EXHIBIT 10.6
------------------------------------------------------
CROWN MEDIA HOLDINGS, INC.
AND
JPMORGAN CHASE BANK,
PREFERRED GUARANTEE TRUSTEE
PREFERRED SECURITIES GUARANTEE AGREEMENT
DATED AS OF DECEMBER 17, 2001
------------------------------------------------------
TABLE OF CONTENTS
PAGE
CROSS-REFERENCE TABLE.................................................................................iii
Article I DEFINITIONS AND INTERPRETATION........................................................2
Section 1.1 Definitions and Interpretation...............................................2
ARTICLE II TRUST INDENTURE ACT...................................................................5
Section 2.1 Trust Indenture Act; Application.............................................5
Section 2.2 Lists of Holders of Securities...............................................5
Section 2.3 Reports by the Preferred Guarantee Trustee...................................5
Section 2.4 Periodic Reports to Preferred Guarantee Trustee..............................5
Section 2.5 Evidence of Compliance with Conditions Precedent.............................6
Section 2.6 Events of Default; Waiver....................................................6
Section 2.7 Event of Default; Notice.....................................................6
Section 2.8 Conflicting Interests........................................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE..............................7
Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.........................7
Section 3.2 Certain Rights of Preferred Guarantee Trustee................................8
Section 3.3 Not Responsible for Recitals or Issuance of Guarantee.......................10
ARTICLE IV PREFERRED GUARANTEE TRUSTEE..........................................................10
Section 4.1 Preferred Guarantee Trustee; Eligibility....................................10
Section 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustee.........11
ARTICLE V GUARANTEE............................................................................12
Section 5.1 Guarantee...................................................................12
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.................................................................13
Section 5.7 Independent Obligations.....................................................14
ARTICLE VI SUBORDINATION........................................................................14
Section 6.1 Agreement to Subordinate....................................................14
Section 6.2 Default on Senior Indebtedness..............................................14
Section 6.3 Liquidation; Dissolution; Bankruptcy........................................15
Section 6.4 Subrogation.................................................................16
Section 6.5 Indenture Trustee to Effectuate Subordination...............................17
Section 6.6 Notice by the Guarantor.....................................................18
i
Section 6.7 Rights of the Preferred Guarantee Trustee; Holders of Senior Indebtedness...19
Section 6.8 Subordination May Not Be Impaired...........................................19
ARTICLE VII TERMINATION..........................................................................20
Section 7.1 Termination.................................................................20
ARTICLE VIII INDEMNIFICATION......................................................................20
Section 8.1 Exculpation.................................................................20
Section 8.2 Indemnification.............................................................20
ARTICLE IX MISCELLANEOUS........................................................................21
Section 9.1 Successors and Assigns......................................................21
Section 9.2 Amendments..................................................................21
Section 9.3 Notices.....................................................................21
Section 9.4 Benefit.....................................................................22
Section 9.5 Governing Law...............................................................22
ii
CROSS-REFERENCE TABLE*
Section of Trust
Section of Guarantee Indenture
of 1939, as amended Act 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)
313...................................................................................................2.3
314(a)................................................................................................2.4
314(b).......................................................................................Inapplicable
314(c)................................................................................................2.5
314(d).......................................................................................Inapplicable
314(f).......................................................................................Inapplicable
315(a).............................................................................................3.1(b)
315(b)................................................................................................2.7
315(c).............................................................................................3.1(a)
315(d).............................................................................................3.1(a)
316(a)........................................................................................5.4(a), 2.6
-----------------
* This Cross-Reference Table does not constitute part of the
Preferred
Securities Guarantee Agreement and shall not affect the interpretation
of any of its terms or provisions.
iii
PREFERRED SECURITIES GUARANTEE AGREEMENT
This
PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of December 17, 2001, is executed and delivered by Crown
Media Holdings, Inc., a Delaware corporation (the "Guarantor"), and JPMorgan
Chase Bank, a
New York banking corporation, as trustee (the "Preferred Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Crown Media Trust, a Delaware
statutory business trust (the "Trust");
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of December 17, 2001, among the trustees of
the Trust named therein and the Guarantor as Sponsor, and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust, the Trust
is issuing on the date hereof $265,000,000 aggregate stated liquidation amount
of preferred securities designated the 6.75% Trust Preferred Securities (the
"Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires to irrevocably agree on a
subordinated basis, to the extent set forth in this Guarantee Agreement, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Indenture (as defined herein)), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments (as defined in the Common Securities Guarantee) under the Common
Securities Guarantee shall be subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments (as defined herein) under this
Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) Capitalized terms used in this Guarantee Agreement 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 Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Administrative Agent" means JPMorgan Chase Bank, and any
successor, as administrative agent under that certain Credit, Security, Guaranty
and Pledge Agreement, dated as of August 31, 2001, by and among the Guarantor,
certain of its Subsidiaries, and the lenders and agents thereto.
