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PREFERRED SECURITIES GUARANTEE AGREEMENT
BEAR ▇▇▇▇▇▇▇ CAPITAL TRUST III
Dated as of May 10, 2001
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CROSS-REFERENCE TABLE
Trust Preferred
Indenture Securities
Act Section Guarantee Section
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310 (a)................................................ 4.1(a)
(b)................................................ 4.1(c)
(c)................................................ Not Applicable
311 (a)................................................ 2.2(b)
(b)................................................ 2.2(b)
(c)................................................ Not Applicable
312 (a)................................................ 2.2(a)
(b)................................................ 2.2(b)
313 ................................................... 2.3
314 (a)................................................ 2.4
(b)................................................ Not Applicable
(c)................................................ 2.5
(d)................................................ Not Applicable
(f)................................................ Not Applicable
315 (a)................................................ 3.2(a)
(b)................................................ 2.7
(c)................................................ 3.1(c)
(d)................................................ 3.1(d)
316 (a)................................................ 5.4(a), 2.6
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Preferred Securities Guarantee.
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application...............................4
Section 2.2 Lists of Holders of Securities.................................5
Section 2.3 Reports by the Guarantee Trustee...............................5
Section 2.4 Periodic Reports to Guarantee Trustee..........................5
Section 2.5 Evidence of Compliance with Conditions Precedent...............5
Section 2.6 Events of Default; Waiver......................................5
Section 2.7 Events of Default; Notice......................................5
Section 2.8 Conflicting Interests..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee.....................6
Section 3.2 Certain Rights of Guarantee Trustee............................8
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.........................................9
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee; Eligibility................................10
Section 4.2 Appointment, Removal and Resignation of Guarantee Trustee.....10
ARTICLE V
GUARANTEE
Section 5.1 Preferred Securities Guarantee................................11
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Section 5.2 Waiver of Notice and Demand...................................11
Section 5.3 Obligations Not Affected......................................11
Section 5.4 Rights of Holders.............................................12
Section 5.5 Guarantee of Payment..........................................13
Section 5.6 Subrogation...................................................13
Section 5.7 Independent Obligations.......................................13
Section 5.8 Consolidation, Merger, Sale of Assets and Other Transactions..13
ARTICLE VI
SUBORDINATION
Section 6.1 Ranking.......................................................14
ARTICLE VII
TERMINATION
Section 7.1 Termination...................................................14
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation...................................................14
Section 8.2 Indemnification...............................................15
Section 8.3 Compensation; Reimbursement of Expenses.......................15
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns........................................15
Section 9.2 Amendments....................................................16
Section 9.3 Notices.......................................................16
Section 9.4 Benefit.......................................................16
Section 9.5 Governing Law.................................................16
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PREFERRED SECURITIES GUARANTEE AGREEMENT
PREFERRED SECURITIES GUARANTEE AGREEMENT, dated as of May 10, 2001
(the "Preferred Securities Guarantee") is executed and delivered by The Bear
▇▇▇▇▇▇▇ Companies Inc., a Delaware corporation (the "Guarantor"), and The Chase
Manhattan Bank, a New York State banking corporation, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Bear ▇▇▇▇▇▇▇ Capital Trust
III, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated
as of May 10, 2001 (the "Trust Agreement"), among the trustees named therein of
the Issuer, the administrators named therein, The Bear ▇▇▇▇▇▇▇ Companies Inc.,
as depositor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date hereof
10,500,000 shares ($262,500,000 aggregate Liquidation Amount) of 7.80% Trust
Issued Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of Preferred Securities the Guarantee Payments (as defined herein) and
to make certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a common
securities guarantee agreement (the "Common Securities Guarantee") in similar
terms to this Preferred Securities Guarantee for the benefit of the holders of
the Common Securities (as defined in the Trust Agreement) of the Issuer, except
that if an Event of Default (as defined in the Trust Agreement), has occurred
and is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments under
this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation. In this Preferred
Securities Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(e) terms defined in the Trust Agreement as at the date of
execution of this Preferred Securities Guarantee or in the Trust Indenture Act
as the case may be, have the same meanings when used in this Preferred
Securities Guarantee, unless otherwise defined in this Preferred Securities
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Corporate Trust Office" means the office of the Guarantee Trustee
at which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Preferred Securities Guarantee is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the junior subordinated debentures of The Bear
▇▇▇▇▇▇▇ Companies Inc. designated the 7.80% Junior Subordinated Deferrable
Interest Debentures due May 15, 2031 held by the Property Trustee (as defined in
the Trust Agreement) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Existing Indenture" means the Indenture, dated as of January 29,
1997, between the Guarantor and The Chase Manhattan Bank, as trustee, as amended
or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) which are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price, including all accumulated and unpaid Distributions to the
date of redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Trust Agreement), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
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available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantees" means the Common Securities Guarantee and this
Preferred Securities Guarantee, collectively.
