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EXHIBIT 4.7
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CONVERTIBLE PREFERRED SECURITIES GUARANTEE AGREEMENT
Titanium Metals Corporation
Dated as of November 20, 1996
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation . . . . . . . . . . . . . . 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application . . . . . . . . . . . . . 6
SECTION 2.02. Lists of Holders of Securities . . . . . . . . . . . . . . 6
SECTION 2.03. Reports by the Guarantee Trustee . . . . . . . . . . . . . 6
SECTION 2.04. Periodic Reports to the Guarantee Trustee . . . . . . . . 7
SECTION 2.05. Evidence of Compliance with Conditions Precedent . . . . . 7
SECTION 2.06. Event of Default; Waiver . . . . . . . . . . . . . . . . . 7
SECTION 2.07. Event of Default; Notice . . . . . . . . . . . . . . . . . 7
SECTION 2.08. Conflicting Interests . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Powers, Duties and Rights of
the Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee . . . . . . . . 8
SECTION 3.02. Certain Rights of the Guarantee Trustee . . . . . . . . . 10
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee . . 12
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ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . 13
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
Guarantee
SECTION 5.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.02. Waiver of Notice and Demand . . . . . . . . . . . . . . . . 15
SECTION 5.03. Obligations Not Affected . . . . . . . . . . . . . . . . . . 15
SECTION 5.04. Rights of Holders . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.05. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.07. Independent Obligations . . . . . . . . . . . . . . . . . . 17
SECTION 5.08. Conversion . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI
Limitation of Transactions; Ranking
SECTION 6.01. Limitation of Transactions . . . . . . . . . . . . . . . . . 18
SECTION 6.02. Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
Termination
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.02. Indemnification . . . . . . . . . . . . . . . . . . . . . . 20
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ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns . . . . . . . . . . . . . . . . . . 20
SECTION 9.02. Amendments . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.04. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . 22
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EXECUTION COPY
CONVERTIBLE PREFERRED SECURITIES GUARANTEE
AGREEMENT (this "Guarantee"), dated as of November
20, 1996, is executed and delivered by TITANIUM
METALS CORPORATION, a Delaware corporation (the
"Guarantor"), and THE CHASE MANHATTAN BANK, a New
York banking corporation as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Convertible
Preferred Securities (as defined herein) of TIMET
CAPITAL TRUST I, a Delaware statutory business trust
(the "Trust").
WHEREAS pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of November 20, 1996, among the trustees of
the Trust named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Trust, the Trust
is issuing on the date hereof 3,500,000 convertible preferred securities having
an aggregate liquidation amount of $175,000,000 (plus up to an additional
525,000 convertible preferred securities, having an aggregate liquidation
amount of $26,250,000 to cover over- allotments), designated the 6-5/8%
Convertible Preferred Securities, Beneficial Unsecured Convertible Securities
(BUCS) (the "Convertible Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Convertible Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Guarantee, to
guarantee the obligations of the Trust to the Holders of the Convertible
Preferred Securities on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by each
Holder of Convertible Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
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ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation. As used 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 1.01;
(b) terms defined in the Declaration as at the date
hereof have the same meaning when used in this Guarantee unless
otherwise defined in this Guarantee;
(c) a term defined anywhere in this Guarantee has the same
meaning throughout;
(d) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires;
(g) a reference to the singular includes the plural and
vice versa;
(h) a reference to any Person shall include its successors and
assigns;
(i) a reference to any agreement or instrument shall mean such
agreement or instrument, as supplemented, modified, amended, or
amended and restated, and in effect from time to time; and
(j) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and
any successor statute, law, rule or regulation.
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"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereto.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or in Chicago, Illinois are authorized or
required by any applicable law or executive order to close.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the global trust services business of the Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covered Person" means any Holder or beneficial owner of
Convertible Preferred Securities.
"Debentures" means the 6-5/8% Convertible Junior Subordinated
Debentures due 2026 of the Guarantor held by the Property Trustee (as defined
in the Declaration).
"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 Convertible Preferred
Securities, to the extent not paid or made by the Trust: (i) any accumulated
and unpaid Distributions (as defined in the Declaration) that are required to
be paid on the Convertible Preferred Securities to the extent the Trust has
funds available therefor, (ii) the redemption price with respect to any
Convertible Preferred Securities called for redemption by the Trust (the
"Redemption Price") to the extent the Trust has funds available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding up or termination of
the Trust (other than in connection with the distribution of Convertible
Subordinated Debentures to the Holders of Convertible Preferred Securities or
the redemption of all the Convertible Preferred Securities (as provided for in
the Declaration)), the lesser of (a) the aggregate liquidation amount and all
accrued and unpaid Distributions on the
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Convertible Preferred Securities to the date of payment to the extent the Trust
has funds available therefor and (b) the amount of assets of the Trust
remaining available for distribution to Holders of Convertible Preferred
Securities upon the 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" shall mean any holder, as registered on the books and
records of the Trust, of Convertible Preferred Securities; provided, however,
that in determining whether the holders of the requisite percentage of
Convertible 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 November 20, 1996,
among the Guarantor and The Chase Manhattan Bank, a New York banking
corporation, as trustee, pursuant to which the Debentures are to be issued to
the Property Trustee of the Trust.
"Indenture Trustee" means the Person acting as trustee under
the Indenture, initially The Chase Manhattan Bank.
"Majority in liquidation amount of the Convertible Preferred
Securities" means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of Convertible Preferred Securities, voting separately as a class, of
more than 50% of the aggregate liquidation amount of all Convertible Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with
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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 definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"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 vice president, any assistant vice president, the treasurer, any
assistant treasurer, the secretary, any assistant secretary, any trust officer
or assistant trust officer or any other officer in 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
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
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ARTICLE II
Trust Indenture Act
SECTION 2.01. 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.
SECTION 2.02. List of Holders of Securities. (a) The
Guarantor shall provide the Guarantee Trustee with a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders of the Convertible Preferred Securities ("List of Holders"). The List
of Holders as of February 15 and August 15 of each year shall be provided five
Business Days after such dates, and the List of Holders shall also be provided
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders, such List of Holders as of a date no more than
14 days before such List of Holders is given to the Guarantee Trustee.
Notwithstanding the foregoing, the Guarantor shall not be obligated to provide
such List of Holders at any time (x) the List of Holders does not differ from
the most recent List of Holders given to the Guarantee Trustee by the Guarantor
or (y) all of the Convertible Preferred Securities are represented by one or
more Global Securities (as defined in the Indenture). 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.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60
days after May 15 of each year, the Guarantee Trustee shall provide to the
Holders of the Convertible Preferred Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with
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the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act, if any, and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence
of compliance with any conditions precedent, if any, provided for in this
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Event of Default; Waiver. The Holders of a
Majority in liquidation amount of Convertible Preferred Securities may, by
vote, on behalf of the Holders of all of the Convertible Preferred Securities,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been permanently cured, for every purpose of
this Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice. (a) The Company
will deliver to the Guarantee Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not, to the best knowledge of the signers
thereof, the Company is in default in the performance and observance of any of
the material terms, provisions and conditions of the Indenture (without regard
to any period of grace or requirement of notice provided thereunder) and, if
the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
(b) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by
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mail, first class postage prepaid, to the Holders of the Convertible Preferred
Securities, notices of all Events of Default actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice; provided that the Guarantee Trustee shall be fully
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 Convertible Preferred
Securities.
(c) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or unless a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have obtained
actual knowledge of such Event of Default.
SECTION 2.08. 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.