"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.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or
2
made by the Trust: (i) any accrued and unpaid distributions which are required
to be paid on such Preferred Securities to the extent the Trust shall have funds
legally available therefor, (ii) the redemption price, including all accrued and
unpaid distributions and premiums, if any, to the date of redemption or
repurchase, as the case may be (the "Redemption Price"), to the extent the Trust
has funds legally available therefor, with respect to any Preferred Securities
called for redemption or repurchase, as the case may be, by the Trust, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Trust (other than in connection with the distribution of Debentures to the
Holders in exchange for Preferred Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions and premiums, if any, on the Preferred Securities to the
date of payment, to the extent the Trust shall have funds 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 an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of the holders of the
Common Securities to receive Guarantee Payments under the Common Securities
Guarantee Agreement are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments.
"Guarantor" shall mean Crown Media Holdings, Inc., a Delaware
corporation, or any permitted successor thereof under the Indenture, in its
capacity as guarantor under this Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and
records of the Trust, 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 Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of December 17, 2001
among Crown Media Holdings, Inc., a Delaware corporation (the "Debenture
Issuer"), and JPMorgan Chase Bank, as trustee, and any indenture supplemental
thereto pursuant to which certain subordinated debt securities of the Debenture
Issuer (the "Debentures") are to be issued to the Property Trustee of the Trust.
"Issue Date" means December 17, 2001.
"Majority in Liquidation Amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, Holder(s) of Preferred
Securities voting separately as a class, who vote Preferred Securities and the
aggregate liquidation amount
3
(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 the Preferred Securities voted by such
Holders represents more than 50% of the above stated liquidation amount of all
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the 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
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.
"Preferred Guarantee Trustee" means JPMorgan Chase Bank until
a Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer of the Preferred Guarantee Trustee with direct
responsibility for the administration of this Guarantee Agreement. 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.
"Senior Indebtedness" shall have the meaning set forth in the
Indenture.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
4
Any reference to a party hereto shall include the successors
and permitted assigns of such party.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Securities
Trustee (i) within 14 days after January 1 and July 1 of each year, a list, in
such form as the Preferred Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such 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 Preferred 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 as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee.
The Preferred Guarantee Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders; and
(b) the Preferred 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 PREFERRED GUARANTEE TRUSTEE.
Within 60 days after May 15 of each year commencing May 2002,
the Preferred Guarantee Trustee shall provide to the Holders of the Preferred
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 Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance
5
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.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Guarantee Agreement which relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, 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 any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, promptly upon the
occurrence of an Event of Default known to the Preferred Guarantee Trustee,
transmit by facsimile and first class mail, postage prepaid, to the Holders of
the Preferred Securities, notices of all such defaults with respect to the
Preferred Securities known to the Preferred Guarantee Trustee, unless the
default to which such Event of Default relates has been cured before the giving
of such notice; provided, however, that for the purposes of this Section 2.7(a),
an Event of Default shall not include any periods of grace provided for therein
and irrespective of the giving of any notice provided therein.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default except any Event of Default as to which
the Preferred Guarantee Trustee shall have received written notice or of which a
Responsible Officer shall have obtained written notice.
SECTION 2.8 CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described
in this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities and
the Preferred Guarantee Trustee shall not transfer this Guarantee Agreement to
any Person except a Holder of Preferred Securities exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment to
act as Preferred Guarantee Trustee. The right, title and interest of the
Preferred Guarantee Trustee shall automatically vest in any Successor Preferred
Guarantee Trustee and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Preferred Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Preferred Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Preferred 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 Preferred
Guarantee Trustee shall be determined solely by the express provisions of this
Guarantee Agreement, and the Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no implied covenants or obligations
shall be read into this Guarantee Agreement against the Preferred Guarantee
Trustee; and
(B) (i) in the absence of bad faith on the part
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as
7
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement; but in
the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Declaration;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by the Preferred Guarantee Trustee,
unless it shall be proved that the Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Preferred 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 at the time
outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Preferred Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Preferred 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 it shall have
reasonable ground for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may 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;
(ii) any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever in the administration of this Guarantee
Agreement, the Preferred Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed)
8
may, in the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Guarantor;
(iv) the Preferred 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 Preferred Guarantee Trustee may consult with
counsel 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
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee adequate security
and indemnity, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee provided, that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement;
(vii) the Preferred 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 Preferred Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit;
(viii) the Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Preferred 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) any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred Securities and
the signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Preferred Guarantee Trustee to so
act, or as to its compliance with any of the terms
9
and provisions of this Guarantee Agreement, both of which shall be conclusively
evidenced by the Preferred Guarantee Trustee's or its agent's taking such
action; and
(x) whenever in the administration of this Guarantee
Agreement the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in Liquidation Amount of the Preferred
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 acting in accordance with such instructions; and
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Preferred 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
Preferred 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 Preferred Guarantee Trustee shall be construed to be a duty.
