Exhibit 10.4
GUARANTEE
GUARANTEE dated as of this 22nd day of August, 2002, by TELEPHONE
AND DATA SYSTEMS, INC., a Delaware corporation (with its successors,
"Guarantor"), for the benefit of CREDIT SUISSE FIRST BOSTON INTERNATIONAL (with
its successors and assigns, "Beneficiary") and with Credit Suisse First Boston
Corporation acting as agent ("Agent").
WHEREAS, TDSI Corporation, a Delaware corporation (with its
successors, "Obligor"), is a 100%-owned subsidiary of Guarantor; and
WHEREAS, Obligor has entered into the SAILS Mandatorily Exchangeable
Securities Contract dated as of the date hereof, among Obligor, Agent and
Beneficiary (the "Securities Contract") pursuant to which Obligor and
Beneficiary agree to sell and purchase ordinary shares, no par value, of
Deutsche Telekom AG, a German stock corporation (the "Issuer"), or security
entitlements in respect thereof (the "Ordinary Shares") at the time and on the
terms set forth therein; and
WHEREAS, pursuant to the SAILS Pledge Agreement dated as of the date
hereof among Obligor, Beneficiary and Agent (the "Pledge Agreement"), Obligor
has granted to Beneficiary, as of the date hereof, a security interest in
certain Ordinary Shares to secure the obligations of Obligor under the
Securities Contract;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor agrees as follows:
Article 1
GUARANTEE
Section 1.01. Guarantee. (a) Guarantor hereby absolutely,
irrevocably and unconditionally guarantees the punctual payment when due of the
obligations of Obligor (the "Obligations") under the Securities Contract and the
Pledge Agreement, each as may be further modified, amended or supplemented from
time to time (collectively, the "Agreements"). Guarantor's obligations under
this Guarantee shall be subject to Obligor's defenses and rights to set-off,
counterclaim or withhold payment as provided in the Agreements. Guarantor agrees
to pay on demand any and all fees, funding and other costs and expenses
(including reasonable attorney's fees and expenses) incurred by Beneficiary in
connection with enforcing any rights or collecting any amounts or deliveries
under the Agreements. Any amounts or deliveries that would be owed or due by
Obligor to Beneficiary under the Agreements but are unenforceable or not
allowable against Obligor because Obligor is the subject of a bankruptcy,
liquidation, reorganization or similar case or proceeding, shall nonetheless be
deemed owed or due for the purposes of this 0. Beneficiary shall not be
obligated to file any claim relating to the Obligations in the event Obligor
becomes subject to a bankruptcy, liquidation, reorganization or similar case or
proceeding, and the failure by Beneficiary to so file shall not affect
Guarantor's obligations hereunder.
(b) This 0 is a guarantee of payment when due and not of collection.
Guarantor agrees that Beneficiary may resort to Guarantor for payment of any of
the Obligations, whether or not Beneficiary shall have realized against or
applied, or attempted (except as provided below) to realize against or apply,
any property provided by an entity as collateral security or other credit
support for the Obligations (such property and credit support collectively,
"Security") or proceeded or attempted to proceed against Obligor or any other
entity principally or secondarily obligated with respect to the Obligations.
(c) Guarantor's obligations under this 0 shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned by Beneficiary
upon or as a result of the insolvency, bankruptcy, liquidation or reorganization
of Obligor or otherwise, all as though such payment has not been made.
(d) Notwithstanding the foregoing, Beneficiary agrees that it will
not make a demand or claim under this Guarantee in respect of any Secured
Portion of the Obligations unless Beneficiary has first used commercially
reasonable efforts, for at least five Business Days, to realize against or apply
property held as Collateral (as defined in the Pledge Agreement) under the
Pledge Agreement in satisfaction of the Obligations. "Secured Portion" means, at
any time, a portion of the Obligations consisting of the obligation to deliver
cash or property with a value, as determined by the Calculation Agent (as
defined in the Securities Contract), equal to the value, as determined by the
Calculation Agent in a consistent manner, of the Collateral then pledged to the
Beneficiary under the Pledge Agreement.
