1
Exhibit 4(e)
GUARANTEE AGREEMENT
BY AND BETWEEN
SEA PINES ASSOCIATES, INC.
as Guarantor
and
FIRST UNION NATIONAL BANK
as Guarantee Trustee
RELATING TO
SEA PINES ASSOCIATES TRUST I
---------------------------
Dated as of February 1, 2000
---------------------------
2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS........................................... 2
SECTION 1.1. Definitions............................................................... 2
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE..................... 5
SECTION 2.1. Powers and Duties of the Guarantee Trustee................................ 5
SECTION 2.2. Certain Rights of Guarantee Trustee....................................... 6
SECTION 2.3. Compensation; Indemnity; Fees............................................. 8
ARTICLE III
GUARANTEE TRUSTEE........................................ 8
SECTION 3.1. Guarantee Trustee; Eligibility............................................ 8
SECTION 3.2. Appointment, Removal and Resignation of the Guarantee Trustee............. 9
ARTICLE IV
GUARANTEE............................................ 9
SECTION 4.1. Guarantee................................................................. 9
SECTION 4.2. Waiver of Notice and Demand............................................... 9
SECTION 4.3. Obligations Not Affected.................................................. 10
SECTION 4.4. Rights of Holders......................................................... 11
SECTION 4.5. Unconditional Right of Holders to Payment................................. 11
SECTION 4.6. Guarantee of Payment...................................................... 11
SECTION 4.7. Subrogation............................................................... 11
SECTION 4.8. Independent Obligations................................................... 11
SECTION 4.9. Events of Default; Waiver................................................. 12
SECTION 4.10. Event of Default; Notice.................................................. 12
ARTICLE V
COVENANTS AND SUBORDINATION................................... 12
SECTION 5.1. Subordination............................................................. 12
SECTION 5.2. Pari Passu Guarantees..................................................... 13
i
3
ARTICLE VI
TERMINATION............................................ 13
SECTION 6.1. Termination............................................................... 13
ARTICLE VII
MISCELLANEOUS.......................................... 13
SECTION 7.1. Successors and Assigns.................................................... 13
SECTION 7.2. Amendments................................................................ 13
SECTION 7.3. Record Date............................................................... 14
SECTION 7.4. Notices................................................................... 14
SECTION 7.5. Benefit................................................................... 15
SECTION 7.6. Governing Law............................................................. 15
SECTION 7.7. Counterparts.............................................................. 15
ii
4
GUARANTEE AGREEMENT, dated as of February 1, 2000 (the "Guarantee
Agreement"), by and between Sea Pines Associates, Inc., a South Carolina
corporation (the "Guarantor"), and First Union National Bank, a national banking
association with its corporate trust office in the State of South Carolina, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Trust Preferred Securities (as defined herein)
of Sea Pines Associates Trust I, a Delaware statutory business trust (the
"Issuer Trust").
RECITALS OF THE CORPORATION
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of February 1, 2000 (the "Trust Agreement," as more particularly defined
herein), among Sea Pines Associates, Inc., as Depositor, the Property Trustee,
the Delaware Trustee, the Administrative Trustees (as such terms are defined in
the Trust Agreement), the Holders and the holders of the Trust Common Securities
(as defined herein), the Issuer Trust is issuing $2,479,880 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its 9.5% Trust
Preferred Securities (liquidation amount of $7.60 per Trust Preferred Security)
(the "Trust Preferred Securities," and together with the Trust Common
Securities, the "Trust Securities"), representing preferred undivided beneficial
interests in the assets of the Issuer Trust and having the terms set forth in
the Trust Agreement; and
WHEREAS, pursuant to an Exchange Offer dated December 21, 1999, the
holders of Series A Cumulative Preferred Stock of the Guarantor (the "Preferred
Stock") may tender a number of shares of Preferred Stock in exchange for Trust
Preferred Securities of an equal Liquidation Amount; and
WHEREAS, the Issuer Trust proposes to (a) issue the Trust Preferred
Securities, (b) issue and sell the Trust Common Securities to the Guarantor, (c)
exchange the Trust Preferred Securities for the Preferred Stock, (d) acquire and
hold the Debentures (as defined in the Trust Agreement) in a principal amount
equal to the aggregate Liquidation Amount of the Trust Securities; and
WHEREAS, as an incentive for the holders to tender the Preferred Stock
in exchange for the Trust Preferred Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth herein, to pay
to the Holders of the Trust 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 exchange of shares of Preferred
Stock for Trust Preferred Securities by each Holder, which exchange the
Guarantor hereby acknowledges shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the Holders
from time to time.
