DRAFT 11/12/98
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GUARANTEE AGREEMENT
GREAT-WEST LIFE & ANNUITY INSURANCE CAPITAL I
Dated as of , 1998
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CROSS REFERENCE TABLE*
Section of
Trust
Indenture Section of
Act of 1939 Guarantee
as amended Agreement
---------- ---------
310(a) ................................................4.1(a)
310(b) ................................................4.1(c)
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)
312(c) .................................................2.9
313(a) .................................................2.3
313(b) .................................................2.3
313(c) .................................................2.3
313(d) .................................................2.3
314(a) .................................................2.4
314(b) .............................................Inapplicable
314(c) .................................................2.5
314(d) .............................................Inapplicable
314(e) .................................................2.5
314(f) .............................................Inapplicable
315(a) ............................................3.1(d); 3.2(a)
315(b) ................................................2.7(a)
315(c) ................................................3.1(c)
315(d) ................................................3.1(d)
316(a) .............................................2.6; 5.4(a)
317(a) ..............................................2.10; 5.4
318(a) ................................................2.1(b)
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* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not have any bearing upon the
interpretation of any of its terms or provisions
TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION AND DEFINITIONS ................................1
SECTION 1.1 Interpretation and Definitions ....................1
ARTICLE 2
TRUST INDENTURE ACT ...........................................4
SECTION 2.1 Trust Indenture Act; Application ................4
SECTION 2.2 Lists of Holders ................................4
SECTION 2.3 Reports by 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 Guarantee Event of Default; Waiver ..............5
SECTION 2.7 Guarantee Event of Default; Notice ..............5
SECTION 2.8 Conflicting Interests ...........................6
SECTION 2.9 Disclosure of Information .......................6
SECTION 2.10 Guarantee Trustee May File Proofs of Claim ......6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE .............................................6
SECTION 3.1 Powers and Duties of Guarantee Trustee ..........6
SECTION 3.2 Certain Rights of Guarantee Trustee .............8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Guarantee ...................................10
ARTICLE 4
GUARANTEE TRUSTEE ............................................10
SECTION 4.1 Guarantee Trustee; Eligibility .................10
SECTION 4.2 Appointment, Removal and Resignation
of Guarantee Trustee ...........................11
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Page
ARTICLE 5
GUARANTEE ....................................................11
SECTION 5.1 Guarantee ......................................11
SECTION 5.2 Waiver of Notice and Demand ....................12
SECTION 5.3 Obligations Not Affected .......................12
SECTION 5.4 Rights of Holders ..............................13
SECTION 5.5 Guarantee of Payment ...........................13
SECTION 5.6 Subrogation ....................................14
SECTION 5.7 Independent Obligations ........................14
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION ....................14
SECTION 6.1 Limitation of Transactions .....................14
SECTION 6.2 Ranking ........................................15
SECTION 6.3 Pari Passu Guarantees ..........................15
ARTICLE 7
TERMINATION ..................................................15
SECTION 7.1 Termination ....................................15
ARTICLE 8
INDEMNIFICATION ..............................................16
SECTION 8.1 Exculpation ....................................16
SECTION 8.2 Indemnification ................................16
ARTICLE 9
MISCELLANEOUS ................................................16
SECTION 9.1 Successors and Assigns .........................16
SECTION 9.2 Amendments .....................................17
SECTION 9.3 Notices ........................................17
SECTION 9.4 Benefit ........................................18
SECTION 9.5 Governing Law ..................................18
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as
of [ ], 1998, is executed and delivered by GWL&A Financial Inc.,
a Delaware corporation (the "Guarantor"), and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) of the Securities (as defined
herein) of Great-West Life & Annuity Insurance Capital I, a
Delaware statutory business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, pursuant to the Declaration (as defined
herein), the Trust is issuing on the date hereof $[ ] aggregate
liquidation amount of capital securities, having a liquidation
amount of $25 each, designated the [ ]% Capital Securities (the
"Capital Securities") and $[ ] aggregate liquidation amount of
common securities, having a liquidation amount of $25 each,
designated the [ ]% Common Securities (the "Common Securities";
together with the Capital Securities, the "Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Guarantee, to pay to
the Holders of the Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Guarantee has the
same meaning throughout;
(c) all references to "the Guarantee" or "this
Guarantee" are to this Guarantee as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee to Articles and
Sections are to Articles and Sections of this Guarantee,
unless otherwise specified;
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(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee, unless otherwise
defined in this Guarantee or unless the context otherwise
requires;
(f) a term defined in the Declaration or the Indenture
has the same meaning when used in this Guarantee, unless
otherwise defined in this Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" has the meaning given to such term in
the Indenture.
"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
Guarantee is located ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; telecopy no. (212) [insert fax].
"Covered Person" means any Holder or beneficial owner
of the Securities.
"Debentures" means the % Junior Subordinated
Debentures due 2028 to be issued by the Guarantor, and to be held
by the Property Trustee (as defined in the Declaration) of the
Trust.
"Declaration" means the Amended and Restated
Declaration of Trust, dated as of , 1998, as amended,
modified or supplemented from time to time, among the trustees of
the Trust named therein, the Guarantor, as sponsor, and the
Holders from time to time of undivided beneficial ownership
interests in the assets of the Trust.
"Guarantee Event of Default" means a default by the
Guarantor on any of its payment or other obligations under this
Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by or on behalf of the
Trust: (i) any accumulated and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such
Securities to the extent the Trust shall have funds available
therefor at the time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption, with
respect to any Securities called for redemption by the Trust to
the extent the Trust shall have funds available therefor at the
time, and (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange
for Securities as provided in the Declaration), the lesser of (a)
the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Securities to the date of payment, to
the extent the Trust has funds on hand legally available
therefor, and (b) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust
(in either case, the "Liquidation Distribution"). If a Trust
Enforcement
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Event (as defined in the Declaration) has occurred and is
continuing, the rights of Holders of the Common Securities to
receive Guarantee Payments under this Guarantee are subordinated
to the rights of Holders of the Capital Securities to receive
payments hereunder.
"Guarantee Trustee" means The Bank of New York, until
a successor Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder of the Securities, as
registered on the books and records of the Trust; provided,
however, that, in determining whether the holders of the
requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor or any
other obligor on the Capital Securities; and provided further,
that in determining whether the holders of the requisite
liquidation amount of Capital Securities have voted on any matter
provided for in this Guarantee, then for the purpose of such
determination only (and not for any other purpose hereunder), if
the Capital Securities remain in the form of one or more Global
Certificates (as defined in the Declaration), the term "Holders"
shall mean the holder of the Global Certificate acting at the
direction of the Capital Security Beneficial Owners (as defined
in the Declaration).
"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 ,
1998, between the Guarantor and The Bank of New York, as trustee
(the "Debenture Trustee"), and any indenture supplemental thereto
pursuant to which the Debentures are to be issued to the Property
Trustee (as defined in the Declaration) of the Trust.
"Majority in Liquidation Amount of the Securities"
means Holder(s) of outstanding Securities, voting as a single
class, who are the Holders of more than 50% of the
aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities.
In determining whether the Holders of the requisite amount of
Securities have voted, Securities which are owned by the
Guarantor or any Affiliate of the Guarantor or any other obligor
on the Securities shall be disregarded for the purpose of any
such determination.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by two Authorized Officers (as
defined in the Declaration) of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definitions relating thereto;
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(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 within the Corporate Trust Office
of the Guarantee Trustee with direct responsibility for the
administration of this Guarantee 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 Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. This
Guarantee is subject to the provisions of the Trust Indenture Act
that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this
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. (a) The Guarantor shall
provide or shall cause the Trust to provide the Guarantee Trustee
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders"), (i) semi-annually, not later than
_______ and _______ of each year, and (ii) at such other times as
the Guarantee Trustee may request in writing, within 30 days of
receipt by the Guarantor of a written request from the Guarantee
Trustee for a List of Holders as of a date no
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more than 15 days before such List of Holders is given to the
Guarantee Trustee, in each case to the extent such information is
in the possession or control of the Guarantor and has not
otherwise been received by the Guarantee Trustee in its capacity
as such. The Guarantee Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in
Lists of Holders given to it, provided that it 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 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by Guarantee Trustee. Within 60
days after May 15 of each year (commencing with the year of the
first anniversary of the issuance of the Securities), the
Guarantee Trustee shall provide to the Holders of the Securities
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 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, provided that such compliance certificate shall be
delivered on or before 120 days after the end of each calendar
year of the Guarantor.
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, if
any, provided for in this 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) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver. The
Holders of a Majority in Liquidation Amount of the Securities
may, by vote, on behalf of the Holders of all of the Securities,
waive any past default or Guarantee Event of Default and its
consequences. Upon such waiver, any such default or Guarantee
Event of Default shall cease to exist, and any default or
Guarantee Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or
Guarantee Event of Default or impair any right consequent
thereon.
SECTION 2.7 Guarantee Event of Default; Notice. The
Guarantee Trustee shall, within 90 days after the occurrence of a
Guarantee Event of Default, transmit by certified or registered
mail to the Holders, notices of all Guarantee 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, except in the case of a default in the payment
of a Guarantee Payment, that the Guarantee Trustee shall be
protected in withholding such notice if and so long
6
as a Responsible Officer of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Guarantee
Trustee shall have received written notice thereof or a
Responsible Officer of the Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual
knowledge thereof.
SECTION 2.8 Conflicting Interests. The Declaration
shall be deemed to be specifically described in this Guarantee
for the purposes of clause (i) of the first provision contained
in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure
of information as to the names and addresses of the Holders of
the Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of
any existing law, or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under Section
312(b) of the Trust Indenture Act.
SECTION 2.10 Guarantee Trustee May File Proofs of
Claim. Upon the occurrence of a Guarantee Event of Default, the
Guarantee Trustee is hereby authorized to (a) recover judgment,
in its own name and as trustee of an express trust, against the
Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have its claims and those of the Holders of the Securities
allowed in any judicial proceedings relative to the Guarantor,
its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee
Trustee on behalf of the Trust for the benefit of the Holders,
and the Guarantee Trustee shall not transfer this Guarantee to
any Person except to a Holder 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 in such capacity. The right, title and interest of the
Guarantee Trustee in and to this Guarantee shall automatically
vest in any Successor Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
7
(b) If a Guarantee Event of Default actually known to
a Responsible Officer of the Guarantee Trustee has occurred and
is continuing, the Guarantee Trustee shall enforce this Guarantee
for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of
any Guarantee Event of Default and after the curing of all
Guarantee Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read
into this Guarantee against the Guarantee Trustee. In case a
Guarantee 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 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.
No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Guarantee
Event of Default and after the curing or waiving of
all such Guarantee Events of Default that may have
occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as
are specifically set forth in this Guarantee, and
no implied covenants or obligations shall be read
into this Guarantee against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee;
but in the case of any such certificates or
opinions 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 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 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 Securities
8
relating to the time, method and place of conducting
any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this
Guarantee; and
(iv) subject to Section 3.1(b), no provision
of this Guarantee shall require the Guarantee Trustee
to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any
of its duties or in the exercise of any of its rights
or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to
it under the terms of this 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 reasonably 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 shall be sufficiently
evidenced by an Officers' Certificate unless otherwise
prescribed herein.
(iii) Whenever, in the administration of
this Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established
before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which,
upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no
duty to see to any recording, filing or registration
or any instrument (or any rerecording, refiling or
re-registration thereof).
(v) 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 by it
hereunder in good faith and in accordance with such
advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee
Trustee
9
shall have the right at any time to seek instructions
concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Guarantee
Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in
complying with such request or direction, including
such reasonable advances as may be requested by the
Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of a Guarantee
Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be
bound to make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(viii) The Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents, nominees, custodians or attorneys.
