisitions
of common stock in connection with a dividend reinvestment or other similar
plan, or (viii) any dividend or distribution of capital stock (or capital stock
equivalents) in connection with the implementation of a stockholders 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, or (B) guarantee
payments made with respect to any of the foregoing), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures and (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than pursuant to this
Preferred Securities Guarantee or the Common Securities Guarantee Agreement).
Section 6.2 Ranking.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor except any liabilities that
may be pari passu expressly by their terms, (ii) pari passu in right of payment
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor, if any, and 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, and (iii) senior to the Guarantor's common stock.
ARTICLE VII TERMINATION
Section 7.1 Termination.
This Preferred Securities Guarantee shall terminate (i) upon full
payment of the redemption price of all TECONS, together with all accumulated and
unpaid Distributions thereon to but excluding the date of redemption, (ii) upon
the conversion of the TECONS into CNF Common Stock or other securities or
property as provided in the Declaration or upon the distribution of the
Debentures to the Holders of all of the TECONS or (iii) upon full payment of the
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amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of TECONS must restore payment of any sums paid under the TECONS
or under this Preferred Securities Guarantee.
ARTICLE VIII INDEMNIFICATION
Section 8.1 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, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee 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 Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage, liability, expense 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 TECONS might properly be
paid.
Section 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability 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
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the exercise or performance of any of its powers or duties hereunder. The
provisions of this Section 8.2 shall survive the termination of this Preferred
Securities Guarantee or the resignation or removal of the Preferred Guaranteed
Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 501(6) or
Section 501(7) of the Base Indenture, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for services are
intended to constitute expenses of administration under any applicable federal
or state bankruptcy, insolvency or other similar law.
ARTICLE IX MISCELLANEOUS
Section 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the TECONS then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity permitted by Section
801 of the Base Indenture or any sale, transfer or lease of the Guarantor's
assets to another entity permitted by Section 801 of the Base Indenture, the
Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the TECONS then outstanding. Upon any
consolidation by the Guarantor with or merger of the Guarantor into any other
Person or any conveyance, transfer or lease of the properties and assets of the
Guarantor substantially as an entirety to any Person in accordance with Section
801 of the Base Indenture, the successor Person formed by such consolidation or
into which the Guarantor is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Guarantor under this Preferred Securities Guarantee with
the same effect as if such successor Person had been named as the Guarantor
herein; and thereafter, except in the case of a lease, the predecessor Person
shall be released from all obligations and covenants under this Preferred
Securities Guarantee.
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Section 9.2 Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no vote or consent of Holders will
be required), this Preferred Securities Guarantee may be amended only with the
prior approval of the Holders of at least a Majority in liquidation amount of
all the outstanding TECONS. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to the giving of
such approval. For purposes of this Preferred Securities Guarantee, any change
which only eliminates or limits any of the dividends, distributions,
redemptions, purchases, acquisitions or liquidation payments which the Guarantor
is permitted to make pursuant to subclauses (A) or (B) of clause (a) of Section
6.1 shall be deemed not to materially adversely affect the rights of Holders.
Section 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders of
the TECONS):
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the TECONS):
CNF Transportation Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
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(c) If given to any Holder of TECONS, at the address set forth
on the books and records of the Issuer.
All such notices 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 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the TECONS and, subject to Section 3.1(a), is not separately
transferable from the TECONS.
Section 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CNF TRANSPORTATION, INC.,
as Guarantor
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Guarantee Trustee
By:
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Name:
-----------------------------------------------
Title:
----------------------------------------------
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