"Guarantee Trustee" means The Chase Manhattan Bank, a New York State
banking corporation, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Guarantee Trustee.
"Indenture" means the Indenture dated as of December 16, 1998,
between the Guarantor and The Chase Manhattan Bank, not in its individual
capacity but solely as trustee, and any indenture supplemental thereto pursuant
to which the Debentures are to be issued to the Property Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.
"Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting together as a class, but separately from the holders of
Common Securities, of more than 50% of the aggregate Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities then outstanding.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board or any Vice Chairman of the Board or the President or any Executive
Vice President or Chief Operating Officer or Chief Financial Officer of the
Depositor and by the Treasurer or an Assistant Treasurer or Controller or the
Secretary or an Assistant Secretary of the Depositor and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
Securities Guarantee (other than pursuant to Section 2.4) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
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(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Guarantees" means all other guarantees (if any) to be issued
by the Company with respect to capital securities (if any) to be issued by other
trusts to be established by the Company (if any).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer, any senior
trust officer, or other officer of the Corporate Trust Office of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Event of Default" means an "Event of Default" as defined in
the Trust Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. (a) This Preferred
Securities Guarantee is subject to the provisions of the Trust Indenture Act and
shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
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Section 2.2 Lists of Holders of Securities. (a) The Guarantor shall
provide the Guarantee Trustee (i) within five days after each record date for
payment of Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such record date, provided that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Guarantee Trustee by the Guarantor, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for a List of Holders,
which List of Holders shall be as of a date no more than 14 days before such
List of Holders is given to the Guarantee Trustee. The Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Guarantee Trustee. Not later than
January 15 of each year commencing January 15, 2002, the Guarantee Trustee shall
provide to the Holders of the Preferred Securities such reports dated as of the
immediately preceding November 15 as are required by Section 313(a) of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act. The Guarantor will
notify the Guarantee Trustee if and when any Preferred Securities are listed on
any exchange, interdealer quotation system or self-regulatory organization.
Section 2.4 Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders as applicable, such documents, reports and information (if any)
as required by Section 314 and the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, such compliance certificate
to be delivered annually on or before February 15 of each year beginning in
2002.
Section 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Preferred Securities
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in
the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Preferred Securities may, voting or consenting as a
class, on behalf of the Holders of all of the Preferred Securities, waive any
past Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
Section 2.7 Events of Default; Notice. (a) The Guarantee Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Preferred Securities,
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notices of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; provided, however, that, except in the case of a default in the
payment of a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or responsible officers of the
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice thereof from the Guarantor or a Holder, or a Responsible Officer of the
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained written notice thereof.
Section 2.8 Conflicting Interests. The Indenture and the securities
issued or to be issued thereunder; the Trust Agreement and the Trust Securities
issued or to be issued thereunder; any Preferred Securities Guarantee Agreement
relating to a Bear ▇▇▇▇▇▇▇ Trust (as defined in the Indenture and the Existing
Indenture) between the Guarantor and The Chase Manhattan Bank, as guarantee
trustee; any Amended and Restated Trust Agreement relating to a Bear ▇▇▇▇▇▇▇
Trust among the Guarantor, as depositor, The Chase Manhattan Bank, as property
trustee, Chase Manhattan Bank USA, National Association, or its predecessors, as
Delaware trustee, the administrators named therein and the several holders and
the Trust Securities issued and to be issued thereunder; and the Existing
Indenture and the securities issued or to be issued thereunder, shall be deemed
to be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the proviso contained in Section 310(b)(l) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee. (a) This
Preferred Securities Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Preferred Securities, and the Guarantee Trustee
shall not transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Preferred Securities Guarantee for the benefit of the Holders
of the Preferred Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
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this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Preferred Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that such Responsible Officer of the
Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Guarantee
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Trustee shall have reasonable grounds for believing that the repayment of
such funds is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
Section 3.2 Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the written advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel may
be counsel to the Guarantor or any of its Affiliates and may include any
of its employees. The Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided, however, that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
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(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(ix) Whenever in the administration of this Preferred Securities
Guarantee the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders of a Majority in Liquidation Amount of the Preferred
Securities, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(x) The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee. The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness. The Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee; Eligibility. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c). (c) If the Guarantee
Trustee has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act, subject to the penultimate paragraph thereof.
Section 4.2 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an Event of
Default.
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Guarantee Trustee.
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(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Guarantee Trustee all amounts owing to the Guarantee Trustee
under Sections 8.2 and 8.3 accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
Section 5.1 Preferred Securities Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the Issuer
may have or assert. Such obligations will not be discharged except by payment of
the Guarantee Payments in full. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
Section 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
Section 5.3 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
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(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4 Rights of Holders. (a) The Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting of any proceeding for any remedy available
to the Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Guarantee Trustee under this
Preferred Securities Guarantee; provided however, that (subject to Section 3.1)
the Guarantee Trustee shall have the right to decline to follow any such
direction if the Guarantee Trustee shall determine that the actions so directed
would be unjustly prejudicial to the Holders not taking part in such direction
or if the Guarantee Trustee being advised by counsel determines that the action
or proceedings directed may not lawfully be taken or if the Guarantor Trustee in
good faith by its board of directors or trustees, executive committees or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed would involve the Guarantee
Trustee in personal liability.