(ix) Any action taken by the Guarantee
Trustee or its agents hereunder shall bind the Holders
of the Securities, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party
shall be required to inquire as to the authority of
the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this
Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (i) may
request instructions from the Holders of a Majority in
Liquidation Amount of the Securities, (ii) may refrain
from enforcing such remedy or right or taking such
other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(b) No provision of this Guarantee shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall
be illegal, or in which the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable
10
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 Not Responsible for Recitals or Issuance
of Guarantee. The recitals contained in this Guarantee shall be
taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness.
The Guarantee Trustee makes no representations as to the validity
or sufficiency of this Guarantee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall be at all times 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 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 50 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.
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.
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(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 such office until a Successor Guarantee Trustee shall have
been appointed. 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 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 any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Guarantee Trustee all amounts
owing to the Guarantee Trustee for fees and reimbursement of
expenses which have accrued to the date of such termination,
removal or resignation.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees
to pay in full, on a subordinated basis, to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust 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 Trust to pay such amounts to such Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of
this Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a
proceeding first against the Trust or any other Person before
proceeding against the Guarantor,
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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 shall be absolute and
unconditional and shall remain in full force and effect until the
entire liquidation amount of all outstanding Securities shall
have been paid and such obligation shall in no way be affected or
impaired by reason of the happening from time to time of any
event, including without limitation, the following, whether or
not with notice to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or
otherwise, of the performance or observance by the Trust of
any express or implied agreement, covenant, term or
condition relating to the Securities to be performed or
observed by the Trust;
(b) The extension of time for the payment by the Trust
of all or any portion of the Distributions, Redemption
Price (as defined in the Indenture), Liquidation
Distribution or any other sums payable under the terms of
the Securities or the extension of time for the performance
of any other obligation under, arising out of, or in
connection with the 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 period on the
Debentures or any change to the maturity date of the
Debentures permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence
on the part of the Property Trustee or the Holders to
enforce, assert or exercise any right, privilege, power or
remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Securities, or any action on
the part of the Trust 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 Trust or any of the assets of the Trust;
(e) Any invalidity of, or defect or deficiency in, the
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 (other than payment of the
underlying obligation), 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.
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There shall be no obligation of the Guarantee Trustee
or the Holders to give notice to, or obtain consent of the
Guarantor or any other Person with respect to the happening of
any of the foregoing.
No setoff, counterclaim, reduction or diminution of
any obligation, or any defense of any kind or nature that the
Guarantor has or may have against any Holder shall be available
hereunder to the Guarantor against such Holder to reduce the
payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
(a) The Holders of not less than a Majority in
Liquidation Amount 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 or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this
Guarantee, then any Holder may, subject to the subordination
provisions of Section 6.2, institute a legal proceeding directly
against the Guarantor to enforce the Guarantee Trustee's rights
under this Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a Holder may, subject to the
subordination provisions of Section 6.2, directly institute a
proceeding against the Guarantor for enforcement of the Guarantee
for such payment to the Holder of the principal of or interest on
the Debentures on or after the respective due dates specified in
the Debentures, and the amount of the payment will be based on
the Holder's pro rata share of the amount due and owing on all of
the Securities. The Guarantor hereby waives any right or remedy
to require that any action on this Guarantee be brought first
against the Trust or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not
of collection. This Guarantee will not be discharged except by
payment of the Guarantee Payments in full (without duplication of
amounts theretofore paid by the Trust) 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 Trust in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee;
provided, however, that the Guarantor shall not (except to the
extent required by 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 Guarantee, if at
the time of any such payment any amounts are due and unpaid under
this Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount
to the Guarantee Trustee for the benefit of 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 Trust with
respect to the Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through
5.3(g), inclusive, hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Securities remain outstanding, if there
shall have occurred a Guarantee Event of Default or a Trust
Enforcement Event (as defined in the Declaration), then the
Guarantor shall not, and shall not permit any subsidiary of the
Guarantor, to (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, the Guarantor's capital stock, (ii) make any
payment of principal, interest or premium, if any, on, or repay,
repurchase or redeem, any debt securities that rank pari passu
with or junior to the Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Guarantor of the
debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior to the Debentures
(other than (a) dividends or distributions in the form of stock,
warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other
rights is the same stock as that on which the dividend is being
paid or ranks pari passu with or junior to such stock, (b)
payments under this Guarantee, (c) any declaration of a dividend
in connection with the implementation of a shareholders' rights
plan, or the issuance of rights, stock or other property under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (d) as a result of
reclassification of the Guarantor's capital stock into one or
more other classes or series of the Guarantor's capital stock or
the exchange or conversion of one class or series of the
Guarantor's capital stock (or any capital stock of a subsidiary
of the Guarantor) for another class or series of the Guarantor's
capital stock, or of any class or series of the Guarantor's
indebtedness for any class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in the shares of
the security being converted or exchanged and (f) repurchases,
redemptions or other acquisitions or common stock related to the
issuance of common stock or rights under any of the Guarantor's
employment contracts, benefit plans or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period).
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SECTION 6.2 Ranking.
This Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness (as defined in the Indenture)
of the Guarantor to the extent and in the manner set forth in the
Indenture, except those liabilities of the Guarantor made pari
passu or subordinate to this Guarantee by their terms.
If a Trust Enforcement Event has occurred and is
continuing under the Declaration, the rights of the Holders of
the Common Securities to receive Guarantee Payments hereunder
shall be subordinated to the rights of the Holders of the
Securities to receive payment of all amounts due and owing
hereunder.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.
This Guarantee shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of
all Securities, (ii) the distribution of the Debentures to the
Holders in exchange for all the Securities or (iii) full payment
of the amounts payable in accordance with the Declaration upon
liquidation of the Trust. Notwithstanding the foregoing, this
Guarantee 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 under the Securities or under this Guarantee.
ARTICLE 8
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 Guarantee and in a
manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified
Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim
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 Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been
16
selected with reasonable care by or on behalf of the Guarantor,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets
from which Distributions to Holders 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 loss, liability 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 obligation to
indemnify as set forth in this Section 8.2 shall survive the
termination of this Guarantee and the resignation or removal of
the Guarantee Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this
Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Securities then outstanding. Except
in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture
and pursuant to which the successor or assignee agrees in writing
to perform the Guarantor's obligations hereunder, the Guarantor
shall not assign its obligations hereunder.
SECTION 9.2 Amendments.
Except with respect to any changes that do not
materially and adversely affect the rights of the Holders (in
which case no consent of the Holders will be required), this
Guarantee may not be amended without the prior approval of the
Holders of not less than a Majority in Liquidation Amount of the
Securities. The provisions of Section 11.2 of the Declaration
with respect to meetings of, and action by written consent of,
the Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices.
All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by registered or certified
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 Guarantor and the Holders):
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[insert phone]
Att:
(b) If given to the Guarantor, at the Guarantor's
mailing addresses set forth below (or such other address as
the Guarantor may give notice of to the Guarantee Trustee
and the Holders):
GWL&A Financial Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Att:
(c) If given to any Holder, at the address set forth
on the books and records of the Trust.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by certified or registered mail, 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. No notice to
or demand on any party hereto in any case shall, unless otherwise
required under this Guarantee, entitle such party to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any party hereto to any
other or further action in any circumstances without notice or
demand. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed by
facsimile or telecommunication transmission, when received unless
received outside of business hours, in which case on the next
open of business on a Business Day.
SECTION 9.4 Benefit.
This Guarantee is solely for the benefit of the
Holders of the Securities and, subject to Section 3.1(a), is not
separately transferable from the Securities.
SECTION 9.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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IN WITNESS WHEREOF, this Guarantee is executed as of
the day and year first above written.
GWL&A FINANCIAL INC.,
as Guarantor
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Guarantee Trustee
By:____________________________
Name:
Title: