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GUARANTEE AGREEMENT
Tower Automotive, Inc.
and
The First National Bank of Chicago
Relating to the Preferred Securities of
Tower Automotive Capital Trust
Dated as of June 9, 1998
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CROSS REFERENCE TABLE *
SECTION OF TRUST SECTION OF
INDENTURE ACT OF GUARANTEE
1939, AS AMENDED AGREEMENT
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310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1, 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1, 2.6, 5.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(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.
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION . . . . . . . . . . . . . . 4
SECTION 2.2 LIST OF HOLDERS. . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 REPORTS BY THE GUARANTEE TRUSTEE . . . . . . . . . . . . . . 5
SECTION 2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE. . . . . . . . . . . . 5
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT . . . . . . 5
SECTION 2.6 EVENTS OF DEFAULT; WAIVER. . . . . . . . . . . . . . . . . . 5
SECTION 2.7 EVENT OF DEFAULT; NOTICE . . . . . . . . . . . . . . . . . . 5
SECTION 2.8 CONFLICTING INTERESTS. . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE. . . . . . . . . . . . 6
SECTION 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE . . . . . . . . . 6
SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE. . . . . . . . . . . . . 7
SECTION 3.3 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4
GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.1 GUARANTEE TRUSTEE; ELIGIBILITY . . . . . . . . . . . . . . . 9
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE 5
GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 5.1 GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 5.2 WAIVER OF NOTICE AND DEMAND. . . . . . . . . . . . . . . . .11
SECTION 5.3 OBLIGATIONS NOT AFFECTED . . . . . . . . . . . . . . . . . .11
SECTION 5.4 RIGHTS OF HOLDERS. . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.5 GUARANTEE OF PAYMENT . . . . . . . . . . . . . . . . . . . .12
SECTION 5.6 SUBROGATION. . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.7 INDEPENDENT OBLIGATIONS. . . . . . . . . . . . . . . . . . .13
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ARTICLE 6
COVENANTS AND SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 6.1 SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 6.2 CERTAIN COVENANTS OF THE GUARANTOR . . . . . . . . . . . . .13
ARTICLE 7
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 7.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE 8
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 8.1 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . .15
SECTION 8.2 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 8.3 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 8.4 BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 8.5 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 8.6 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . .17
ii
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of June 9, 1998, is executed and
delivered by Tower Automotive, Inc., a Delaware corporation (the
"Guarantor"), and The First National Bank of Chicago, a national banking
association, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Tower Automotive Capital Trust, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 9, 1998, among the Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
5,175,000 of its 6 3/4% Convertible Trust Preferred Securities (liquidation
preference $50 per preferred security) (the "Preferred Securities")
representing preferred 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 issuance of the
Issuer's Common Securities (as defined herein), will be used to purchase the
Debentures (as defined in the Declaration) of the Guarantor which will be
deposited with The First National Bank of Chicago, as Property Trustee under
the Declaration, as trust assets;
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 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 Subordinated Indenture (as defined herein)), has occurred and
is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments (as defined in the Common Securities Guarantee) under the
Common Securities Guarantee shall be subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments (as defined herein) under
this 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 Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
1
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise defined
terms used but not otherwise defined herein shall have the meanings assigned
to such terms in the Declaration as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct common control with
such specified Person, provided, however, that an Affiliate of the Guarantor
shall not be deemed to include the Issuer. 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 securities representing common
beneficial interests in the assets of the Issuer.
"Common Stock" shall mean the Common Stock, par value $0.01 per share,
of the Guarantor.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided,
however, that except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received written notice of default and
shall not have cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by or on behalf of the Issuer: (i) any accumulated and
unpaid Distributions (as defined in the Declaration) required to be paid on
the Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by
the Issuer to the extent the Issuer shall have funds on hand available
therefor, and (iii) upon a voluntary or involuntary dissolution of the
Issuer, unless Debentures are distributed to the Holders, the lesser of (a)
the aggregate of the liquidation preference of $50 per Preferred Security
plus accrued and unpaid Distributions on the Preferred Securities to the date
of payment to the extent the Issuer shall have funds on hand available to
make such payment and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in dissolution of the Issuer (in either
case, the "Stockholder Distribution").
2
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor, the Guarantee Trustee or any
Affiliate of the Guarantor or the Guarantee Trustee.
"List of Holders" has the meaning specified in Section 2.2 (a).
"Majority in Liquidation Preference of the Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the liquidation preference of all
the outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by (i) the Chairman, Chief Executive Officer, President or
a Vice President, and by (ii) the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer assigned to the Trustee's Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and having
3
direct responsibility for the administration of this Guarantee Agreement, and
also, with respect to a particular matter, any other officer, to whom such
matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"Subordinated Indenture" means the Junior Convertible Subordinated
Indenture, dated as of June 9, 1998, as supplemented and amended between the
Guarantor and The First National Bank of Chicago, as trustee.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (unless the Guarantee Trustee is acting as Securities
Registrar with respect to the Debentures under the Subordinated
Indenture) (i) semi-annually, on or before January 15 and July 15 of each
year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as
of a date not more than 15 days prior to the delivery thereof, and (ii)
at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such written
request, a List of Holders as of a date not more than 15 days prior to
the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise
been received by the Guarantee Trustee. Notwithstanding the foregoing,
the Guarantor shall not be obligated to provide such List of Holders at
any time the Preferred Securities are represented by one or more Global
Certificates (as defined in the Subordinated Indenture). The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt
of a new List of Holders.
