EXHIBIT 10.3
GUARANTEE AGREEMENT
XXXXXXXX (U.S.A.), INC.
Dated as of May 22, 2003
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation...................................1
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee.......................4
SECTION 2.2 Certain Rights of the Guarantee Trustee..........................5
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee............7
SECTION 2.4 Events of Default; Waiver........................................7
SECTION 2.5 Events of Default; Notice........................................8
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1 The Guarantee Trustee; Eligibility...............................8
SECTION 3.2 Appointment, Removal and Resignation of the Guarantee Trustee....9
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee........................................................9
SECTION 4.2 Waiver of Notice and Demand.....................................10
SECTION 4.3 Obligations Not Affected........................................10
SECTION 4.4 Rights of Holders...............................................11
SECTION 4.5 Guarantee of Payment............................................11
SECTION 4.6 Subrogation.....................................................11
SECTION 4.7 Independent Obligations.........................................12
SECTION 4.8 Enforcement.....................................................12
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions......................................12
SECTION 5.2 Ranking.........................................................13
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ARTICLE VI
TERMINATION
SECTION 6.1 Termination.....................................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation.....................................................13
SECTION 7.2 Indemnification.................................................14
SECTION 7.3 Compensation; Reimbursement of Expenses.........................15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns..........................................15
SECTION 8.2 Amendments......................................................16
SECTION 8.3 Notices.........................................................16
SECTION 8.4 Benefit.........................................................17
SECTION 8.5 Governing Law...................................................17
SECTION 8.6 Counterparts....................................................17
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GUARANTEE AGREEMENT
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This GUARANTEE AGREEMENT (the "Guarantee"), dated as of May 22, 2003, is
executed and delivered by Xxxxxxxx (U.S.A.), Inc., an insurance holding
company incorporated in Oklahoma (the "Guarantor"), and Wilmington Trust
Company, a Delaware banking corporation, as trustee (the "Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Capital Securities (as defined herein) of Xxxxxxxx Capital Trust I, a Delaware
statutory trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of May 22, 2003, among the trustees named therein of
the Issuer, Xxxxxxxx (U.S.A.), Inc., as sponsor, and the Holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof securities, having an aggregate liquidation
amount of $13,000,000, designated in the Declaration as InCapS(SM) (the
"Capital Securities"); and
WHEREAS, as incentive for the Holders to purchase the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of Capital Securities the
Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
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In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this 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 Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise specified;
(e) terms defined in the Declaration as of the date of execution of
this Guarantee have the same meanings when used in this Guarantee, unless
otherwise defined in this Guarantee or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice versa.
"Beneficiaries" means any Person to whom the Issuer is or hereafter
becomes indebted or liable.
"Common Securities" has the meaning specified in the Declaration.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of the execution of this Guarantee shall be Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000.
"Covered Person" means any Holder of Capital Securities.
"Debenture Issuer" means Xxxxxxxx (U.S.A.), Inc. or any successor entity
resulting from any consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Debentures.
"Debentures" means the junior subordinated debentures of the Debenture
Issuer that are designated in the Indenture as the "Fixed Rate Junior
Subordinated Debt Securities due 2033" and held by the Institutional Trustee
(as defined in the Declaration) of the Issuer.
"Event of Default" has the meaning set forth in Section 2.4.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) which are required to be paid on such Capital
Securities to the extent the Issuer has funds available in the Property
Account (as defined in the Declaration) therefor at such time, (ii) the price
payable upon the redemption of any Capital Securities to the extent the Issuer
has funds available in the Property Account therefor at such time, with
respect to any Capital Securities that are (1) called for redemption by the
Issuer or (2) mandatorily redeemed by the Issuer, in each case, in accordance
with the terms of such Capital Securities, and (iii) upon a voluntary or
involuntary liquidation, dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to the Holders
of the Capital Securities in exchange therefor as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount of the Capital
Securities and all accrued and unpaid Distributions on the Capital Securities
to the date of payment, to the extent the Issuer has funds available in the
Property Account therefor at such time, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer as required
by applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" means any Person in whose name any Capital Securities are
registered on the books and records of the Issuer; PROVIDED, HOWEVER, that, in
determining whether the
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holders of the requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee (including in its
individual capacity), any Affiliate of the Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture, dated as of May 22, 2003, between the
Debenture Issuer and Wilmington Trust Company, not in its individual capacity
but solely as trustee, and any indenture supplemental thereto pursuant to
which the Debentures are to be issued to the Institutional Trustee of the
Issuer.
"Liquidation Distribution" has the meaning set forth in the definition of
"Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the amount that would be paid upon the
redemption, liquidation or otherwise on the date upon which the voting
percentages are determined, plus unpaid Distributions accrued thereon to such
date) of all Capital Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but not including
liabilities related to taxes) of the Issuer, other than obligations of the
Issuer to pay to holders of any Trust Securities the amounts due such holders
pursuant to the terms of the Trust Securities.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by one Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee shall include:
(a) a statement that such officer signing the Officer's 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 such officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
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"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee with direct
responsibility for the administration of any matters relating to this
Guarantee, including any vice president, any assistant vice president, any
secretary, any assistant secretary, the treasurer, any assistant treasurer,
any trust officer or other officer of the Corporate Trust Office 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.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.
"Trust Securities" means the Common Securities and the Capital Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee.
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(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Capital Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder of Capital
Securities exercising his or her rights pursuant to Section 4.4 (b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee
of its appointment to act as Successor Guarantee Trustee. The right, title
and interest of the Guarantee Trustee shall automatically vest in any
Successor Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Capital
Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.4(b)) and is
actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this 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 Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct or bad faith, except
that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Guarantee,
and no implied covenants or obligations shall be read into this Guarantee
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee; but in the case of any
such certificates or opinions furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine
whether or not on their face they conform to the requirements of this
Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that such Responsible Officer of the Guarantee
Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
written direction of the Holders of a Majority in liquidation amount of the
Capital Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee;
and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds is not reasonably assured to it
under the terms of this Guarantee, or security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 2.2 Certain Rights of the Guarantee Trustee.
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(a) Subject to the provisions of Section 2.1:
(i) The 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.
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(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by an Officer's Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officer's Certificate of the Guarantor which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument or other writing (or any
rerecording, refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel of its selection,
and the 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 Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the 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 Guarantee Trustee; provided, however, that nothing contained
in this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The 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 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.
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(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the signature
of the 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 Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Guarantee the Guarantee
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders of a Majority
in liquidation amount of the Capital Securities, (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 conclusively relying
on or acting in accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers conferred
upon it by this Guarantee.
(b) No provision of this Guarantee shall be deemed to impose any duty
or obligation on the Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty.
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee.
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The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representation as to
the validity or sufficiency of this Guarantee.
SECTION 2.4 Events of Default; Waiver.
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(a) An "Event of Default" under this Guarantee will occur upon the
failure of the Guarantor to perform any of its payment or other obligations
hereunder.
(b) The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of
all of the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
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SECTION 2.5 Events of Default; Notice.
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(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Capital Securities, notices of all Events of Default actually
known to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, however, that the
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of
the Capital Securities.
(b) The Guarantee Trustee shall not be charged with knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice thereof from the Guarantor or a Holder of the Capital Securities, or a
Responsible Officer of the Guarantee Trustee charged with the administration
of this Guarantee shall have actual knowledge thereof.
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1 The Guarantee Trustee; Eligibility.
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(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or national association organized and doing
business under the laws of the United States of America or any state
thereof or of the District of Columbia, or Person 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 or District of Columbia
authority. If such corporation or national association 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 3.1(a)(ii), the combined capital and surplus of
such corporation or national association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 3.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set forth in Section 3.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign to the extent
and in the manner provided by, and subject to, this Guarantee.
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SECTION 3.2 Appointment, Removal and Resignation of the Guarantee Trustee.
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(a) Subject to Section 3.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor except during an Event
of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 3.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal
or resignation. The Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction
for appointment of a Successor Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay to
the Guarantee Trustee all amounts owing to the Guarantee Trustee under
Sections 7.2 and 7.3 accrued to the date of such termination, removal or
resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee.
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(a) 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
(except defense of payment by the Issuer), 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.
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(b) The Guarantor hereby also agrees to assume any and all Obligations
of the Issuer and in the event any such Obligation is not so assumed, subject
to the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the full payment, when and as
due, of any and all Obligations to such Beneficiaries. This Guarantee is
intended to be for the Beneficiaries who have received notice hereof.
SECTION 4.2 Waiver of Notice and Demand.
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The Guarantor hereby waives notice of acceptance of this 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.
SECTION 4.3 Obligations Not Affected.
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The obligations, covenants, agreements and duties of the Guarantor under
this 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 Capital 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, the price payable upon the redemption of the
Capital Securities, the Liquidation Distribution or any other sums payable
under the terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Capital Securities (other than an extension of time for the payment
of the Distributions, the price payable upon the redemption of the Capital
Securities, the Liquidation Distribution or other sums payable that results
from the extension of any interest payment period on the Debentures);
(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 Capital
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 Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
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(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 4.4 Rights of Holders.
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(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
this Guarantee or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under this Guarantee; provided, however, that (subject
to Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee shall determine
that the actions so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Guarantee Trustee being advised by
legal counsel determines that the action or proceeding so directed may not
lawfully be taken or if the Guarantee Trustee in good faith by its board of
directors or trustees, executive committee or a trust committee of directors
or trustees and/or Responsible Officers shall determine that the action or
proceeding so directed would involve the Guarantee Trustee in personal
liability.
(b) Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee, without first instituting a legal proceeding against the
Issuer, the Guarantee Trustee or any other Person. The Guarantor waives any
right or remedy to require that any such action be brought first against the
Issuer, the Guarantee Trustee or any other Person before so proceeding directly
against the Guarantor.
SECTION 4.5 Guarantee of Payment.
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This Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6 Subrogation.
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The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by applicable
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 Guarantee, if, after
giving effect to any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
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SECTION 4.7 Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Capital Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding
the occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 4.3 hereof.
SECTION 4.8 Enforcement.
-----------
A Beneficiary may enforce the Obligations of the Guarantor contained in
Section 4.1(b) directly against the Guarantor, and the Guarantor waives any
right or remedy to require that any action be brought against the Issuer or
any other person or entity before proceeding against the Guarantor.
The Guarantor shall be subrogated to all rights (if any) of any
Beneficiary against the Issuer in respect of any amounts paid to the
Beneficiaries by the Guarantor under this Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by applicable
provisions of law) be entitled to enforce or exercise any rights 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 Guarantee, if, after
giving effect to such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Beneficiaries and to pay over such amount to the Beneficiaries.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions.
--------------------------
So long as any Capital Securities remain outstanding, if (a) there shall
have occurred and be continuing an Event of Default or (b) Debenture Issuer
shall have selected an Extension Period as provided in the Indenture and such
period, or any extension thereof, shall have commenced and be continuing, then
the Guarantor may not (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor's capital stock or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor that rank in all respects PARI PASSU with or junior
in interest to the Debentures or (z) make any payment under any guarantees of
the Guarantor that rank in all respects PARI PASSU with or junior in interest
to this Guarantee (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor (A) in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors, or consultants, (B)
in connection with a dividend reinvestment or stockholder stock purchase plan
or (C) in connection with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital stock), as
consideration in an acquisition transaction entered into prior to the
occurrence of the Event of Default or the
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applicable Extension Period, (ii) as a result of any exchange or conversion of
any class or series of the Guarantor's capital stock (or any capital stock of
a subsidiary of the Guarantor) for any class or series of the Guarantor's
capital stock or of any class or series of the Guarantor's indebtedness for
any class or series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (iv) any declaration of a dividend in connection
with any stockholder's rights plan, or the issuance of rights, stock or other
property under any stockholder's rights plan, or the redemption or repurchase
of rights pursuant thereto, or (v) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that
on which the dividend is being paid or ranks PARI PASSU with or junior in
interest to such stock).
SECTION 5.2 Ranking.
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This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By
their acceptance thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Guarantee and the other terms set forth herein.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination.
------------
This Guarantee shall terminate as to the Capital Securities (i) upon full
payment of the price payable upon redemption of all Capital Securities then
outstanding, (ii) upon the distribution of all of the Debentures to the
Holders of all of the Capital Securities or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon dissolution of the
Issuer. This Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder of Capital Securities must
restore payment of any sums paid under the Capital Securities or under this
Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 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 of such Indemnified
Person in good faith in accordance with this 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 Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim
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incurred by reason of such Indemnified Person's negligence, willful misconduct
or bad faith 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 Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or 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, if selected by such Indemnified Person, has been selected with reasonable
care by such Indemnified Person, 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 Capital Securities might properly be
paid.
SECTION 7.2 Indemnification.
---------------
(a) The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence, willful
misconduct or bad faith on the part of the Indemnified Person, arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder, including but not limited to the costs and expenses (including
reasonable legal fees and expenses) of the Indemnified Person defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of the Indemnified Person's powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the resignation or removal of the Guarantee Trustee and the termination
of this Guarantee.
(b) Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such Indemnified
Person will, if a claim in respect thereof is to be made against the Guarantor
under this Section 7.2, notify the Guarantor in writing of the commencement
thereof; but the failure so to notify the Guarantor (i) will not relieve the
Guarantor from liability under paragraph (a) above unless and to the extent
that the Guarantor did not otherwise learn of such action and such failure
results in the forfeiture by the Guarantor of substantial rights and defenses
and (ii) will not, in any event, relieve the Guarantor from any obligations to
any Indemnified Person other than the indemnification obligation provided in
paragraph (a) above. The Guarantor shall be entitled to appoint counsel of
the Guarantor's choice at the Guarantor's expense to represent the Indemnified
Person in any action for which indemnification is sought (in which case the
Guarantor shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Person or Persons except as set
forth below); provided, however, that such counsel shall be satisfactory to
the Indemnified Person. Notwithstanding the Guarantor's election to appoint
counsel to represent the Indemnified Person in any action, the Indemnified
Person shall have the right to employ separate counsel (including local
counsel), and the Guarantor shall bear the reasonable fees, costs and expenses
of such separate counsel, if (i) the use of counsel chosen by the Guarantor to
represent the Indemnified Person would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person and the Guarantor and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Persons
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which are different from or additional to those available to the Guarantor,
(iii) the Guarantor shall not have employed counsel satisfactory to the
Indemnified Person to represent the Indemnified Person within a reasonable
time after notice of the institution of such action or (iv) the Guarantor
shall authorize the Indemnified Person to employ separate counsel at the
expense of the Guarantor. The Guarantor will not, without the prior written
consent of the Indemnified Persons, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the Indemnified Persons are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each Indemnified Person from
all liability arising out of such claim, action, suit or proceeding.
SECTION 7.3 Compensation; Reimbursement of Expenses.
---------------------------------------
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as the parties shall
agree to from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by it in accordance with any provision of this
Guarantee (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to the negligence, willful misconduct or bad
faith of the Guarantee Trustee.
The provisions of this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor's assets to another entity, in each case to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of
a Majority in liquidation amount of the Capital Securities.
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SECTION 8.2 Amendments.
----------
Except with respect to any changes that do not adversely affect the
powers, preferences, rights or interests of Holders of the Capital Securities
in any material respect (in which case no approval of Holders will be
required), this Guarantee may be amended only with the prior approval of the
Holders of a Majority in liquidation amount of the Capital Securities. The
provisions of the Declaration with respect to amendments thereof shall apply
equally with respect to amendments of the Guarantee.
SECTION 8.3 Notices.
-------
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Capital Securities):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Telephone: 000-000-0000
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities and to the Guarantee Trustee):
Chandler (U.S.A.), Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: R. Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
(c) If given to any Holder of the Capital 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.
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SECTION 8.4 Benefit.
-------
This Guarantee is solely for the benefit of the Holders of the Capital
Securities and, subject to Section 2.1(a), is not separately transferable from
the Capital Securities.
SECTION 8.5 Governing Law.
-------------
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 8.6 Counterparts.
------------
This Guarantee may contain more than one counterpart of the signature page
and this Guarantee may be executed by the affixing of the signature of the
Guarantor and the Guarantee Trustee to any of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of the signers had
signed a single signature page.
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THIS GUARANTEE is executed as of the day and year first above written.
CHANDLER (U.S.A.), INC.,
as Guarantor
By: /s/ Xxxx X. Xxxxx
-----------------------------
Xxxx X. Xxxxx
President
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Financial Services Officer
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