ARTICLE III
Powers, Duties and Rights of
the Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee for the benefit of
the Holders of the Convertible Preferred Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder exercising his
or her rights pursuant to Section 5.04(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, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered in connection with 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
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Guarantee for the benefit of the Holders of the Convertible Preferred
Securities.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after all Events of Default that may have occurred have been
cured or waived, 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 an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06) 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 individual 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 wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
all such Events of Default that may have occurred have been cured or
waived:
(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, and shall be fully protected in relying, 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
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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) none of the Guarantee Trustee, its officers, directors,
employees or agents shall 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 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 Convertible 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
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 (A) 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 (B) indemnity satisfactory to the
Guarantee Trustee against such risk or liability is not reasonably
assured to it.
SECTION 3.02. Certain Rights of the Guarantee Trustee. (a)
Subject to the provisions of Section 3.01:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by
this 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 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 Guarantee at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity
satisfactory to the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that nothing contained in this Section 3.02(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 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. 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 the Guarantee Trustee
hereunder.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Convertible Preferred
Securities, and the signature of the Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Convertible
Preferred Securities (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) 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 Guarantee.
(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
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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 3.03. 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
representation as to the validity or sufficiency of this Guarantee.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There
shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, state, territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(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 4.01(a), the
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Guarantee Trustee shall immediately resign in the manner and with the effect
set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustees. (a) So long as no default or Event of Default has
occurred and is continuing, and subject to Section 4.02(b), the Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
The Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until the removal or resignation
of the Guarantee Trustee.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(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 and the Guarantee Trustee.
(c) 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 4.02 within 60
days after delivery to the Guarantor of an instrument of removal or
resignation, the resigning or removed Guarantee Trustee may petition any court
of competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
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(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.02, the
Guarantor shall pay to the Guarantee Trustee all amounts accrued to the date of
such termination, removal or resignation.
(g) No appointment of any Successor Guarantee Trustee shall
be effective until all amounts not subject to a good faith dispute which are
known to be owed to the Guarantee Trustee and which are then due have been
paid; provided that upon such payment, within five Business Days of a request
by the Company, the Guarantee Trustee shall certify that all such amounts have
been paid, and that a Successor Guarantee Trustee may be appointed.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders (except to the extent 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 Guarantee Payments, without
duplication. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.02. 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.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the
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Guarantor under this 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 Trust of any express or
implied agreement, covenant, term or condition relating to the
Convertible Preferred Securities to be performed or observed by the
Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Convertible Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Convertible 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 Convertible Preferred 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
Convertible 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
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Section 5.03 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 or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.04. Rights of Holders. (a) The Holders of a
Majority in liquidation amount of the Convertible Preferred 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.
(b) If an Event of Default with respect to the Debentures (an
"Indenture Event of Default"), constituting the failure to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable has occurred and is continuing, then a Holder of Convertible Preferred
Securities may directly, at any time, institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Convertible
Preferred Securities of such Holder on or after the respective due date
specified in the Debentures. The Holders of Convertible Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures unless the Property Trustee (as defined in the Indenture)
fails to do so.
SECTION 5.05. Guarantee of Payment. This Guarantee creates a
guarantee of payment and not of collection.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all, if any, rights of the Holders against the Trust in respect of any
amounts paid to such Holders by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, at the
time of any such payment, any amounts are due and unpaid
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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 Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Trust with respect to the Convertible Preferred Securities, and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g) inclusive,
of Section 5.03 hereof.
SECTION 5.08. Conversion. The Guarantor acknowledges its
obligation to issue and deliver common stock of the Guarantor upon the
conversion of the Convertible Preferred Securities.
ARTICLE VI
Limitation of Transactions; Ranking
SECTION 6.01. Limitation of Transactions. So long as any
Convertible Preferred Securities remain outstanding, if (x) the Guarantor has
exercised its option to defer interest payments on the Debentures by extending
the interest payment period and such extension shall be continuing, (y) there
shall have occurred any event of default under this Guarantee or (z) there
shall have occurred any event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default under the Indenture, then
the Guarantor agrees (a) not to declare or pay dividends on, or make a
distribution with respect to, or redeem, purchase acquire or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of common stock in connection with the satisfaction by
the Guarantor of its obligations under any employee benefit plans or the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of common stock, (ii) as a
result of a reclassification of the Guarantor's capital stock or the exchange
or conversion of one class or series of the Guarantor's capital stock for
another class or series of the Guarantor's capital stock or (iii) the purchase
of
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fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged), (b) not to make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem any debt securities of the
Guarantor (including guarantees) that rank pari passu with or junior to the
Debentures and (c) not to make any guarantee payments with respect to the
foregoing (other than pursuant to this Guarantee).
SECTION 6.02. Ranking. (a) This Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior to all other liabilities of the Guarantor except any liabilities that
may be pari passu expressly by their terms, (ii) pari passu with the most
senior preferred stock issued from time to time by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock or preferred securities of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.
(b) The holders of any obligations of the Guarantor that are
senior in priority to the obligations under this Guarantee will be entitled to
all of the rights inuring to the holders of "Senior Indebtedness" under Article
12 of the Indenture, and the Holders of the Convertible Preferred Securities
will be subject to all of the terms and conditions of such Article 12 with
respect to any claims or rights hereunder with the same effect as though fully
set forth herein.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Guarantee will terminate as
to each Holder upon (i) full payment of the Redemption Price of all Convertible
Preferred Securities; or (ii) distribution of the Debentures held by the Trust
to the Holders; or (iii) liquidation of the Trust, or (iv) upon the
distribution of Guarantor's common stock to such Holder in respect of
conversion of such Holder's Convertible Preferred Securities into common stock
of the Guarantor. This Guarantee also will terminate completely upon full
payment of the amounts payable in accordance with the Declaration of
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the Trust. This Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder must restore payment of any sums
paid under such Convertible Preferred Securities or under this Guarantee.
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or wilful 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 Convertible Preferred
Securities might properly be paid.
SECTION 8.02. 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
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powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.02 shall survive the termination of this Guarantee.
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee shall bind the successors, assigns,
receivers and trustees of the Guarantor and shall inure to the benefit of the
Holders of the Convertible Preferred Securities then outstanding. Except in
connection with any permitted merger or consolidation of the Guarantor with or
into another entity or any permitted sale, transfer or lease of the Guarantor's
assets to another entity as described in the Indenture, the Guarantor may not
assign its rights or delegate its obligations under this Guarantee without the
prior approval of the Holders of at least a Majority of the aggregate stated
liquidation amount of the Convertible Preferred Securities then outstanding.
SECTION 9.02. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no vote will
be required), this Guarantee may be amended only with the prior approval of the
Holders of at least a Majority in liquidation amount of all the outstanding
Convertible Preferred Securities. The provisions of Section 11.02 of the
Declaration with respect to meetings of Holders of the Convertible Preferred
Securities apply to the giving of such approval.
SECTION 9.03. Notices. All notices provided for in this
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, sent by facsimile 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
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such other address as the Guarantee Trustee may give notice of to the
Holders of the Convertible Preferred Securities):
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx (00xx Xxxxx)
Xxx Xxxx, XX 00000
Attention of: Vice President, Global
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 Convertible Preferred
Securities):
Titanium Metals Corporation
0000 Xxxxxxxx (Xxxxx 0000)
Xxxxxx, Xxxxxxxx 00000
Attention of: General Counsel
(c) if given to any Holder at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by 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 9.04. Benefit. This Guarantee is solely for the
benefit of the Holders of the Convertible Preferred Securities and, subject to
Section 3.01(a), is not separately transferable from the Convertible Preferred
Securities.
SECTION 9.05. Governing Law. THIS GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
BY SUCH LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
TITANIUM METALS CORPORATION,
as Guarantor,
By
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Guarantee Trustee,
By
-------------------------------
Name:
Title:
