Exhibit 4.32
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GUARANTEE AGREEMENT
▇▇▇▇▇▇ Brothers Holdings Capital Trust __
Dated as of _______ __, ____
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CROSS REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a)..................................................................4.1(a)
310(b).............................................................2.8; 4.1(c)
310(c)............................................................Inapplicable
311(a)..................................................................2.2(b)
311(b)..................................................................2.2(b)
311(c)............................................................Inapplicable
312(a).............................................................2.2(a); 2.9
312(b).............................................................2.2(b); 2.9
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)
316(b).................................................................... 5.3
316(c)........................................................... Inapplicable
317(a)....................................................................2.10
317(b)............................................................Inapplicable
318(a)..................................................................2.1(b)
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* This Cross-Reference Table does not constitute part of the Agreement and
shall not have any bearing upon the interpretation of any of its terms or
provisions.
TABLE OF CONTENTS
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ARTICLE 1 INTERPRETATION AND DEFINITIONS.....................................1
SECTION 1.1 Interpretation and Definitions.............................1
ARTICLE 2 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 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.........................6
SECTION 2.7 Guarantee Event of Default; Notice.........................6
SECTION 2.8 Conflicting Interests......................................6
SECTION 2.9 Disclosure of Information..................................6
SECTION 2.10 Guarantee Trustee May File Proofs of Claim................7
ARTICLE 3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE.....................7
SECTION 3.1 Powers and Duties of Guarantee Trustee.....................7
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
ARTICLE 5 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
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SECTION 5.5 Guarantee of Payment......................................14
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 Subordination of Common Securities........................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...................................................17
SECTION 9.5 Governing Law.............................................18
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of _______ __,
_____, is executed and delivered by ▇▇▇▇▇▇ Brothers Holdings Inc., a Delaware
corporation (the "Guarantor"), and The Chase Manhattan Bank, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Securities (as defined herein) of ▇▇▇▇▇▇ Brothers Holdings
Capital Trust __, 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
may issue up to $________ aggregate liquidation amount of preferred securities,
having a liquidation amount of $___ per security and designated the ___%
Preferred Securities of the Trust (the "Preferred Securities") and up to
$________ aggregate liquidation amount of common securities, having a
liquidation amount of $___ per security and designated the ___% Common
Securities of the Trust (the "Common Securities" and, together with the
Preferred 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; and that if a Trust Enforcement Event (as
defined herein) 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 Preferred Securities to receive
Guarantee Payments under this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.
SECTION 1
INTERPRETATION AND DEFINITIONS
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;
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(d) all references in this Guarantee to Articles, Sections and
Recitals are to Articles, Sections and Recitals of this Guarantee, unless
otherwise specified;
(e) unless otherwise defined in this Guarantee, a term defined in
the Trust Indenture Act has the same meaning when used in this Guarantee;
(f) a reference to the singular includes the plural and vice versa
and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable; and
(g) the following terms have the following meanings:
"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 specified in the Declaration.
"Common Securities" has the meaning specified in the Recitals
hereto.
"Corporate Trust Office" means the principal office of the Guarantee
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Guarantee is located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means a Holder or beneficial owner of Securities.
"Debentures" means the series of subordinated deferrable interest
debentures to be issued by the Guarantor designated the ___% Subordinated
Deferrable Interest Debentures due 20__ 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 ______ __, ____, 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.
"Global Security" means a fully registered, global Preferred
Security.
"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 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 has sufficient funds available therefor at the time, (ii)
the redemption price, including all accumulated 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 sufficient funds available therefor at
the time or (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the
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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 accumulated and unpaid Distributions on the Securities to the date of
payment, to the extent the Trust has sufficient funds 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").
"Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" means any holder of Securities, as registered on the books
and records of the Trust; provided, however, that, in determining whether the
Holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor or any other obligor on the
Preferred Securities; and provided further, that in determining whether the
Holders of the requisite liquidation amount of Preferred 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 Preferred
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 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 February 1, 1996,
between the Guarantor (the "Company") and The Chase Manhattan Bank, formerly
known as Chemical Bank, as trustee, as amended and supplemented by the First
Supplemental Indenture dated as of February 1, 1996, the Second Supplemental
Indenture dated as of January 26, 1999, the Third Supplemental Indenture dated
as of April 20, 1999 and by any other 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" means, except as provided in the
terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
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.
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"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person 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;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person 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 on behalf of such Person 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
acting on behalf of such Person, 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 Securities" has the meaning specified in the Recitals
hereto.
"Redemption Price" has the meaning specified in the Declaration.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer 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.
"Securities" has the meaning specified in the Recitals hereto.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Enforcement Event" in respect of the Securities means an
Indenture Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
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SECTION 2
TRUST INDENTURE ACT
2.1. Trust Indenture Act; Application. (a) 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.
2.2. Lists of Holders of Securities. (a) The Guarantor shall provide the
Guarantee Trustee (i) except while the Preferred Securities are represented by
one or more Global Securities at least one Business Day prior to the date for
payment of Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders") as of the record date relating to the payment of such
Distributions, and (ii) at any other time, 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 more than 15 days before such List of Holders is given to the
Guarantee Trustee; provided that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Guarantee Trustee by the Guarantor. 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 the Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
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.
2.4. Periodic Reports to Guarantee Trustee. The Guarantor shall provide to
the Guarantee Trustee such documents, reports and information as required by
Section 314(a) (if any) of the Trust Indenture Act and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314(a) of the Trust Indenture
Act.
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.
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2.6. Guarantee Event of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Securities may, by vote or written consent, on behalf
of the Holders of all of the Securities, waive any past Guarantee Event of
Default and its consequences. Upon such waiver, any such Guarantee Event of
Default shall cease to exist, and any 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.
2.7. Guarantee Event of Default; Notice. (a) The Guarantee Trustee shall,
within 90 days after the occurrence of a Guarantee Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Securities, 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, that the Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(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.
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 proviso contained in Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the penultimate paragraph of Section 310(b) of the Trust
Indenture Act. In determining whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act with respect to the
Securities or the Guarantees in respect of such Securities, there shall be
excluded (i) all series of securities issued or issuable under the Indenture,
(ii) (A) the Guarantee Agreement, dated as of January 26, 1999, executed and
delivered by ▇▇▇▇▇▇ Brothers Holdings Inc. and The Chase Manhattan Bank for the
benefit of the holders identified therein of ▇▇▇▇▇▇ Brothers Capital Trust I,
(B) the Guarantee Agreement, dated as of April 4, 1999, executed and delivered
by ▇▇▇▇▇▇ Brothers Holdings Inc. and The Chase Manhattan Bank for the benefit of
the holders identified herein of ▇▇▇▇▇▇ Brothers Capital Trust II and (C) [add
future Guarantee Agreements when executed] and (iii) (A) the Amended and
Restated Declaration of Trust, dated as of January 26, 1999, by and among ▇▇▇▇▇▇
Brothers Holdings Inc., the Regular Trustees named therein, The Chase Manhattan
Bank, as initial Property Trustee and Chase Manhattan Bank Delaware, as initial
Delaware Trustee, (B) the Amended and Restated Declaration of Trust, dated as of
April 4, 1999, by and among ▇▇▇▇▇▇ Brothers Holdings Inc., the Regular Trustees
named therein, The Chase Manhattan Bank, as initial Property Trustee and Chase
Manhattan Bank Delaware, as initial Delaware Trustee and (C) [add future Amended
and Related Declarations of Trust when executed].
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
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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.
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.
SECTION 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
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 of the Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section
5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee 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 conveyance documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(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 of the Securities.
(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.
(d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
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(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 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee or if the Guarantee Trustee shall
have reasonable grounds for believing that an indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or
liability is not reasonably assured to it under the terms of this
Guarantee.
3.2. Certain Rights of Guarantee Trustee. (a) Subject to the provisions of
Section 3.1:
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(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by
the Guarantor;
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration or any instrument (or any
rerecording, refiling or re-registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the
advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration
of this Guarantee from any court of competent jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
at the request or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Guarantee Trustee; provided, 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;
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(viii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents, nominees, custodians or attorneys, and the
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, 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; and
(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 written
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 written instructions are
received and (iii) shall be protected in conclusively relying on or
acting in accordance with such written 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 to act in accordance
with applicable law, to perform any such act or acts or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a duty.
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.
SECTION 4
GUARANTEE TRUSTEE
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
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Columbia, or a corporation or other 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.
4.2. Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.2(b), unless a Guarantee Event of Default
shall have occurred and be continuing, the Guarantee Trustee may be
appointed or removed with or without cause at any time by the Guarantor.
(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 or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by 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 removal or resignation, the
removed or 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.
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(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this 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 for fees and reimbursement
of expenses which have accrued to the date of such termination, removal or
resignation.
SECTION 5
GUARANTEE
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 that 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. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
(i) extend the interest payment period on the Debentures and the Guarantor shall
not be obligated hereunder to make any Guarantee Payments during any Extension
Period (as defined in the certificate evidencing the Debentures) with respect to
the Distributions (as defined in the Declaration) on the Securities and (ii)
change the maturity date of the Debentures to the extent permitted by the
Indenture.
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, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
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;
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(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 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, it
being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the 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.
5.4. Rights of Holders.
(a) The Holders of at least 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 to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under this Guarantee.
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(b) If the Guarantee Trustee fails to enforce this Guarantee, then
any Holder of Securities 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 or entity. In addition, if the Guarantor has
failed to make a Guarantee Payment, a Holder of Securities 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 Securities 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.
5.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Securities 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.
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.
SECTION 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
6.1. Limitation of Transactions.
So long as any Securities remain outstanding, if (i) there shall
have occurred an event of default under the Indenture with respect to the
Debentures, (ii) there shall be a Guarantee Event of Default or (iii) the
Guarantor shall have given notice of its election of an
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Extension Period as provided in the certificate evidencing the Debentures and
shall not have rescinded such notice, or such Extension Period or any extension
thereof shall be continuing, then the Guarantor shall not, and shall not permit
any subsidiary of the Guarantor, to (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (y) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Guarantor that rank on a parity with or junior in
interest to the Debentures or 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 on a parity with or junior in interest to the
Debentures (other than (a) dividends or distributions in common stock of the
Guarantor, (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 stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit plans).
6.2. Ranking.
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, (ii) on a parity with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred securities of any Affiliate of the Guarantor and (iii) senior to the
Guarantor's common stock. In addition, at all times such obligations will be
structurally subordinated to the liabilities and obligations of the Guarantor's
subsidiaries.
6.3. Subordination of Common Securities.
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 Preferred Securities to receive Guarantee Payments under this Guarantee.
SECTION 7
TERMINATION
7.1. Termination.
This Guarantee shall terminate upon (i) full payment of the
Redemption Price of all Securities, (ii) distribution of the Debentures to the
Holders of 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
16
reinstated, as the case may be, if at any time any Holder of Securities must
restore payment of any sums paid under the Securities or under this Guarantee.
SECTION 8
INDEMNIFICATION
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, liability, expense 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 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 of
Securities might properly be paid.
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.
SECTION 9
MISCELLANEOUS
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.
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9.2. Amendments.
Except with respect to any changes that do not materially 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 66-2/3% of the aggregate 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.
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 by hand,
telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Guarantor and the Holders of the
Securities):
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: _________________
Telecopy no.: (212) ________
(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 of the Securities):
▇▇▇▇▇▇ Brothers Holdings Inc.
1 World Financial Center
New York, New York 10281
Attention: Corporate Counsel
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If given to any Holder of 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.
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.
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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.
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.,
as Guarantor
By:_______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK
as Guarantee Trustee
By:_______________________________________
Name:
Title: