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PREFERRED SECURITIES GUARANTEE AGREEMENT
BEAR XXXXXXX CAPITAL TRUST II
Dated as of December 16, 1998
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CROSS-REFERENCE TABLE
Trust Preferred
Indenture Securities
Act Section Guarantee
----------- Section
-----------
310 (a)................................................... 4.1(a)
(b)................................................... 4.1(c)
(c)................................................... Not Applicable
311 (a)................................................... 2.2(a)
(b)................................................... 2.2(b)
(c)................................................... Not Applicable
312 (a)................................................... 2.2(a)
(b)................................................... 2.2(b)
313 ...................................................... 2.3
314 (a)................................................... 2.4
(b)................................................... Not Applicable
(c)................................................... 2.5
(d)................................................... Not Applicable
(f)................................................... Not Applicable
315 (a)................................................... 3.1(b)
(b)................................................... 2.7
(c)................................................... 3.1(a)
(d)................................................... 3.1(a)
316 (a)................................................... 5.4(a), 2.6
__________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of this Preferred Securities Guarantee.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation..................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................5
SECTION 2.2 Lists of Holders of Securities..................................5
SECTION 2.3 Reports by the Guarantee Trustee................................5
SECTION 2.4 Periodic Reports to Guarantee Trustee...........................6
SECTION 2.5 Evidence of Compliance with Conditions Precedent................6
SECTION 2.6 Events of Default; Waiver.......................................6
SECTION 2.7 Events of Default; Notice.......................................6
SECTION 2.8 Conflicting Interests...........................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee......................7
SECTION 3.2 Certain Rights of Guarantee Trustee.............................9
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.........................................11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.................................11
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee......12
ARTICLE V
GUARANTEE
SECTION 5.1 Preferred Securities Guarantee.................................12
SECTION 5.2 Waiver of Notice and Demand....................................13
SECTION 5.3 Obligations Not Affected.......................................13
SECTION 5.4 Rights of Holders..............................................14
SECTION 5.5 Guarantee of Payment...........................................14
SECTION 5.6 Subrogation....................................................15
SECTION 5.7 Independent Obligations........................................15
SECTION 5.8 Consolidation, Merger, Sale of Assets and Other
Transactions.................................................15
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking........................................................16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination....................................................16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation....................................................16
SECTION 8.2 Indemnification................................................17
SECTION 8.3 Compensation; Reimbursement of Expenses........................17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.........................................18
SECTION 9.2 Amendments.....................................................18
SECTION 9.3 Notices........................................................18
SECTION 9.4 Benefit........................................................19
SECTION 9.5 Governing Law..................................................19
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PREFERRED SECURITIES GUARANTEE AGREEMENT
PREFERRED SECURITIES GUARANTEE AGREEMENT, dated as of December 16,
1998 (the "Preferred Securities Guarantee") is executed and delivered by The
Bear Xxxxxxx Companies Inc., a Delaware corporation (the "Guarantor"), and The
Chase Manhattan Bank, a New York State banking corporation, 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 Bear Xxxxxxx
Capital Trust II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated
as of December 16, 1998 (the "Trust Agreement"), among the trustees named
therein of the Issuer, the administrators named therein, The Bear Xxxxxxx
Companies Inc., as depositor, 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 12,000,000 shares ($300,000,000 aggregate Liquidation Amount) of 7
1/2% Trust Issued Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of 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 common
securities guarantee agreement (the "Common Securities Guarantee") in similar
terms to this Preferred Securities Guarantee for the benefit of the holders of
the Common Securities (as defined in the Trust Agreement) of the Issuer, except
that if an Event of Default (as defined in the Trust Agreement), has occurred
and is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments under
this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(e) terms defined in the Trust Agreement as at the date of execution
of this Preferred Securities Guarantee or in the Trust Indenture Act as the case
may be, have the same meanings when used in this Preferred Securities Guarantee,
unless otherwise defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Corporate Trust Office" means the office of the Guarantee Trustee
at which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Preferred Securities Guarantee is located at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the junior subordinated debentures of The Bear
Xxxxxxx Companies Inc. designated the 7 1/2% Junior Subordinated Deferrable
Interest Debentures due December 15, 2028 held by the Property Trustee (as
defined in the Trust Agreement) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Existing Indenture" means the Indenture, dated as of January 29,
1997, between the Guarantor and The Chase Manhattan Bank, as trustee, as amended
or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) which are required to be paid on such Preferred
Securities to the extent the Issuer shall have
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funds available therefor, (ii) the redemption price, including all accumulated
and unpaid Distributions to the date of redemption (the "Redemption Price") to
the extent the Issuer has funds available therefor, with respect to any
Preferred Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the Liquidation Amount and all accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantees" means the Common Securities Guarantee and this
Preferred Securities Guarantee, collectively.
"Guarantee Trustee" means The Chase Manhattan Bank, a New York State
banking corporation, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, 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 December 16, 1998,
between the Guarantor and The Chase Manhattan Bank, 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 Property Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.
"Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
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 stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities then outstanding.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board or any Vice Chairman of the Board or the President or any Executive
Vice President or Chief
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Operating Officer or Chief Financial Officer of the Depositor and by the
Treasurer or an Assistant Treasurer or Controller or the Secretary or an
Assistant Secretary of the Depositor and delivered to the Guarantee Trustee. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee (other than
pursuant to Section 2.4) 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.
"Other Guarantees" means all other guarantees (if any) to be issued
by the Company with respect to capital securities (if any) to be issued by other
trusts to be established by the Company (if any).
"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 within the Corporate Trust Office of the Guarantee Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer, any senior
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 4.1.
"Trust Event of Default" means an "Event of Default" as defined
in the Trust Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act and shall, to the extent applicable, be governed by
such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities.
(a) The Guarantor shall provide the Guarantee Trustee (i) within
five days after each record date for payment of Distributions, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses
of the Holders of the Preferred Securities ("List of Holders") as of such record
date, provided that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Guarantee Trustee by the Guarantor, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request for a
List of Holders, which List of Holders shall be as of a date no more than 14
days before such List of Holders is given to the Guarantee Trustee. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee.
Not later than January 15 of each year commencing January 15, 2000,
the Guarantee Trustee shall provide to the Holders of the Preferred Securities
such reports dated as of the immediately preceding November 15 as are required
by Section 313(a) 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. The Guarantor will notify the Guarantee Trustee if and when any Preferred
Securities are listed on any exchange, interdealer quotation system or
self-regulatory organization.
SECTION 2.4 Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders as applicable, such documents, reports
and information (if any) as required by Section 314 and the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314
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of the Trust Indenture Act, such compliance certificate to be delivered annually
on or before September 15 of each year beginning in 1999.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence
of compliance with any conditions precedent provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.7 Events 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 of the Preferred 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,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or responsible officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice thereof from the Guarantor or a Holder, or a Responsible Officer of the
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained written notice thereof.
SECTION 2.8 Conflicting Interests.
The Indenture and the securities issued or to be issued thereunder;
the Trust Agreement and the Trust Securities issued or to be issued thereunder;
any Preferred Securities Guarantee Agreement relating to a Bear Xxxxxxx Trust
(as defined in the Indenture and the Existing Indenture) between the Guarantor
and The Chase Manhattan Bank, as guarantee trustee; any Amended and Restated
Trust Agreement relating to a Bear Xxxxxxx Trust among the Guarantor, as
depositor, The Chase Manhattan Bank, as property trustee, Chase Manhattan Bank
Delaware, as Delaware trustee, the administrators named therein and the several
holders
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and the Trust Securities issued and to be issued thereunder; and the Existing
Indenture and the securities issued or to be issued thereunder, shall be deemed
to be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the proviso contained in Section 310(b)(l) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Guarantee Trustee shall not transfer this Preferred Securities Guarantee
to any Person except a Holder of Preferred Securities exercising his or her
rights pursuant to Section 5.4(b) or to a Successor 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 Preferred Securities Guarantee for the benefit of the Holders
of the Preferred Securities.
(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 Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee 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 a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Preferred Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Preferred
Securities
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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 Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this
Preferred Securities 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
Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the 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
Preferred Securities 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 direction of the Holders of not less than a Majority
in Liquidation Amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities 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
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Guarantee Trustee, 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:
(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 Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities 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 Officers' Certificate 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 any rerecording,
refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the written advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel may
be counsel to the Guarantor or any of its Affiliates and may include any
of its employees. The 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 Preferred
Securities 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
3.2(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 Preferred Securities 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,
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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.
(ix) Whenever in the administration of this Preferred
Securities 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
Preferred 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.
(x) 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 Preferred Securities Guarantee.
(b) No provision of this Preferred Securities 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 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee.
The recitals contained in this Preferred Securities 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 Preferred Securities
Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(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 organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of
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Columbia, or a corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least fifty million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the 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, subject to the penultimate
paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of 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 except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(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 4.2 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.