1
5
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
For all purposes of this Guarantee Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article I have the meanings assigned to
them in this Article I, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an
"Article," a "Section" or other subdivision refers to an Article, a Section or
other subdivision, as the case may be, of this Guarantee Agreement; and
(f) The words "hereby," "herein," "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.
"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. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means, as the context requires, the board of
directors of the Guarantor or the Executive Committee of the board of directors
of the Guarantor (or any other committee of the board of directors of the
Guarantor performing similar functions) or a committee designated by the board
of directors of the Guarantor (or such committee), comprised of two or more
members of the board of directors of the Guarantor or officers of the Guarantor,
or both.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
2
6
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by or on behalf of the Issuer Trust: (i) any accumulated
and unpaid Distributions (as defined in the Trust Agreement) required to be paid
on the Trust Preferred Securities, to the extent the Issuer Trust shall have
funds on hand available therefor at such time; (ii) the Redemption Price (as
defined in the Trust Agreement) with respect to any Trust Preferred Securities
called for redemption by the Issuer Trust, to the extent the Issuer Trust shall
have funds on hand available therefor at such time; and (iii) upon a voluntary
or involuntary termination, winding-up or liquidation of the Issuer Trust,
unless Debentures are distributed to the Holders, the lesser of (a) the
Liquidation Distribution (as defined in the Trust Agreement) with respect to the
Trust Preferred Securities, to the extent that the Issuer Trust shall have funds
on hand available therefor at such time, or (b) the amount of assets of the
Issuer Trust remaining available for distribution to Holders on liquidation of
the Issuer.
"Guarantee Trustee" means First Union National Bank, solely in its
capacity as Guarantee Trustee and not in its individual capacity, 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.
"Guarantor" has the meaning specified in the preamble of this Guarantee
Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any
Trust Preferred Securities; provided, however, that in determining whether the
holders of the requisite percentage of Trust Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of
February 1, 2000, among the Guarantor and First Union National Bank, as trustee,
as the same may be modified, amended or supplemented from time to time.
"Issuer Trust" has the meaning specified in the preamble of this
Guarantee Agreement.
"Majority in Liquidation Amount of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, Trust Preferred Securities
representing more than 50% of the aggregate Liquidation Amount (as defined in
the Trust Agreement) of all Trust Preferred Securities then Outstanding (as
defined in the Trust Agreement).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board of Directors of such Person or
the Chief Executive Officer, the President, the Chief Financial Officer, a Vice
President or the Treasurer of such Person, and by the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
3
7
(a) a statement by each officer signing the Officers' Certificate that
such officer 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 such officer in rendering the Officers' Certificate;
(c) a statement that 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 such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Stock" means the Series A Cumulative Preferred Stock of the
Guarantor, issued and outstanding, which is exchanged by the holders thereof for
an equal Liquidation Amount of Trust Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee and also means, with respect to a
particular matter, any other officer 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 3.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Guarantee Agreement 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.
"Trust Preferred Securities" has the meaning specified in the recitals
to this Guarantee Agreement.
4
8
"Trust Securities" has the meaning specified in the recitals to this
Guarantee Agreement.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 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 to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting 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 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. 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 wilful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions
5
9
furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof
or of the Trust Indenture Act are specifically required to be
furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee
Agreement.
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made.
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Trust Preferred 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.
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 2.2 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 2.1:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, security, note, other
evidence of indebtedness or other paper or document reasonably believed
by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
6
10
(iv) The Guarantee Trustee may consult with legal counsel of
its selection, and the written advice or opinion of such legal counsel
with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that
nothing contained in this clause (v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care 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
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received and (C) shall be protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
7
11
SECTION 2.3 Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as may be agreed
by the Guarantor and the Guarantee Trustee from time to time (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Guarantee
Trustee in accordance with any provision of this Guarantee Agreement
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
ARTICLE III
GUARANTEE TRUSTEE
SECTION 3.1 Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of its supervising or examining
authority, then, for the purposes of this Section 3.1, 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.
8
12
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under subsection (a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 3.2.