Section 1.02. Guarantee Absolute. Guarantor guarantees that the
Obligations will be paid strictly in accordance with the provisions of the
Agreements (and, to the extent applicable, this 0), regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such provisions or the rights of Beneficiary with respect thereto. The
liability of Guarantor under this 0 shall be irrevocable, absolute and
unconditional irrespective of, and Guarantor hereby irrevocably waives, any
defenses it may now or hereafter have (including any defense based on the
failure to provide notice to or obtain the consent of Guarantor) in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of the Agreements;
(b) the entry into additional transactions, any indulgence,
concession, waiver or consent given to Obligor, or any other changes in the
amount of, time, manner or place of payment of, or in any other term of any or
all of the Obligations;
(c) any taking, exchange, release, non-perfection, realization or
application of or on any Security;
(d) any change, restructuring or termination in or of the structure
or existence of Obligor; or
(e) any other circumstances (including, without limitation, any
statute of limitations) that might otherwise constitute a defense available to,
or a discharge of, Guarantor or Obligor.
Section 1.03. Waivers and Acknowledgments. (a) Guarantor hereby
waives promptness, diligence, demand for performance, notice of acceptance,
presentment, protest, non-performance, default, acceleration, early termination,
protest or dishonor, any other notice with respect to any of the Obligations and
this 0, and, except as provided in Section 1.01(d), any requirement that
Beneficiary protect, secure, perfect or insure any Security or exhaust any right
or take any action against Guarantor or any other entity or any Security.
(b) Guarantor hereby waives any right to revoke this guarantee, and
acknowledges that its obligations under this 0 are continuing in nature and
apply to all Obligations, whether existing now or in the future.
(c) Guarantor hereby waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by Beneficiary that in any
manner impairs, reduces, releases or otherwise adversely affects Guarantor's
subrogation, reimbursement, exoneration, contribution or indemnification rights
or other rights to proceed against Obligor, any other guarantor, any other
entity or any Security, and (ii) except as provided in Section 1.01, any defense
based on any right of set-off or counterclaim against or in respect of
Guarantor's obligations under this 0.
Section 1.04. Subrogation. Guarantor will not exercise any rights
that it may now have or hereafter acquire against Obligor or any other guarantor
that arise from the existence, payment, performance or enforcement of
Guarantor's obligations under this 0, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of Beneficiary against Obligor,
any other guarantor or any security, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from Obligor or any other guarantor,
directly or
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indirectly, in cash or other property, by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations shall have been finally and irrevocably satisfied in
full. If any amount shall be paid to Guarantor in violation of the preceding
sentence at any time prior to the final and irrevocable payment or performance
in full of all of the Obligations, such amount shall be held in trust for the
benefit of Beneficiary and shall forthwith be paid to Beneficiary to be (at the
election of Beneficiary) credited and applied to the Obligations, whether
matured or unmatured, in accordance with the terms of the Agreements, and/or to
be held as collateral security for any Obligations thereafter arising.
Article 2
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties. Guarantor represents
and warrants to Beneficiary that:
(a) The representations and warranties made by Obligor under the
Agreements are true and correct.
(b) Guarantor is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.
(c) The execution and delivery of this Guarantee and the performance
by Guarantor of its obligations hereunder do not violate or conflict with any
provision of the certificate of incorporation or bylaws of Guarantor, any law
applicable to Guarantor, any order or judgment of any court or other agency of
government applicable to Guarantor or any of Guarantor's assets or any
contractual restriction binding on or affecting Guarantor or any of Guarantor's
assets.
(d) All government and other consents that are required to have been
obtained by Guarantor with respect to this Guarantee have been obtained and are
in full force and effect and all conditions of any such consents have been
complied with. Guarantor has complied and will comply with all applicable
disclosure or reporting requirements in respect of the transactions contemplated
by the Agreements, including without limitation any requirements imposed by
Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended, or
the rules and regulations thereunder.
(e) Guarantor has the requisite corporate power and authority to
enter into and perform this Guarantee. The execution, delivery and performance
by Guarantor of this Guarantee have been duly authorized by all necessary
corporate action. This Guarantee has been duly executed and delivered by
Guarantor. Guarantor's obligations under this Guarantee constitute Guarantor's
legal, valid and binding obligations enforceable in accordance with its terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).
(f) No Acceleration Event (as such term is defined in the Securities
Contract) or event that, with the giving of notice or the lapse of time or both,
would constitute an Acceleration Event has occurred and is continuing and no
such event would occur as a result of Guarantor's entering into or performing
Guarantor's obligations under this Guarantee.
(g) There is not pending or, to Guarantor's knowledge, threatened
against Guarantor or any of its affiliates any action, suit or proceeding at law
or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator (including without limitation any bankruptcy,
insolvency or similar proceeding) that is likely to affect the legality,
validity or enforceability against Guarantor of this Guarantee or Guarantor's
legal right to perform its obligations under this Guarantee.
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(h) Guarantor is not, nor has Guarantor been, at any time in the
preceding three months, an "affiliate", within the meaning of Rule 144 under the
Securities Act, of the Issuer. Guarantor is not, on the date of this Agreement,
in possession of any material non-public information regarding the Issuer.
(i) Guarantor is not and, after giving effect to the transactions
contemplated hereby, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(j) Guarantor is acting for its own account, and has made its own
independent decision to enter into this Guarantee and as to whether this
Guarantee is appropriate or proper for Guarantor based upon its own judgment and
upon advice of such advisors as Guarantor deems necessary. Guarantor
acknowledges and agrees that Guarantor is not relying, and has not relied, upon
any communication (written or oral) of Beneficiary or any affiliate, employee or
agent of Beneficiary with respect to the legal, accounting, tax or other
implications of this Guarantee and that each of Seller and Guarantor has
conducted its own analyses of the legal, accounting, tax and other implications
hereof and thereof; it being understood that information and explanations
related to the terms and conditions of this Guarantee shall not be considered
investment advice or a recommendation to enter into this Guarantee. Guarantor is
entering into this Guarantee with a full understanding of all of the terms and
risks hereof (economic and otherwise) and is capable of evaluating and
understanding (on Guarantor's own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks. Guarantor
is also capable of assuming (financially and otherwise), and assumes, those
risks. Guarantor acknowledges that neither Beneficiary nor any affiliate,
employee or agent of Beneficiary is acting as a fiduciary for or an advisor to
Guarantor in respect of this Guarantee.
Article 3
COVENANTS
Section 3.01. Taxes. Guarantor shall pay any and all documentary,
stamp, transfer or similar taxes and charges that may be payable in respect of
the entry into this Guarantee. Guarantor further agrees to make all payments in
respect of this Guarantee free and clear of, and without withholding or
deduction for or on account of, any present or future taxes, duties, fines,
penalties, assessments or other governmental charges of whatsoever nature (or
interest on any taxes, duties, fines, penalties, assessments or other
governmental charges of whatsoever nature) ("Tax") imposed, levied, collected,
withheld or assessed by, within or on behalf of the United States or any
political subdivision or governmental authority thereof or therein having power
to tax or any jurisdiction from or through which payment pursuant to this
Guarantee is made by Guarantor, or any political subdivision or governmental
authority thereof or therein having power to tax, provided that this sentence
shall not apply to any such Tax that would not be imposed in respect of a
payment under this Guarantee but for a present or former connection between the
jurisdiction of the government or taxation authority imposing such Tax and
Beneficiary or a person related to Beneficiary (including, without limitation, a
connection arising from Beneficiary or such related person being or having been
a citizen or resident of such jurisdiction, or being or having been organized,
present or engaged in a trade or business in such jurisdiction, or having or
having had a permanent establishment or fixed place of business in such
jurisdiction, but excluding a connection arising solely from Beneficiary or such
related person having executed, delivered, performed its obligation or received
a payment under, or enforced, this Guarantee. In the event such withholding or
deduction is imposed, Guarantor agrees to indemnify Beneficiary for the full
amount of such withholding or deduction, as well as any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
provided that Beneficiary has provided to Guarantor a duly executed and
completed Internal Revenue Service Form W-8BEN (with respect to the benefits of
an income tax treaty) (i) upon execution of this Guarantee, with such form to be
updated at the beginning of each succeeding three calendar year period beginning
after the execution of this Guarantee, or as otherwise required under then
applicable Treasury Regulations; (ii) promptly upon reasonable demand by
Guarantor; and (iii) promptly upon learning that any form previously provided
has become obsolete or incorrect.
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Section 3.02. Actions That Could Cause Guarantor to Become an
Affiliate. Guarantor shall notify Beneficiary immediately of its intention to
(i) purchase Ordinary Shares, American Depositary Shares (evidenced by American
Depositary Receipts), each representing one Ordinary Share, or any other equity
security of the Issuer in an amount that would cause Guarantor to become the
beneficial owner, directly or indirectly, of more than three percent of the
outstanding shares of any equity security of the Issuer, (ii) permit any of its
officers or directors to accept a position as an officer or director of the
Issuer, (iii) take any action that would cause Guarantor to possess, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the Issuer, whether by ownership of voting securities, by contract
or otherwise or (iv) take any other action that could reasonably be expected to
result in Guarantor's becoming an "affiliate", within the meaning of Rule 144
under the Securities Act, of the Issuer. Guarantor shall not take any such
action unless a period of fifteen Business Days shall have elapsed after receipt
of such notice by Beneficiary and Beneficiary shall not have objected in writing
to such action during such period.
Article 4
MISCELLANEOUS
Section 4.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard forms of telecommunication. Notices to
Beneficiary shall be directed to it care of Credit Suisse First Boston
Corporation, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy No.:
(000) 000-0000, Attention: Xxxxxxx Xxxxxxxx and notices to Guarantor shall be
directed to Guarantor at 00 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000-0000, Attention: Treasurer, Telephone No.: (000) 000-0000, Telecopy No.:
(000) 000-0000, with a copy to Sidley Xxxxxx Xxxxx & Xxxx, Bank Xxx Xxxxx, 00 X.
Xxxxxxxx, Xxxxxxx, XX 00000, Attention: Xxxxxxx XxXxxxx, Telephone No.: (312)
000-0000, Telecopy No.: (000) 000-0000.
Section 4.02. Governing Law; Submission to Jurisdiction;
Severability; Waiver of Jury Trial; Service of Process. (a) This Guarantee shall
be governed by and construed in accordance with the laws of the State of New
York without reference to choice of law doctrine and each party hereto submits
to the jurisdiction of the Courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City.
(b) To the extent permitted by law, the unenforceability or
invalidity of any provision or provisions of this Guarantee shall not render any
other provision or provisions herein contained unenforceable or invalid.
(c) Guarantor and Beneficiary hereby irrevocably and unconditionally
waive any and all right to trial by jury in any legal proceeding arising out of
or related to this Guarantee.
(d) The parties irrevocably consent to service of process given in
the manner provided for notices in Section 4.01. Nothing in this Guarantee will
affect the right of either party to serve process in any other manner permitted
by law.
Section 4.03. Matters Related to Credit Suisse First Boston
Corporation, as Agent. The rights and obligations of the Agent shall be as set
forth in Section 9.09 of the Securities Contract.
Section 4.04. Amendments, Waivers. Any provision of this Guarantee
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of any amendment, by Beneficiary and Guarantor and in
the case of any waiver, by Beneficiary. No failure or delay by Beneficiary in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
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Section 4.05. No Third Party Rights, Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Guarantor, Beneficiary and their respective successors and
assigns and no other person shall assert any rights as third party beneficiary
hereunder. Whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party. All the
covenants and agreements herein contained by or on behalf of Guarantor and
Beneficiary shall bind, and inure to the benefit of, their respective successors
and assigns whether so expressed or not, and shall be enforceable by and inure
to the benefit of Beneficiary and its successors and assigns. The rights and
duties of Guarantor under this Guarantee may not be assigned or transferred by
any party hereto without the prior written consent of Beneficiary. Beneficiary
may assign or transfer any of its rights or duties hereunder without the prior
written consent of Guarantor.
Section 4.06. Counterparts. This Guarantee may be executed in any
number of counterparts, and all such counterparts taken together shall be deemed
to constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have signed this Guarantee as of the
date and year first above written.
GUARANTOR:
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ XxXxx X. Xxxxxxx, Xx.
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Name: XxXxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
BENEFICIARY:
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
Legal and Compliance Department
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Director
Legal and Compliance Department
AGENT:
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Managing Director
