1
EXHIBIT 4.16
================================================================================
Form of
Guarantee Agreement
between
NATIONWIDE FINANCIAL SERVICES, INC.
(as Guarantor)
and
WILMINGTON TRUST COMPANY
(as Preferred Guarantee Trustee)
of
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST II
Dated as of
________________,____
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions and Interpretation.............................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application...........................................4
SECTION 2.02. List of Holders............................................................4
SECTION 2.03. Reports by the Preferred Guarantee Trustee.................................5
SECTION 2.04. Periodic Reports to Preferred Guarantee Trustee............................5
SECTION 2.05. Evidence of Compliance with Conditions Precedent...........................5
SECTION 2.06. Events of Default; Waiver..................................................5
SECTION 2.07. Event of Default; Notice...................................................5
SECTION 2.08. Conflicting Interests......................................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
PREFERRED GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Preferred Guarantee Trustee.......................6
SECTION 3.02. Certain Rights of Preferred Guarantee Trustee..............................8
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee......................9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.01. Preferred Guarantee Trustee; Eligibility..................................10
SECTION 4.02. Appointment, Removal and Resignation of the Preferred Guarantee
Trustee.........................................................................10
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee.................................................................11
SECTION 5.02. Waiver of Notice and Demand...............................................11
SECTION 5.03. Obligations Not Affected..................................................12
SECTION 5.04. Rights of Holders.........................................................12
SECTION 5.05. Guarantee of Payment......................................................13
SECTION 5.06. Subrogation...............................................................13
-i-
3
SECTION 5.07. Independent Obligations...................................................13
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitations of Transactions...............................................13
SECTION 6.02. Ranking...................................................................14
ARTICLE VII
TERMINATION
SECTION 7.01. Termination...............................................................14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Exculpation...............................................................14
SECTION 8.02. Indemnification...........................................................15
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Successors and Assigns....................................................15
SECTION 9.02. Amendments................................................................16
SECTION 9.03. Notices...................................................................16
SECTION 9.04. Benefit...................................................................17
SECTION 9.05. Governing Law.............................................................17
-ii-
4
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee of
1939, as amended Agreement
---------------- ---------
310(a)............................................... 4.01(a)
310(b)............................................... 4.01(c), 2.08
310(c)............................................... Inapplicable
311(a)............................................... 2.02(b)
311(b)............................................... 2.02(b)
311(c)............................................... Inapplicable
312(a)............................................... 2.02(a)
312(b)............................................... 2.02(b)
313.................................................. 2.03
314(a)............................................... 2.04
314(b)............................................... Inapplicable
314(c)............................................... 2.05
314(d)............................................... Inapplicable
314(e)............................................... 1.01, 2.05, 3.02
314(f)............................................... 2.01, 3.02
315(a)............................................... 3.01(d)
315(b)............................................... 2.07
315(c)............................................... 3.01
315(d)............................................... 3.01(d)
316(a)............................................... 1.01, 2.06, 5.04
316(b)............................................... 5.03
316(c)............................................... 8.02
317(a)............................................... Inapplicable
317(b)............................................... Inapplicable
318(a)............................................... 2.01(b)
318(b)............................................... 2.01
318(c)............................................... 2.01(a)
------------------
* 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.
-iii-
5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of __________, ____, is executed and delivered by Nationwide Financial
Services, Inc., a Delaware corporation (the "Guarantor"), to Wilmington Trust
Company, 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 Nationwide Financial Services Capital Trust II, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, ____ among the Trustees named therein,
the Guarantor, as Sponsor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
$___________ aggregate liquidation amount of its ___% [Trust Originated
Preferred] [Capital] Securities (liquidation amount of $[ ] per preferred
security) (the "Preferred Securities") representing undivided beneficial
interests in the assets of the Issuer and having the terms set forth in the
Declaration;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of its
Common Securities, will be used to purchase the Debentures (as defined in the
Declaration) of the Guarantor which will be deposited with Wilmington Trust
Company, as Property Trustee under the Declaration, as Trust Property (as
defined in the Declaration);
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default (as
defined in the Indenture) has occurred and is continuing, the Guarantee 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 from time to time of the Preferred
Securities.
6
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions and Interpretation. In this Preferred
Securities Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.01;
(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 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" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the common securities representing undivided
beneficial interests in the assets of the Issuer and having the rights provided
therefor in the Declaration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" shall have the meaning specified in Section 2.06
(a).
"Guarantee Payments" means the following payments, without duplication,
with respect to the Preferred Securities, to the extent not paid or made by or
on behalf of the Issuer pursuant to the Declaration or by the Guarantor pursuant
to the Indenture: (i) any accumulated and unpaid Distributions required to be
paid on the Preferred Securities, to the extent the Issuer shall have
-2-
7
funds available therefor, (ii) the redemption price (the "Redemption Price") and
all accrued and unpaid Distributions to the date of redemption to the extent the
Issuer shall have funds available therefor, and (iii) upon a voluntary or
involuntary dissolution and liquidation of the Issuer (other than in connection
with a Distribution of Debentures to Holders of such Preferred Securities or the
redemption of all such Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount of $[ ] per Preferred Security plus 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 of
Preferred Securities upon a dissolution and liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default under 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.
"Holder" means a Person in whose name a Preferred Security is
registered in the Securities Register; 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 Preferred Guarantee Trustee or any Affiliate of the
Guarantor or the Preferred Guarantee Trustee.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of _________,
1998, as amended or supplemented from time to time, between Nationwide Financial
Services, Inc. and Wilmington Trust Company, as trustee thereunder.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders of more
than 50% of the aggregate liquidation amount of all then outstanding Preferred
Securities issued by the Issuer.
"Officers' Certificate" means a certificate signed by the Chairman, the
President, or any Senior or Executive Vice President and the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Guarantor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Guarantee Trustee" means Wilmington Trust Company, as
trustee hereunder, until a Successor Preferred Guarantee Trustee (as defined
below) has been appointed and has
-3-
8
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 Vice President, any Assistant Vice President, any Trust Officer or
Assistant Trust Officer or any other officer of Corporate Trust Administration
of the 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.
"Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. 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 2.02. List of Holders.
(a) The Guarantor shall provide the Preferred Guarantee Trustee (i)
within 14 days after each record date for the payment of Distributions (as
defined in the Declaration), 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") as of a date; 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, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is
-4-
9
given to the Preferred Guarantee Trustee. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.03. Reports by the Preferred Guarantee Trustee. Within 60
days after May 15 of each year, the Preferred 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 Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred 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 and
manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with such 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 to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.06. Events of Default; Waiver.
(a) An Event of Default means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee;
provided, that except with respect to a default resulting from a failure to pay
any Guarantee Payment, the Guarantor shall have received notice of such default
and shall not have cured such default within 60 days after receipt of such
notice.
(b) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of 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 Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
SECTION 2.07. 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, notices of all Events of Default actually known to the
Preferred Guarantee Trustee, unless such defaults have been
-5-
10
cured before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Preferred 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 Preferred Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(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, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.08. Conflicting Interests. The Declaration shall be deemed to
be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
PREFERRED GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.04(iv) or to
a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee
upon acceptance by such Successor Preferred 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 Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders.
(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 and is continuing (and has not been cured
or waived pursuant to Section 2.06), 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 in the conduct of his or her own affairs.
-6-
11
(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 or of the Trust
Indenture Act 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 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 reasonable indemnity against such risk or liability is not
reasonably assured to it.
-7-
12
SECTION 3.02. Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(i) The Preferred 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 believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any request, direction, order, demand or act of the
Guarantor contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate unless otherwise
prescribed herein.
(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 to take 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
rely upon an Officers' Certificate which, upon receipt of such request
from the Preferred Guarantee Trustee, 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 legal
counsel of its choice or other experts, and the advice of such experts
within the scope of such expert's area of expertise or Opinion of
Counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in accordance
with such advice or opinion. Such legal counsel may be legal counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The 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 reasonable indemnity as would satisfy a
reasonable person in the position of the Preferred 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; provided that, nothing contained in this Section
3.02(a)(v) shall be taken to relieve the Preferred Guarantee Trustee,
upon the occurrence of an Event of
-8-
13
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 its agents or attorneys, and the Preferred
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.
(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 (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.
(xi) The Preferred Guarantee Trustee shall not be liable for
any action taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers conferred upon
it by the Subordinated Indenture.
(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 to act in
accordance with such power and authority.
SECTION 3.03. 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,
-9-
14
and the Preferred Guarantee Trustee does not assume any responsibility for their
correctness. The Preferred Guarantee Trustee makes no representations as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.01. Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least fifty million U.S. dollars ($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 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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(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. In determining whether the Preferred Guarantee Trustee has a "conflicting
interest" within the meaning of Section 310(b)(1) of the Trust Indenture Act,
the provisions contained in the proviso to Section 310(b)(1) of the Trust
Indenture Act and the Preferred Guarantee Trustee's Statement of Eligibility on
Form T-1 shall be deemed incorporated herein.
SECTION 4.02. Appointment, Removal and Resignation of the Preferred
Guarantee Trustee.
(a) Subject to Section 4.02(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 until a new,
eligible Preferred Guarantee Trustee has been appointed (a "Successor Preferred
Guarantee Trustee") and has accepted such appointment and assumed the applicable
obligations hereunder by written
-10-
15
instrument executed by such Successor Preferred Guarantee Trustee and delivered
to the Guarantor.
(c) 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 4.02 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition, at the expense of the
Guarantor, 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
registration of the Preferred Guarantee Trustee pursuant to this Section 4.02,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
and owing to the Preferred Guarantee Trustee on the date of such termination,
removal or registration.
(g) The Preferred Guarantee Trustee may engage in any merger,
conversation, consolidation or sale of all or substantially all of its corporate
trust business, provided that the Successor Preferred Guarantee Trustee shall be
otherwise qualified and eligible under this Capital Securities Guarantee
Agreement.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders of the Outstanding Preferred Securities the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer pursuant to the Declaration or by the Guarantor pursuant to
the Indenture), as and when due, regardless of any defense, right of set-off or
counterclaim which 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 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Preferred Securities Guarantee and of any liability
to which it applies or may
-11-
16
apply, presentment, demand for payment, any right to require a proceeding first
against the Preferred Guarantee Trustee, 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.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the 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 (other than an extension of time for payment of
Distributions that results from an Extension Period on the Debentures as so
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 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 detect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) to the extent permitted by law, 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 5.03 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 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Preferred Securities Guarantee will be deposited with the
Preferred Guarantee Trustee to be held
-12-
17
for the benefit of the Holders; (ii) the Preferred Guarantee Trustee has the
right to enforce this Preferred Securities 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 Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercise or direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee; and (iv) any Holder 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 Preferred Guarantee Trustee, the Issuer or any other Person.
SECTION 5.05. Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection (i.e., the guaranteed party
may institute a legal proceeding directly against the Guarantor to enforce its
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against any other person or entity). This Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not previously paid or upon Distribution to the Holders of
the Preferred Securities of the corresponding series of Debentures as provided
in the Declaration.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Preferred Securities Guarantee and shall
have the right to waive payment by the Issuer pursuant to Section 5.01;
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 Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.07. 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 5.03
hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitations of Transactions. So long as any Preferred
Securities remain outstanding, if there shall have occurred an Event of Default,
an event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Indenture or an exercise by the
Guarantor of its right to defer payment of interest as provided in the Indenture
and such deferral period, or any extension thereof, shall be continuing, then
(a) the Guarantor
-13-
18
shall not declare or pay any dividend on, or make any distribution with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than stock dividends paid by the Guarantor which
stock dividends consist of the stock of the same class as that on which the
dividend is being paid), (b) the Guarantor shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Guarantor which rank pari passu with or junior to
the Debentures and (c) shall not make any guarantee payments with respect to the
foregoing (other than pursuant to this Preferred Securities Guarantee).
SECTION 6.02. Ranking. This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, except any liabilities that may be made pari passu or junior
expressly 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 or preferred security of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Preferred Securities Guarantee shall
terminate and be of no further force and effect upon full payment of the
Redemption Price or Liquidation Distribution for the Preferred Securities or
upon Distribution of the Debentures to the Holders of the Preferred Securities.
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 the Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. 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.
-14-
19
(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 8.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person 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 such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
(c) The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of the Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. 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. The Guarantor may not consolidate with or merge with or into, or
sell, convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person unless permitted under Article Eight of the
Indenture. In connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture the Person
formed by or surviving such consolidation or merger or to which such sale,
conveyance, transfer or lease shall
-15-
20
have been made, if other than the Guarantor, shall expressly assume all of the
obligations of the Guarantor hereunder and under the Declaration.
SECTION 9.02. 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 consent of the Holders will be required), this Preferred Securities
Guarantee may only be amended with the prior approval of the Holders of a
Majority in liquidation amount of the Preferred Securities (excluding any
Preferred Securities held by the Guarantor or an Affiliate thereof). The
provisions of Article VI of the Declaration concerning meetings of the Holders
shall apply to the giving of such approval.
SECTION 9.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing and delivered,
telecopied or mailed by first class mail, postage prepaid, as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
Nationwide Financial Services, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
(b) if given to the Issuer, in care of the Preferred Guarantee
Trustee, at the Issuer's (and the Preferred Guarantee Trustee's)
address set forth below or such other address as the Preferred
Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Nationwide Financial Services Capital Trust II
c/o Nationwide Financial Services, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
with a copy to:
Wilmington Trust Company
Xxxxxx Square North, 0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth in the
Securities Register.
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
-16-
21
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 9.04. Benefit. This Preferred Securities Guarantee is solely
for the benefit of the Holders and is not separately transferable from the
Preferred Securities.
SECTION 9.05. Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW 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 PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NATIONWIDE FINANCIAL SERVICES
CAPITAL TRUST II
as Guarantor
By:
-----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
as Preferred Guarantee Trustee
By:
-----------------------------------
Name:
Title:
-17-
