EXHIBIT 4.10
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PREFERRED SECURITIES GUARANTEE AGREEMENT
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST
Dated as of ___________, 1996
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TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by Preferred Guarantee Trustee
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Event of Default; Waiver
SECTION 2.7 Event of Default; Notice
SECTION 2.8 Conflicting Interests
SECTION 2.9 Disclosure of Information
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Preferred Guarantee Trustee
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
SECTION 5.2 Waiver of Notice and Demand
SECTION 5.3 Obligations Not Affected
SECTION 5.4 Rights of Holders
SECTION 5.5 Guarantee of Payment
SECTION 5.6 Subrogation
SECTION 5.7 Independent Obligations
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
SECTION 6.2 Ranking
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
SECTION 8.2 Indemnification
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
SECTION 9.2 Amendments
SECTION 9.3 Notices
SECTION 9.4 Benefit
SECTION 9.5 Governing Law
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of _______, 1996, is executed and delivered by Equitable of
Iowa Companies, an Iowa 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 Preferred Securities (as defined herein) of Equitable of
Iowa Companies Capital Trust, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to the Declaration (as defined herein), the
Issuer is issuing on the date hereof [ ] preferred securities,
having an aggregate liquidation amount of [ $ ] [(plus up to an
additional [ ] preferred securities, having an aggregate
liquidation amount of [$ ], to cover over-allotments)], designated
the ____% Trust Originated Preferred Securities (the "Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, 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 Preferred Securities the Guarantee Payments
(as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (as amended, modified or supplemented from time to time, 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 herein), except that if an Event of
Default (as defined in the Indenture), has occurred and is continuing,
the rights of holders of the Common Securities to receive payments under
the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
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
Preferred Securities Guarantee for the benefit of the Holders.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions.
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) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) 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;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) 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
(f) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to
close.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"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 Preferred Securities Guarantee is
located at One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services Division; telecopy
no. (▇▇▇) ▇▇▇-▇▇▇▇.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DEBENTURES" means the series of junior subordinated deferrable
interest debentures to be issued by the Guarantor designated the ___%
Junior Subordinated Deferrable Interest Debentures due [ ] held by
the Property Trustee (as defined in the Declaration) of the Issuer.
"DECLARATION" means the Declaration of Trust, dated as of March ___,
1996, as amended, modified or supplemented from time to time, 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.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be
paid on such Preferred Securities to the extent the Issuer shall have
funds available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds available
therefor, with respect to any Preferred Securities 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 distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Declaration or the redemption of all the
Preferred Securities upon maturity or redemption of the Debentures as
provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer
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) has occurred and is
continuing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments
under this Preferred Securities Guarantee.
"HOLDER" shall mean any holder, as registered on the books and records of
the Issuer of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor; and provided further,
that in determining whether the Holders of the requisite liquidation amount of
Preferred Securities have voted on any matter provided for in this Preferred
Securities Guarantee, then for the purpose of such determination only (and not
for any other purpose hereunder), if the Preferred Securities remain in the
form of one or more Global Certificates, the term "Holders" shall mean the
holder of the Global Certificate acting at the direction of the Preferred
Security Beneficial Owners.
"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 Indenture dated as of January 17, 1995, among
the Guarantor (the "Debenture Issuer") and The First National Bank of
Chicago, as trustee, and any indenture supplemental thereto pursuant to
which certain subordinated debt securities of the Debenture Issuer are
to be issued to the Property Trustee (as defined in the Declaration) of
the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided in the terms of the Preferred Securities or by the
Trust Indenture Act, Holder(s) of outstanding Preferred Securities,
voting separately as a class, who are the record holders of more than
50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Preferred Securities.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers (as defined in the
Declaration) of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Preferred Securities Guarantee 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 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.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"PREFERRED 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,
the secretary, 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 INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
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.
(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
Preferred Securities ("List of Holders"), (i) within one Business Day
after January 1 and June 30 of each year and current as of such date,
and (ii) at any other time, within 30 days of receipt by the Guarantor
of a written request from the Preferred Guarantee Trustee 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. The Preferred
Guarantee Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it,
provided that it 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 Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by Preferred Guarantee Trustee.
Within 60 days after May 15 of each year (commencing with the year
of the first anniversary of the issuance of the Preferred Securities),
the Preferred Guarantee Trustee shall provide to the Holders of the
Preferred Securities 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 (if any)
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 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 Event of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities
Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of
all Events of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, 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 Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice thereof, or a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge thereof.
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.
SECTION 2.9 Disclosure of Information.
The disclosure of information as to the names and addresses of the
Holders of the Preferred Securities in accordance with Section 312 of
the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any
existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the
Preferred Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim.
Upon the occurrence of an Event of Default, the Preferred Guarantee
Trustee is hereby authorized to (a) recover judgment, in its own name
and as trustee of an express trust, against the Guarantor for the whole
amount of any Guarantee Payments remaining unpaid and (b) file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have its claims and those of the Holders of the
Preferred Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities 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 in and to this
Preferred Securities Guarantee 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 Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred 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 Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and
is actually known to 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 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 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;
(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 Preferred Securities 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 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, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in 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; provided, that nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
(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 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 Preferred Securities,
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 Preferred Securities, (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.
(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 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 be 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
Person permitted by the Securities and Exchange Commission to act
as a trustee under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the 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 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 to the Guarantor of an instrument of
resignation, the resigning Preferred Guarantee Trustee 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 owing for fees and reimbursement of expenses which
have accrued 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 (without duplication of amounts
theretofore 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, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
Notwithstanding anything to the contrary herein, the Guarantor retains
all of its rights under the Indenture to (i) extend the interest payment
period on the Debentures and the Guarantor shall not be obligated
hereunder to make any Guarantee Payments during any Extended Interest
Payment Period (as defined in the Indenture) with respect to the
Distributions (as defined in the Declaration) on the Preferred
Securities, and (ii) extend the maturity date of the Debentures to the
extent permitted by the Indenture, provided that any such extension of the
maturity date will not adversely affect the federal income tax status of the
Issuer.
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 the following:
(a) The release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) The extension of time for the payment by the Issuer of all or
any portion of the Distributions, 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 (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 or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or
the Holders pursuant to the terms of the Preferred Securities, or any
action on the part of the Issuer granting indulgence or extension of any
kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) Any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) The settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) Any other 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 Preferred Guarantee Trustee or the
Holders to give notice to, or obtain consent of, the Guarantor or any other
Person 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 Preferred
Securities have the right to direct the time, method and place of conducting
of any proceeding for any remedy available to the Preferred Guarantee Trustee
in respect of this Preferred Securities Guarantee or exercising any trust or
power conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, then any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce its rights under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person. Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a Holder 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 Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, 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 Preferred Guarantee Trustee for the benefit of 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
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 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 Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, (b)
the Guarantor shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) 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); provided, however, the Guarantor may declare and
pay a stock dividend where the dividend stock is the same stock as that
on which the dividend is being paid.
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, including
the Debentures, except those liabilities of the Guarantor made pari
passu or subordinate by their terms, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the
Guarantor 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 upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon
the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the 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 Preferred Securities must restore payment of any sums paid under
the Preferred Securities 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 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 or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person
as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected
with reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Preferred
Securities might properly be paid.
SECTION 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 the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
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 Preferred Securities then outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders (in which case no consent of the Holders will be
required), this Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities. The provisions of Section 12.2 of
the Declaration with respect to meetings of, and action by written
consent of, the Holders of the Securities apply to the giving of such
approval.
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 registered or certified 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
Guarantor and the Holders of the Preferred Securities):
The First National Bank of Chicago
One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Services Division
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) If given to the Guarantor, at the Guarantor's mailing addresses
forth below (or such other address as the Guarantor may give notice
of to the Preferred Guarantee Trustee and the Holders of the Preferred
Securities):
Equitable of Iowa Companies
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
(c) If given to any Holder of Preferred Securities, 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 Preferred Securities and, subject to Section 3.1(a),
is not separately transferable from the Preferred Securities.
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 IOWA.
IN WITNESS WHEREOF, this Preferred Securities Guarantee is executed
as of the day and year first above written.
EQUITABLE OF IOWA COMPANIES,
as Guarantor
By: __________________________
Name:_________________________
Title:________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Guarantee Trustee
By: __________________________
Name:_________________________
Title:________________________