(c) No provision of this Guarantee Agreement shall be deemed
to empower the Preferred Guarantee Trustee to vary the investment of any Holder
of the Preferred Securities or to act in a manner inconsistent with the status
of the Trust as a grantor trust for federal income tax purposes.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representations as to the validity or sufficiency of
this Guarantee Agreement.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) be a "United States person" under the Internal
Revenue Code of 1986, as amended, and not be an Affiliate of the Guarantor;
(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
10
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 250 million U.S. dollars ($250,000,000), 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 Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c); and
(c) if the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred 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 PREFERRED GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the holders of a
Majority in Liquidation Amount of the Preferred Securities, or by the Guarantor
with the prior written consent of such Holders;
(b) the Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor;
(c) the Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee;
and
(d) if no Successor Preferred 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 Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a
11
Successor Preferred Guarantee Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Trust may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred 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, liquidation distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
12
(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
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 on the Holders or any other
Person 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 any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Guarantee Agreement;
and
(b) notwithstanding the rights of the Preferred Guarantee
Trustee to enforce this Guarantee Agreement under Article III, any Holder of
Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce the Preferred Guarantee Trustee's rights under this
Guarantee Agreement, without first instituting a legal proceeding against the
Trust, the Preferred Guarantee Trustee or any other Person. The Guarantor waives
any right or remedy to require that any action 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 Agreement creates a guarantee of payment and
not of collection.
SECTION 5.6 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Trust in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor
13
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 AGREEMENT TO SUBORDINATE.
The Guarantor covenants and agrees, and each Holder of
Preferred Securities hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that the Preferred Securities shall be issued subject to
the provisions of this Article VI.
The payment by the Guarantor and all amounts required
hereunder, shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Guarantor, whether outstanding at the Issue Date or
thereafter incurred.
No provision of this Article VI shall prevent the occurrence
of any Default or Event of Default hereunder, nor the rights of the Preferred
Guarantee Trustee or any Holder to exercise such rights and remedies afforded to
each of them under this Guarantee Agreement with respect to any provision of
this Guarantee Agreement.
SECTION 6.2 DEFAULT ON SENIOR INDEBTEDNESS.
In the event that (a) any payment of principal, interest or
any other payment due on any Senior Indebtedness is not paid by the Guarantor
when due, any applicable grace period with respect to any such payment default
has ended and such default has not been cured, waived or ceased to exist, (b)
any other default occurs and is continuing with respect to Senior Indebtedness
that permits holders of the Senior Indebtedness as to which such default relates
to accelerate its maturity and the Preferred Guarantee Trustee receives notice
of such default (a "Payment Blockage Notice") from the Guarantor or any other
Person permitted to give such notice (including without
14
limitation any representative of any holder of Senior Indebtedness); or (c) in
the event that the maturity of any Senior Indebtedness of the Guarantor has been
accelerated because of a default, then, in any such case, no payment shall be
made by the Guarantor with respect to distributions on the Preferred Securities.
Payments on the Guarantee shall be resumed: (1) in the case of a payment default
on any Senior Indebtedness, upon the date on which such default is cured or
waived; and (2) in case of a nonpayment default, the earlier of the date on
which that default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received; provided, however, that payments
on the Guarantee shall not resume if the maturity of any Senior Indebtedness has
been accelerated. A new Payment Blockage Notice may be delivered if 180 days
have elapsed since the delivery of the immediately prior Payment Blockage Notice
so long as such Payment Blockage Notice relates to a default under Senior
Indebtedness that has not been the subject of any prior Payment Blockage Notice.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Preferred Guarantee Trustee or any Holder from the
Guarantor when such payment is prohibited by the preceding paragraph of this
Section 6.2, such payment shall be deemed to be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior Indebtedness
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Preferred Guarantee Trustee and the
Guarantor in a written notice within 90 days of the date on which such payments
are disbursed by the Preferred Guarantee Trustee of the amounts then outstanding
under the Senior Indebtedness, plus accrued interest thereon, and only the
amounts specified in such notice to the Preferred Guarantee Trustee and the
Guarantor shall be paid to the holders of Senior Indebtedness.
SECTION 6.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment by the Guarantor or distribution of assets of
the Guarantor of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due on all
Senior Indebtedness of the Guarantor, shall first be paid in full, or payment
thereof provided for in cash in accordance with its terms, before any payment is
made by the Guarantor, on account of the Guarantee Payments; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Guarantor or distribution of assets of the Guarantor of any kind or character,
whether in cash, property or securities, which the Holders of the Preferred
Securities or the Preferred Guarantee Trustee would be entitled to receive from
the Guarantor, except for the provisions of this Article VI, shall be paid by
the Guarantor, or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Preferred Securities or by the Preferred Guarantee Trustee under this
Guarantee Agreement if received by them or it, directly to the holders of Senior
Indebtedness of the Guarantor (pro rata to such
15
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Guarantor) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full in cash, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any such payment or distribution is made to or retained by the Holders of
Preferred Securities or to the Preferred Guarantee Trustee.
In the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Guarantor of any kind or character,
whether in cash, property or securities, prohibited by the foregoing, shall be
received by the Preferred Guarantee Trustee or the Holders of the Preferred
Securities before all Senior Indebtedness of the Guarantor is paid in full, or
provision is made for such payment in cash in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Guarantor, for application to the payment of all Senior Indebtedness of
the Guarantor, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in cash in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Guarantor as
reorganized or readjusted, or securities of the Guarantor or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
VI with respect to the Guarantee Payments to the payment of all Senior
Indebtedness of the Guarantor, that may at the time be outstanding, provided
that (i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation,
amalgamation or merger of the Guarantor with or into, another Person or the
liquidation or dissolution of the Guarantor following the conveyance, transfer,
lease or other disposition of its property as an entirety, or substantially as
an entirety, to another Person upon the terms and conditions provided for in
Article X of the Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 6.3 if such other
Person shall, as a part of such consolidation, amalgamation, merger, conveyance,
transfer, lease or other disposition, comply with the conditions stated in
Article X of the Indenture.
SECTION 6.4 SUBROGATION.
Subject to the payment in full of all Senior Indebtedness of
the Guarantor, the rights of the Holders of the Preferred Securities shall be
subrogated to the rights of the
16
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Guarantor, applicable to such Senior
Indebtedness until the principal of and interest on, the Preferred Securities
shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders for such Senior Indebtedness of any cash, property
or securities to which the Holders of the Preferred Securities or the Preferred
Guarantee Trustee would be entitled except for the provisions of this Article
VI, and no payment over pursuant to the provisions of this Article VI, to or for
the benefit of the holders of such Senior Indebtedness by Holders of the
Preferred Securities, shall, as between the Guarantor, its creditors other than
holders of Senior Indebtedness of the Guarantor, and the Holders of the
Preferred Securities, be deemed to be a payment by the Guarantor, to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article VI are and are intended solely for the purposes of defining the
relative rights of the Holders of the Preferred Securities, on the one hand, and
the holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article VI or elsewhere in this
Guarantee Agreement or in the Preferred Securities is intended to or shall
impair, as between the Guarantor, its creditors other than the holders of Senior
Indebtedness of the Guarantor and the Holders of the Preferred Securities, the
obligation of the Guarantor, which is absolute and unconditional, to pay to the
Holders of the Preferred Securities distributions on, the Preferred Securities
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders of
the Preferred Securities and creditors of the Guarantor, other than the holders
of Senior Indebtedness of the Guarantor, nor shall anything herein or therein
prevent the Preferred Guarantee Trustee or the Holder of any Preferred
Securities from exercising all remedies otherwise permitted by applicable law
upon default under this Guarantee Agreement, subject to the rights, if any,
under this Article VI of the holders of such Senior Indebtedness in respect of
cash, property or securities of the Guarantor, received upon the exercise of any
such remedy.
Upon any payment or distribution of assets of the Guarantor
referred to in this Article VI, the Preferred Guarantee Trustee and the Holders
of the Preferred Securities, shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Preferred
Guarantee Trustee or to the Holders of the Preferred Securities, for the
purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article VI.
SECTION 6.5 INDENTURE TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Preferred Securities by such Holder's
acceptance thereof authorizes and directs the Preferred Guarantee Trustee on
such Holder's behalf to take
17
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article VI and appoints the Preferred Guarantee Trustee such
Holder's attorney-in-fact for any and all such purposes.
SECTION 6.6 NOTICE BY THE GUARANTOR.
The Guarantor shall give prompt written notice to a
Responsible Officer of the Preferred Guarantee Trustee, with a copy to the
Administrative Agent, of any fact known to the Guarantor that would prohibit the
making of any payment of monies to or by the Preferred Guarantee Trustee in
respect of the Guarantee Payments pursuant to the provisions of this Article VI.
The Guarantor shall deliver to the Administrative Agent a copy of any notice
delivered by the Guarantor pursuant to this Guarantee Agreement. Notwithstanding
the provisions of this Article VI or any other provision of this Guarantee
Agreement, the Preferred Guarantee Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment of
monies to or by the Preferred Guarantee Trustee in respect of the Guarantee
Payments pursuant to the provisions of this Article VI, unless and until a
Responsible Officer of the Preferred Guarantee Trustee shall have received
written notice thereof at the Corporate Trust Office of the Preferred Guarantee
Trustee from the Guarantor or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Preferred Guarantee Trustee, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Preferred Guarantee Trustee
shall not have received the notice provided for in this Section 6.6 at least two
Business Days prior to the date upon which by the terms hereof any cash may
become payable for any purpose (including, without limitation, the payment of
the liquidation amount of or distribution on, any Security), then, anything
herein contained to the contrary notwithstanding, the Preferred Guarantee
Trustee shall have full power and authority to receive such cash and to apply
the same to the purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.
The Preferred Guarantee Trustee shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness of the Guarantor (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Preferred Guarantee Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article VI, the Preferred Guarantee Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Preferred Guarantee
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article VI, and if such evidence is not furnished, the Preferred Guarantee
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
18
SECTION 6.7 RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS.
The Preferred Guarantee Trustee in its individual capacity
shall be entitled to all the rights set forth in this Article VI, in respect of
any Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Guarantee Agreement shall
deprive the Preferred Guarantee Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Guarantor, the Preferred Guarantee Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in this
Article VI, and no implied covenants or obligations with respect to the holders
of such Senior Indebtedness shall be read into this Guarantee Agreement against
the Preferred Guarantee Trustee. The Preferred Guarantee Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and
the Preferred Guarantee Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of the Preferred
Securities, the Guarantor or any other Person cash or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article VI or
otherwise.
SECTION 6.8 SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior
Indebtedness of the Guarantor to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Guarantor, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Guarantor, with the terms,
provisions and covenants of this Guarantee Agreement, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Guarantor may, at any time
and from time to time, without the consent of or notice to the Preferred
Guarantee Trustee or the Holders of the Preferred Securities, without incurring
responsibility to the Holders of the Preferred Securities and without impairing
or releasing the subordination provided in this Article VI or the obligations
hereunder of the Holders of the Preferred Securities to the holders of such
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement under
which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Guarantor and any other Person.
19
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION.
This Guarantee Agreement shall terminate upon full payment of
the Redemption Price of all Preferred Securities, upon the distribution of the
Debentures to the Holders of all of the Preferred Securities or upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Preferred Securities must restore payment of
any sums paid under the Preferred Securities or under this Preferred Securities
Guarantee.
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
Guarantee Agreement and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person by
this Guarantee Agreement 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; and
(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 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 (as defined in the Declaration) to
Holders of Preferred Securities might properly be paid.
SECTION 8.2 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission
20
performed or omitted by such Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by this in accordance with this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.2(a).
The provisions of this Section 8.2 shall survive termination
of this Guarantee Agreement or the resignation or removal of the Preferred
Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 AMENDMENTS.
Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the prior approval
of the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3 NOTICES.
All notices provided for in this Guarantee Agreement 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:
(a) if given to the Preferred Guarantee Trustee at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the
21
Preferred Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
(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):
Crown Media Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) if given to any Holder of Preferred Securities, 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 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 Guarantee Agreement 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 GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
22
IN WITNESS WHEREOF, the Guarantor and the Preferred Guarantee
Trustee have executed this
Preferred Securities Guarantee Agreement as of the
day and year first above written.
CROWN MEDIA HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
JPMORGAN CHASE BANK,
as Preferred Guarantee Trustee
By: /s/ ▇▇▇▇▇ ▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇
Title: Vice President
23