EXHIBIT 4.7
GUARANTEE AGREEMENT
BETWEEN
U.S. HOME & GARDEN INC.
(AS GUARANTOR)
AND
WILMINGTON TRUST COMPANY
(AS TRUSTEE)
DATED AS OF
___________, 1998
CROSS-REFERENCE TABLE*
Section of Trust Section of
Indenture Act of 1939, as amended Guarantee Agreement
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310(a)(1)(2) 4.1(a)
310(a)(3)(4)(5) Inapplicable
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
312(c) 2.1
313 2.3
314(a)(1)(2)(3) 2.4
314(a)(4) 2.5
314(b) Inapplicable
314(c)(1)(2) 2.5
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 1.1
314(f) 2.1
315(a) 3.1(d),3.2(a)
315(b) 2.7
315(c) 3.1
315(d) 3.1
315(e) 2.1
316(a)(1)(a) 1.1,5.4
316(a)(1)(B) 1.1,2.6
316(a)(2) Inapplicable
316(b) 5.3
316(c) 9.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..................................................... 1
SECTION 1.1 Definitions........................................... 1
ARTICLE II. TRUST INDENTURE ACT............................................ 4
SECTION 2.1 Trust Indenture Act; Application....................... 4
SECTION 2.2 List of Holders........................................ 4
SECTION 2.3 Reports by the Guarantee Trustee....................... 5
SECTION 2.4 Periodic Reports to the Guarantee Trustee.............. 5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.............................................. 5
SECTION 2.6 Events of Default; Waiver.............................. 5
SECTION 2.7 Event of Default; Notice............................... 6
SECTION 2.8 Conflicting Interest................................... 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE
TRUSTEE........................................................ 6
SECTION 3.1 Powers and Duties of the Guarantee
Trustee................................................ 6
SECTION 3.2 Certain Rights of Guarantee Trustee.................... 8
SECTION 3.3 Indemnity.............................................. 10
ARTICLE IV. GUARANTEE TRUSTEE.............................................. 10
SECTION 4.1 Guarantee Trustee; Eligibility......................... 10
SECTION 4.2 Appointment, Removal and Resignation
of the Guarantee Trustee............................... 11
ARTICLE V. GUARANTEE....................................................... 11
SECTION 5.1 Guarantee.............................................. 11
SECTION 5.2 Waiver of Notice and Demand............................ 12
SECTION 5.3 Obligations Not Affected............................... 12
SECTION 5.4 Rights of Holders...................................... 13
SECTION 5.5 Guarantee of Payment................................... 13
SECTION 5.6 Subrogation............................................ 13
SECTION 5.7 Independent Obligations................................ 14
ARTICLE VI. COVENANTS AND SUBORDINATION.................................... 14
SECTION 6.1 Subordination.......................................... 14
SECTION 6.2 Pari Passu Guarantees ................................. 14
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ARTICLE VII. CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE.............................................. 14
SECTION 7.1 Guarantor May Consolidate, Etc., Only
on Certain Terms....................................... 14
SECTION 7.2 Successor Guarantor Substituted........................ 15
ARTICLE VIII. TERMINATION................................................... 15
SECTION 8.1 Termination............................................ 15
ARTICLE IX. MISCELLANEOUS.................................................. 16
SECTION 9.1 Successors and Assigns................................. 16
SECTION 9.2 Amendments............................................. 16
SECTION 9.3 Notices................................................ 16
SECTION 9.4 Benefit................................................ 17
SECTION 9.5 Interpretation......................................... 17
SECTION 9.6 Governing Law.......................................... 18
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GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT, dated as of ________________,
1998, is executed and delivered by U.S. HOME & GARDEN INC., a Delaware
corporation (the "Guarantor") having its principal office at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders from time to time of the Preferred Securities (as
defined herein) of U.S. Home & Garden Trust I, a Delaware statutory business
trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement, dated as of ________, 1998 (the "Trust Agreement"), among the
Guarantor, as Depositor, Wilmington Trust Company as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, the Administrative Trustees
named therein and the Holders from time to time of undivided beneficial
interests in the assets of the Trust, the Trust issued $55,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its ___% Cumulative
Trust Preferred Securities, Liquidation Amount $25 per Trust Preferred
Security (the "Preferred Securities");
WHEREAS, the Preferred Securities will be issued by the
Trust and the proceeds thereof, together with the proceeds from the issuance
of the Trust's Common Securities (as defined below), will be used to purchase
the Debentures (as defined in the Trust Agreement) of the Guarantor which was
deposited with Wilmington Trust Company, as Property Trustee under the Trust
Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth herein, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement and pursuant to Section 5.1 hereof extends the Guarantee
for the benefit of the Holders from time to time of the Preferred Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1 Definitions.
As used in this Guarantee Agreement, the terms set forth
below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Trust
Agreement and the Indenture (as defined herein), each as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, however, that an
Affiliate of the Guarantor shall not be deemed to be an Affiliate of the
Trust. For 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 either the board of directors of
the Guarantor or any committee of that board duly authorized to act hereunder.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not
have cured such default within 90 days after receipt of such notice.
"Guarantee" has the meaning set forth in Section 5.1.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by or on behalf of the Trust: (i) any accrued
and unpaid Distributions (as defined in the Trust Agreement) required to be
paid on the Preferred Securities, to the extent the Trust shall have funds on
hand available therefor at such time, (ii) the applicable Redemption Price (as
defined in the Trust Agreement), to the extent the 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 Trust, unless
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the Liquidation Distribution (as defined in the Trust Agreement) and (b) the
amount of assets of the Trust remaining available for distribution to Holders
of Preferred Securities after satisfaction of liabilities to creditors of the
Trust as required by applicable law.
"Guarantee Trustee" means Wilmington Trust Company, 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.
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"Holder" means any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"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 ____________, 1998, as supplemented and amended, between the Guarantor and
Wilmington Trust Company, as trustee.
"List of Holders" has the meaning specified in Section
2.2(a).
"Majority in Liquidation Amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the Liquidation Amount of
all then outstanding Preferred Securities issued by the Trust.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of
Directors of such Person or the President or a Vice President of such Person,
and by the Chief Financial Officer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each such officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Guarantees" means any guarantees similar to the
Guarantee issued, from time to time, by the Guarantor on behalf of holders of
one or more series of preferred securities issued by any U.S. Home & Garden
Trust (as defined in the Indenture) other than the Trust.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer of the Corporate Trust Administration of the Guarantee
Trustee 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.
"Securities Act" means the Securities Act of 1933, as
amended.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee (a) semiannually, on or before ____and ____ of each year,
a list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and
is not identical to a previously supplied list of Holders or has not otherwise
been received by the Guarantee Trustee in its capacity as such. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
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(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3 Reports by the Guarantee Trustee.
Not later than ____ of each year, commencing in the year
beginning January 1, 1998, the Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information, if any, as required by Section 314 of the Trust Indenture Act and
the compliance certificate required by Section 314 of the Trust Indenture Act,
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.
The Guarantor shall provide to the Guarantee Trustee, on an
annual basis, such evidence of compliance with such conditions precedent, if
any, provided for in this Guarantee Agreement that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote, on behalf of all the Holders, waive any
past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent therefrom.
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SECTION 2.7 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of a default in the payment of
a Guarantee Payment, the Guarantee Trustee shall be protected in withholding
such notice if and so long as the Board of Directors, the executive committee
or a trust committee of 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 written notice,
of such Event of Default.
SECTION 2.8 Conflicting Interest.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purpose of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee to any Person except to a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee
shall automatically vest in any Successor Guarantee Trustee, upon acceptance
by such Successor Guarantee Trustee of its appointment hereunder, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee for the benefit of the
Holders.
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(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
covenant shall be read into this Guarantee Agreement against the Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement, and use the
same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default that
may have occurred:
(A) The duties and obligations of the
Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Guarantee Agreement; and
(B) in the absence of bad faith on the
part of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee
and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee shall be under
a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in Liquidation Amount of the 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; and
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(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers,
if the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to
it.
SECTION 3.2 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officers' Certificate unless otherwise prescribed
herein.
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel, 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.
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(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 Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through its agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to
receive 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.
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SECTION 3.3 Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Guarantee Trustee, arising
out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000, and shall be a corporation meeting
the requirements of Section 310(a) of the Trust Indenture Act. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority, then, for the purposes of this Section
4.1(a)(ii) and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
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SECTION 4.2 Appointment, Removal and Resignation of
the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as
it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay
in full on a subordinated basis to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by or on behalf of the Trust), as and
when due, regardless of any defense, right of set-off or counterclaim which
the Trust may have or assert other than the defense of payment (the
"Guarantee"). The Guarantee is a continuing guarantee, and the Guarantor
fully, knowingly and unconditionally waives any right the Guarantor may have
to revoke the Guarantee as to any future transactions under Section 2815 of
the California Civil Code or otherwise. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts
by the Guarantor to the Holders or by causing the Trust to pay such amounts to
the Holders.