(b) Any Holder of Preferred Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Issuer, the Guarantee Trustee or any other Person. The Guarantor waives any
right or remedy to require that any such action be brought first against the
Issuer or any other Person before so proceeding directly against the Guarantor.
(c) The Guarantor expressly acknowledges that (i) this Preferred
Securities Guarantee will be deposited with the Guarantee Trustee to be held for
the benefit of the Holders and (ii) the Guarantee Trustee has the right to
enforce this Preferred Securities Guarantee on behalf of the Holders.
Section 5.5 Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection. This Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
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Section 5.6 Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Preferred Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
Section 5.7 Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
Section 5.8 Consolidation, Merger, Sale of Assets and Other Transactions.
The Guarantor shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the Guarantor
or convey, transfer or lease its properties and assets substantially as an
entirety to the Guarantor, unless (i) either the Guarantor shall be the
continuing corporation, or the successor shall be a Person organized under the
laws of the United States or any state or the District of Columbia, and such
successor Person expressly assumes the Guarantor's obligations under this
Preferred Securities Guarantee by written instrument in form satisfactory to the
Guarantee Trustee, (ii) immediately after giving effect thereto, no Event of
Default under this Preferred Securities Guarantee, and no event which, after
notice or lapse of time or both, would become an Event of Default under this
Preferred Securities Guarantee, shall have occurred and be continuing, and (iii)
such consolidation, merger, conveyance, transfer or lease shall be permitted
under the Trust Agreement and the Indenture and does not give rise to any breach
or violation of the Trust Agreement or Indenture.
ARTICLE VI
SUBORDINATION
Section 6.1 Ranking. This Preferred Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all present and future Senior Indebtedness of the Company
(as defined in the Indenture). This Preferred Securities Guarantee will rank
pari passu with all Other Guarantees. By their acceptance thereof, each Holder
of Preferred Securities agrees to the foregoing provisions of this Preferred
Securities Guarantee and the other terms set forth herein.
If a Trust Event of Default has occurred and is continuing, the rights of
holders of the Common Securities of the Issuer to receive payments under the
Common Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Preferred Securities Guarantee shall
terminate, subject to Sections 8.2 and 8.3, (i) upon full payment of the
Redemption Price of all Preferred Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Preferred Securities or (iii) upon full
payment of the amounts payable in accordance with the Trust Agreement upon
dissolution of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Issuer or the Guarantor and upon such information,
opinions, reports or statements presented to the Trust or the Guarantor by any
Persons to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Preferred Securities might properly be paid.
Section 8.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
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costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Guarantee
Trustee will not claim or exact any lien or charge on any Guarantee Payments as
a result of any amount due to it under this Preferred Securities Guarantee. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Preferred Securities Guarantee.
Section 8.3 Compensation; Reimbursement of Expenses. The Guarantor
agrees:
(a) to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by it in accordance with any provision of this
Preferred Securities Guarantee (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
The provisions of this Section 8.3 shall survive the termination of this
Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale or conveyance of the
Guarantor's assets to another entity or of another entity's assets to the
Guarantor, in each case, to the extent permitted under Section 5.8 of this
Preferred Securities Guarantee, the Guarantor may not assign its rights or
delegate its obligations under this Preferred Securities Guarantee without the
prior approval of the Holders of at least a Majority in Liquidation Amount of
the Preferred Securities.
Section 9.2 Amendments. Except with respect to any changes that do not
adversely affect the rights of Holders of Preferred Securities in any material
respect (in which case no consent of Holders will be required), this Preferred
Securities Guarantee may only be amended with the prior approval of the Holders
of a least a Majority in Liquidation Amount of the Preferred Securities.
The provisions of the Trust Agreement with respect to amendments thereof
apply to the giving of such approval.
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Section 9.3 Notices. All notices provided for in this Preferred
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class mail, as
follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's mailing
address set forth below (or such other address as the Guarantee Trustee may give
notice of to the Holders of the Preferred Securities):
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: 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 and to the Guarantee Trustee):
The Bear ▇▇▇▇▇▇▇ Companies Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4 Benefit. This Preferred Securities Guarantee is solely for
the benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
Section 9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
[SIGNATURE PAGE TO FOLLOW]
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This Preferred Securities Guarantee is executed as of the day and year
first above written.
THE BEAR ▇▇▇▇▇▇▇ COMPANIES INC.,
as Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
Title: Senior Vice President-Finance
and Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President