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(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Guarantee Trustee all amounts owing to the
Guarantee Trustee under Sections 8.2 and 8.3 accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Preferred Securities Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. Such
obligations will not be discharged except by payment of the Guarantee Payments
in full. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, the Issuer or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of 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, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment
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period on the Debentures or any extension of the maturity date of the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or 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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Guarantee Trustee in respect of
this Preferred Securities Guarantee or exercising any trust or power conferred
upon the Guarantee Trustee under this Preferred Securities Guarantee; provided
however, that (subject to Section 3.1) 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 counsel determines that the action or proceedings directed may not
lawfully be taken or if the Guarantor Trustee in good faith by its board of
directors or trustees, executive committees or a trust committee of directors or
trustees and/or Responsible Officers shall determine that the action or
proceedings so directed would involve the Guarantee Trustee in personal
liability.
(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Guarantee Trustee or any other Person. The Guarantor
waives any right or remedy to require that any such action be
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brought first against the Issuer or any other Person before so proceeding
directly against the Guarantor.
(c) The Guarantor expressly acknowledges that (i) this Preferred
Securities Guarantee will be deposited with the Guarantee Trustee to be held for
the benefit of the Holders and (ii) the Guarantee Trustee has the right to
enforce this Preferred Securities Guarantee on behalf of the Holders.
SECTION 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection. This Preferred Securities Guarantee 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 Trust Agreement.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
SECTION 5.8 Consolidation, Merger, Sale of Assets and Other
Transactions.
The Guarantor shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge into
the Guarantor or convey, transfer or lease its properties and assets
substantially as an entirety to the Guarantor, unless (i) either the Guarantor
shall be the continuing corporation, or the successor shall be a Person
organized under the laws of the United States or any state or the District of
Columbia, and such successor Person expressly assumes the Guarantor's
obligations under this Preferred Securities Guarantee by written instrument in
form satisfactory to the Guarantee Trustee, (ii) immediately after
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giving effect thereto, no Event of Default under this Preferred Securities
Guarantee, and no event which, after notice or lapse of time or both, would
become an Event of Default under this Preferred Securities Guarantee, shall have
occurred and be continuing, and (iii) such consolidation, merger, conveyance,
transfer or lease shall be permitted under the Trust Agreement and the Indenture
and does not give rise to any breach or violation of the Trust Agreement or
Indenture.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking.
This Preferred Securities 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 of the Company (as defined
in the Indenture). This Preferred Securities Guarantee will rank pari passu with
all Other Guarantees. By their acceptance thereof, each Holder of Preferred
Securities agrees to the foregoing provisions of this Preferred Securities
Guarantee and the other terms set forth herein.
If a Trust Event of Default has occurred and is continuing, the
rights of holders of the Common Securities of the Issuer to receive payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate, subject to
Sections 8.2 and 8.3, (i) upon full payment of the Redemption Price of all
Preferred Securities, (ii) upon the distribution of the Debentures to the
Holders of all of the Preferred Securities or (iii) upon full payment of the
amounts payable in accordance with the Trust Agreement upon dissolution of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or under this Preferred Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Trust or the
Guarantor by any Persons 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 Preferred Securities might properly be paid.
SECTION 8.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Guarantee
Trustee will not claim or exact any lien or charge on any Guarantee Payments as
a result of any amount due to it under this Preferred Securities Guarantee. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Preferred Securities Guarantee.
SECTION 8.3 Compensation; Reimbursement of Expenses.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); and
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(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
Preferred Securities 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 its negligence or bad faith.
The provisions of this Section 8.3 shall survive the termination of
this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity or any sale
or conveyance of the Guarantor's assets to another entity or of another entity's
assets to the Guarantor, in each case, to the extent permitted under Section 5.8
of this Preferred Securities Guarantee, the Guarantor may not assign its rights
or delegate its obligations under this Preferred Securities Guarantee without
the prior approval of the Holders of at least a Majority in Liquidation Amount
of the Preferred Securities.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the
rights of Holders of Preferred Securities in any material respect (in which case
no consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of a least a Majority in
Liquidation Amount of the Preferred Securities.
The provisions of the Trust Agreement with respect to amendments
thereof apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
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(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 Preferred Securities):
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trustee Administration Department
(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 Preferred Securities and to the Guarantee Trustee):
The Bear Xxxxxxx Companies Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Secretary
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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This Preferred Securities Guarantee is executed as of the day and
year first above written.
THE BEAR XXXXXXX COMPANIES INC.,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Trust Officer