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SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
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
Guarantee Trustee, Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of
all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures as provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of
the Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust or
any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(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 the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders.
The Guarantor expressly acknowledges that: (i) this
Guarantee 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 on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available
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 Trust or any other Person.
SECTION 5.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of
collection. This Guarantee will not be discharged except by payment of the
Guarantee Payments in full (without duplication of amounts theretofore paid by
the Trust) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Trust in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Trust pursuant to section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this 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.
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SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Trust with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1 Subordination.
The obligations of the Guarantor under this Guarantee will
constitute unsecured obligations of the Guarantor and will rank subordinate
and junior in right of payment to all Senior Debt and Subordinated Debt (as
defined in the Indenture) in the same manner as Debentures (as defined in the
Trust Agreement).
SECTION 6.2 Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee shall
rank pari passu with the obligations of the Guarantor under all Other
Guarantees.
ARTICLE VII. CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 7.1 Guarantor May Consolidate, Etc., Only on
Certain Terms.
The Guarantor shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Guarantor or convey, transfer or lease its properties
and assets substantially as an entirety to the Guarantor, unless:
(1) in case the Guarantor shall consolidate with
or merge into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Guarantor substantially as an entirety shall be a corporation,
partnership or trust organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
expressly assume the Guarantor's obligations under this Guarantee;
(2) immediately after giving effect thereto, no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
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(3) such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Indenture and
does not give rise to any breach or violation of the Trust Agreement or the
Indenture; and
(4) the Guarantor has delivered to the Guarantee
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and assumption of
the Guarantor's obligations under this Guarantee Agreement comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Guarantee Trustee, subject to
Section 3.1 hereof, may rely upon such Officers' Certificate and Opinion of
Counsel as conclusive evidence that such transaction complies with this
Section 7.1.
SECTION 7.2 Successor Guarantor Substituted.
Upon any consolidation or merger by the Guarantor with or
into any other Person, or any conveyance, transfer or lease by the Guarantor
of its properties and assets substantially as an entirety to any Person in
accordance with Section 7.1, 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 Guarantee Agreement with the same
effect as if such successor Person had been named as the Guarantor herein; and
in the event of any such conveyance, transfer or lease the Guarantor shall be
discharged from all obligations and covenants under this Guarantee Agreement.
ARTICLE VIII. TERMINATION
SECTION 8.1 Termination.
This Guarantee Agreement shall terminate and be of no
further force and effect upon the earliest of (i) full payment of the
applicable Redemption Price of all Preferred Securities, (ii) the distribution
of Debentures to the Holders in exchange for all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of the Trust. Notwithstanding the foregoing clauses
(i) through (iii), this Guarantee Agreement will continue to be effective or
will be reinstated if it has been terminated pursuant to one of such clauses
(i) through (iii), as the case may be, if at any time any Holder must restore
payment of any sums paid with respect to Preferred Securities or this
Guarantee Agreement.
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ARTICLE IX. MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VII hereof and Article VIII of the Indenture, the Guarantor shall not
assign its obligations hereunder.
SECTION 9.2 Amendments.
Except with respect to any changes which do not adversely
affect the rights of the Holders in any material respect (in which case no
vote will be required), this Guarantee Agreement may not be amended without
the prior approval of the Holders of not less than a Majority in Liquidation
Amount of the Preferred Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 9.3 Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set
forth below or such other address, facsimile number or to the attention of
such other Person as the Guarantor may give notice to the Holders:
U.S. Home & Garden Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
(b) if given to the Trust, in care of the Guarantee Trustee,
at the Trust's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Trust may give notice
to the Holders:
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U.S. Home & Garden Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Wilmington Trust Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth
on the books and records of the 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 9.4 Benefit.
This Guarantee is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.
SECTION 9.5 Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
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(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the contest otherwise requires;
(f) a reference to the singular includes the plural
and vice versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 9.6 Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
U.S. HOME & GARDENS INC.
By:______________________________
Name: Xxxxxx Xxxxxx
Title: Chairman of the Board
and Chief Operating Officer
WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Guarantee Trustee
By:_______________________________
Name:
Title:
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