4
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3 REPORTS BY THE GUARANTEE TRUSTEE. Within 60
days after May 15, 1999 in each calendar year, commencing with May 15, 1999,
the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information, if any,
as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act; and such compliance certificate of the Guarantor shall be delivered on
or before 120 days after the end of each calendar year.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for
in this Guarantee Agreement that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER. The Holders of a
Majority in Liquidation Preference of the 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 Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known
to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, except
in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be fully protected in withholding such notice if
and so long as the Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have actual
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a
5
Responsible Officer charged with the administration of the Declaration
shall have obtained written notice, of such Event of Default.
SECTION 2.8 CONFLICTING INTERESTS. The Declaration and the
Subordinated Indenture shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall
not transfer this Guarantee Agreement to any Person except a Holder
exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically
vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Guarantee Agreement, and no implied covenants shall be
read into this Guarantee Agreement against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to the Responsible Officer
of the Guarantee Trustee, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement, and use
the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
6
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred;
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement
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 Agreement; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform
to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in Liquidation Preference of the Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee
Agreement or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it.
SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
7
(i) The Guarantee Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, statement, proxy, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently evidenced by
an Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel, and the written advice or opinion of such legal
counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of
its Affiliates and may be one of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from
any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
and its officers, directors and agents such adequate security
and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be
requested by the Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(v) shall be taken to relieve
the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement and use the same
degree of care and skill in the exercise thereof as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(vi) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
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opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through its agents, custodians,
nominees or attorneys or any Affiliate, and the Guarantee
Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
Trustee (A) may request written instructions from the Holders
of a Majority in Liquidation Preference of the Securities, (B)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (c)
shall be fully protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive
power or authority available to the Guarantee Trustee shall be
construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3 INDEMNITY. The Guarantor agrees to indemnify
the Guarantee Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of
the Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the reasonable costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payment as a result of any amount due to it under this Guarantee
Agreement. Guarantor's indemnification obligations set forth in this Section
3.3 shall survive termination of this Guarantee Agreement or resignation or
removal of the Guarantee Trustee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
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(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000, and shall be a corporation
meeting the requirements of Section 310(a) of the Trust
Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted by
the Trust Indenture Act, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by 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 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation,
the resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
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(e) No Guarantee Trustee shall be liable for the acts or
omissions of any successor Guarantor Trustee.
(f) Upon the removal or resignation of the Guarantee Trustee,
the Guarantor shall pay all amounts due and owing to such Guarantee
Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert other than the defense of
payment. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND. The Guarantor
hereby waives notice of acceptance of the Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Guarantee Trustee, 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 5.3 OBLIGATIONS NOT AFFECTED. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the 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 the extension of any
interest payment period on the Debentures as so provided in the
Subordinated 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;
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(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or the Guarantee Trustee
to give notice to, or obtain the consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf
of the Holders; (iii) the Holders of a Majority in Liquidation Preference of
the Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or to direct the exercise of any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) if the Guarantee Trustee fails to enforce the Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor to enforce
its rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer or any other Person.
SECTION 5.5 GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments
in full (without duplication of amounts theretofore paid by the Issuer) or
upon distribution of Debentures to Holders as provided in the Declaration.
SECTION 5.6 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 Guarantee Agreement
and shall have the right to waive payment by the Issuer pursuant to Section
5.1; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Guarantee Agreement, if, at the time of any such payment, any amounts
are due and unpaid under this Guarantee Agreement. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such
amount to the Holders.
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SECTION 5.7 INDEPENDENT OBLIGATIONS. The Guarantor
acknowledges that its obligations hereunder are independent of the
obligations of the 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 Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1 SUBORDINATION. The Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and junior in right of payment to all liabilities of the Guarantor and PARI
PASSU with the most senior preferred stock of the Guarantor, if any, now or
hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock
of any affiliate of the Guarantor.
SECTION 6.2 CERTAIN COVENANTS OF THE GUARANTOR.
(a) Guarantor covenants and agrees that if and so long as (i)
the Issuer is the holder of all the Debentures, (ii) a Tax Event (as
defined in the Declaration) in respect of the Issuer has occurred and
is continuing and (iii) the Guarantor has elected, and has not revoked
such election, to pay Additional Sums (as defined in the Declaration)
in respect of the Preferred Securities and Common Securities, the
Guarantor will pay to the Issuer such Additional Sums.
(b) The Guarantor covenants and agrees that it will not, and
will not cause any subsidiary of the Guarantor to, (i) declare or pay
dividends on, make distributions with respect to, or redeem, purchase
or acquire, or make a liquidation payment with respect to any of its
Capital Stock (except for (x) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of
its Capital Stock and conversions or exchanges of Common Stock of one
class for Common Stock of another class and (y) redemptions or
purchases of any rights pursuant to a rights agreement and the
issuance of Capital Stock pursuant to such rights) or (ii) make any
payments of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities (including guarantees of
indebtedness for money borrowed) of the Company that rank PARI PASSU
with or junior to the Debentures (other than (u) any redemption,
liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including Capital
Stock) that rank PARI PASSU with or junior to the securities on which
such redemption, interest, principal or guarantee payment is being
made, (v) payments under this Guarantee Agreement or the Common
Securities Guarantee, (w) purchases of Common Stock related to the
issuance of Common Stock under any of the Company's benefit plans for
its directors, officers or employees, (x) as a result of a
reclassification of the Company's Capital Stock or the exchange or
conversion of one series or class of the Company's Capital Stock for
another series or class of the Company's Capital Stock, (y) the
purchase of
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fractional interests in shares of the Company's Capital Stock pursuant
to the conversion or exchange provisions of such Capital Stock or the
security being converted or exchanged and (z) redemptions or purchases
of any rights pursuant to a rights agreement and the issuance of
Capital Stock pursuant to such rights) if at such time (i) for any
distribution period, full distributions on a cumulative basis on any
Trust Securities have not been paid, (ii) there shall have occurred
any event of which the Guarantor has actual knowledge that (a) with
the giving of notice or the lapse of time, or both, would constitute
an "Event of Default" under the Subordinated Indenture with respect to
the Debentures and (b) in respect of which the Guarantor shall not
have taken reasonable steps to cure, (iii) the Guarantor shall be in
default with respect to its payment of any obligations under the
Guarantee or the Common Securities Guarantee or (iv) the Guarantor
shall have given notice of its selection of an Extension Period (as
defined in the Subordinated Indenture) with respect to the Debentures
and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.
(c) The Guarantor covenants and agrees (i) to maintain directly
or indirectly 100% ownership of the Common Securities, provided that
certain successors which are permitted by the Subordinated Indenture
may succeed to the Guarantor's ownership of the Common Securities,
(ii) not to voluntarily terminate, wind-up or liquidate the Issuer,
except (a) in connection with a distribution of the Debentures to the
holders of the Preferred Securities in dissolution of the Issuer, (b)
the redemption of the Preferred Securities or (c) in connection with
certain mergers, consolidations or amalgamations permitted by the
Declaration, (iii) to use its commercially reasonable efforts,
consistent with the terms and provisions of the Declaration, to cause
the Issuer to remain classified as a grantor trust and not as an
association taxable as a corporation for United States Federal income
tax purposes, (iv) for so long as Preferred Securities are
outstanding, not to convert Debentures except pursuant to a notice of
conversion delivered to the Conversion Agent (as defined in the
Declaration) by a Holder, (v) to maintain the reservation for issuance
of the number of shares of Common Stock that would be required from
time to time upon the conversion of all the Debentures then
outstanding, (vi) to deliver shares of Common Stock upon an election
by the Holders to convert such Preferred Securities into Common Stock
and (vii) to honor all obligations described herein relating to the
conversion or exchange of the Preferred Securities into or for Common
Stock or Debentures.
ARTICLE 7
TERMINATION
SECTION 7.1 TERMINATION. This Guarantee Agreement shall
terminate and be of no further force and effect upon (i) full payment of the
Redemption Price of all Preferred Securities, (ii) the distribution of
Debentures to the Holders in exchange for all of the Preferred Securities,
(iii) full payment of the amounts payable in accordance with the Declaration
upon dissolution of the Issuer or (iv) upon the distribution, if any, of
Common Stock to the holders of the Preferred Securities in respect of the
conversion of all such holders' Preferred Securities into Common Stock.
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Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred
Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article 8 of the Subordinated
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.2 AMENDMENTS. Except with respect to any changes
which do not adversely affect the rights of the Holders in any material
respect (in which case no consent of the Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the
Holders of not less than a Majority in Liquidation Preference of the
Securities. The provisions of Article 6 of the Declaration concerning
meetings of the Holders shall apply to the giving of such approval. The
Guarantor shall furnish the Guarantee Trustee with an Officers' Certificate
and an Opinion of Counsel to the effect that any amendment of this Agreement
is authorized and permitted.
SECTION 8.3 NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Tower Automotive, Inc.
0000 00xx Xxxxxx X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Vice President and Chief Financial Officer
(b) if given to the Issuer, in care of the Guarantee Trustee, at
the Issuer's (and the Guarantee Trustee's) address set forth below or
such other address as the Guarantee Trustee on behalf of the Issuer may
give notice of to the Holders:
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Tower Automotive Capital Trust
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Vice President
with a copy to:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Services Division
(c) if given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 8.4 BENEFIT. This Guarantee Agreement is solely
for the benefit of the Holders and is not separately transferable from the
Preferred Securities.
SECTION 8.5 INTERPRETATION. In this Guarantee Agreement,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings
assigned to them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
16
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.6 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS 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.
* * * * * *
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
TOWER AUTOMOTIVE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO,
as Guarantee Trustee
By: /s/ Xxxxxxxx X. Dowyon
-----------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
-----------------------------------------------
Title: Vice President
-----------------------------------------------
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