SECTION 3.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to subsection (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 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 3.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE IV
GUARANTEE
SECTION 4.1. Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set off or counterclaim that the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust
to pay such amounts to the Holders.
(b) The obligations of the guarantor to make Guarantee Payments
pursuant to this Guarantee Agreement shall be limited to the payment of not more
than $10,000,000 in Liquidation Amount of the Trust Preferred Securities.
9
13
SECTION 4.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer 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 4.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer 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 provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the Trust
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Trust 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 Trust Preferred
Securities, or any action on the part of the Issuer Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer Trust or any of the assets of the
Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it being the intent of this Section 4.3
that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
10
14
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 4.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Trust Preferred 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 exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 4.5. Unconditional Right of Holders to Payment.
Notwithstanding any other provision of this Guarantee Agreement, each
Holder shall have the right, which is absolute and unconditional, to receive
Guarantee Payments when due, and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 4.6. 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 Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 4.7. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold the amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 4.8. Independent Obligations.
11
15
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Trust
Preferred Securities and that it 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 4.3 hereof.
SECTION 4.9. Events of Default; Waiver.
The Holders of at least a Majority in Liquidation Amount of the Trust
Preferred Securities may, by vote, on behalf of the Holders of all the Trust
Preferred Securities, waive any past default or Event of Default and its
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 4.10. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notice of any such Event of Default known to the Guarantee Trustee,
unless such Event of Default has been cured before the giving of such notice,
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
(c) Subject to the provisions of Section 4.4 hereof, in the case of a
default by the Guarantor in any of its payment obligations under this Guarantee
Agreement, when and as the same shall become due and payable, the Guarantee
Trustee shall have the right, subject to the rights of the Holders hereunder, to
recover judgment against the Guarantor for the whole amount of such payments
remaining unpaid.
12
16
ARTICLE V
COVENANTS AND SUBORDINATION
SECTION 5.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor, to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article Thirteen of the
Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Debt of the Guarantor.
SECTION 5.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement rank
pari passu with the obligations of the Guarantor under (i) any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred or
capital securities issued by any Issuer Trust (as defined in the Indenture),
(ii) the Indenture and the Securities (as defined therein) issued thereunder and
(iii) any other security, guarantee or other agreement or obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Guarantee Agreement or with any obligation that ranks pari passu with the
obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all Trust Preferred Securities, (ii) full payment of the amounts
payable in accordance with Article Nine of the Trust Agreement upon liquidation
of the Issuer Trust or (iii) distribution of Debentures to the Holders in
exchange for all of the Trust Preferred Securities. 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 is required to repay
any sums paid with respect to Trust Preferred Securities or this Guarantee
Agreement.
13
17
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. 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 Trust
Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture and pursuant to which the successor or assignee
agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder, and any purported
assignment other than in accordance with this provision shall be void.
SECTION 7.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required) or otherwise to comply with the requirements of the
Securities and Exchange Commission in order to permit qualification of this
Guarantee Agreement under any federal statute as now or hereinafter in effect or
any State "Blue Sky" law if the Corporation so directs, this Guarantee Agreement
may only be amended with the prior approval of the Holders of a Majority in
Liquidation Amount of the Trust Preferred Securities.
SECTION 7.3. Record Date.
For purposes of any action to be taken by Holders pursuant to Sections
4.4, 4.9 or 7.2 hereof, the provisions of Article Six of the Trust Agreement
concerning meetings of the Holders shall apply.
SECTION 7.4. Notices.
Any notice, request or other communication required or permitted to be
given hereunder 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 or telecopy number set
forth below or such other address or telecopy number as the Guarantor may give
notice to the Guarantee Trustee and the Holders:
Sea Pines Associates, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
14
18
(b) if given to the Guarantee Trustee, at the address or telecopy
number set forth below or such other address or telecopy number as the Guarantee
Trustee may give notice to the Guarantor and Holders:
First Union National Bank
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
with a copy to:
Sea Pines Associates Trust I
c/o Sea Pines Associates, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.
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 7.5. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Trust Preferred Securities.
SECTION 7.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA.
SECTION 7.7. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed be deemed to be an original, but all such counterparts
together constitute but one and the same instrument.
15
19
IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.
SEA PINES ASSOCIATES, INC.
By:__________________________________________
Name:
Title:
FIRST UNION NATIONAL BANK, as Guarantee Trustee
By:__________________________________________
Name:
Title:
16
