EXHIBIT 4.2(ii)
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GUARANTEE AGREEMENT
between
Big Flower Holdings, Inc.
and
The Bank of New York
Relating to the Preferred Securities of
Big Flower Trust I
Dated as of October 20, 1997
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CROSS REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a)...................................................................4.1(a)
310(b)..............................................................4.1(c), 2.8
310(c).............................................................Inapplicable
311(a)...................................................................2.2(b)
311(b)...................................................................2.2(b)
311(c).............................................................Inapplicable
312(a)...................................................................2.2(a)
312(b)...................................................................2.2(b)
313.........................................................................2.3
314(a)......................................................................2.4
314(b).............................................................Inapplicable
314(c)......................................................................2.5
314(d).............................................................Inapplicable
314(e)............................................................1.1, 2.5, 3.2
314(f)......................................................................3.2
315(a)...................................................................3.1(d)
315(b)......................................................................2.7
315(c)......................................................................3.1
315(d)...................................................................3.1(d)
316(a)............................................................1.1, 2.6, 5.4
316(b)......................................................................5.3
317(a).............................................................Inapplicable
317(b).............................................................Inapplicable
318(a)...................................................................2.1(b)
318(b)......................................................................2.1
318(c)...................................................................2.1(a)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions.....................................................2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application................................6
SECTION 2.2. List of Holders.................................................6
SECTION 2.3. Reports by the Guarantee Trustee................................7
SECTION 2.4. Periodic Reports to Guarantee Trustee...........................7
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.....................................................7
SECTION 2.6. Events of Default; Waiver.......................................8
SECTION 2.7. Event of Default; Notice........................................8
SECTION 2.8. Conflicting Interests...........................................8
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee
Trustee.......................................................8
SECTION 3.2. Certain Rights of Guarantee Trustee............................10
SECTION 3.3. Indemnity......................................................13
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.................................13
SECTION 4.2. Appointment, Removal and Resignation
of the Guarantee Trustee.....................................14
ARTICLE 5
GUARANTEE
SECTION 5.1. Guarantee......................................................14
SECTION 5.2. Waiver of Notice and Demand....................................15
SECTION 5.3. Obligations Not Affected.......................................15
SECTION 5.4. Rights of Holders..............................................16
SECTION 5.5. Guarantee of Payment...........................................17
SECTION 5.6. Subrogation....................................................17
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SECTION 5.7. Independent Obligations........................................17
SECTION 5.8. Subordination..................................................17
ARTICLE 6
COVENANTS
SECTION 6.1. Certain Covenants of the Guarantor.............................18
ARTICLE 7
TERMINATION
SECTION 7.1. Termination....................................................19
ARTICLE 8
SUBORDINATION OF GUARANTEE
SECTION 8.1. Guarantee Subordinate to Guarantor
Secured Indebtedness.........................................20
SECTION 8.2. Payment Over of Proceeds Upon
Dissolution, Etc.............................................20
SECTION 8.3. Payment Blockage Upon Acceleration
of Designated Senior Indebtedness, Etc.......................21
SECTION 8.4. No Payment When Guarantor Secured
Indebtedness in Default......................................22
SECTION 8.5. Guarantee Trustee to Effectuate
Subordination................................................23
SECTION 8.6. No Waiver of Subordination Provisions..........................23
SECTION 8.7. Notice to Guarantee Trustee....................................23
SECTION 8.8. Reliance on Judicial Order or
Certificate of Liquidating Agent.............................24
SECTION 8.9. Guarantee Trustee Not Fiduciary for
Holders of Guarantor Secured Indebtedness....................24
SECTION 8.10. Rights of Guarantee Trustee as Holder
of Guarantor Secured Indebtedness............................25
SECTION 8.11. Certain Conversions or Exchanges
Deemed Payment...............................................25
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.........................................25
SECTION 9.2. Amendments.....................................................26
SECTION 9.3. Notices........................................................26
SECTION 9.4. Benefit........................................................27
SECTION 9.5. Interpretation.................................................27
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SECTION 9.6. Governing Law..................................................28
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of October 20, 1997, is executed
and delivered by Big Flower Holdings, Inc., a Delaware corporation (the
"Guarantor") and The Bank of New York, 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 Preferred Securities (as defined herein) of Big
Flower Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of October 14, 1997 among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 2,300,000 of its 6% Convertible Quarterly Income Preferred Securities
(liquidation preference $50 per preferred security) (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and
the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets;
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct common control with
such specified Person, provided, however, that an Affiliate of the Guarantor
shall not be deemed to include the Issuer. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled' have meanings correlative to the
foregoing.
"Bank Credit Agreement" means the Credit Agreement dated as of June
12, 1997, among the lenders party thereto in their capacities as lenders
thereunder, Credit Suisse First Boston, as documentation agent, and Bankers
Trust Company, as administrative agent, together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder or adding Subsidiaries of the
Guarantor as additional borrowers or guarantors thereunder) all or any portion
of the indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Common Securities" means the securities representing common
beneficial interests in the assets of the Issuer.
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"Common Stock" shall mean the common stock, par value $0.01, per
share, of the Guarantor.
"Designated Senior Indebtedness" means (x) all Guarantor Secured
Indebtedness under, or as a result of the Guarantor's guarantee of, indebtedness
pursuant to the Bank Credit Agreement and (y) at any time when no indebtedness
described in preceding clause (x) is outstanding, any issue of Guarantor Secured
Indebtedness with an aggregate principal amount in excess of $15.0 million that
is designated as "Designated Senior Indebtedness" by written notice from the
Guarantor to the Guarantee Trustee.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price set forth in the
Trust Agreement, including premium, if any, all accrued and unpaid Distributions
to the date of redemption (the "Redemption Price"), with respect to the
Preferred Securities called for redemption by the Issuer to the extent the
Issuer shall have funds on hand available therefor, and (iii) upon a voluntary
or involuntary dissolution, winding-up or liquidation of the Issuer, unless
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the liquidation preference of $50 per Preferred Security plus accrued and unpaid
Distributions on the Preferred Securities to the date of payment to the extent
the Issuer shall have funds on hand available to make such payment 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").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this
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Guarantee Agreement and thereafter means each such Successor Guarantee Trustee.
"Guarantor Secured Indebtedness" means the principal (including
without limitation all unpaid drawings with respect to letters of credit) of and
premium, if any, and interest (including interest accruing on or after the
filing of any petition in bankruptcy relating to the Guarantor at the relevant
contractual rate whether or not such claim for post-petition interest is allowed
in such proceeding) on, and all other amounts owing with respect to, the
following, whether outstanding on the date of execution of this Indenture or
thereafter incurred, created or assumed, to the extent (but only to the extent)
the same is secured by a lien, charge, mortgage or other encumbrance on property
or assets of the Guarantor or its subsidiaries (which term, as used in this
paragraph, shall not refer to Big Flower Trust I): (i) indebtedness of the
Guarantor for money borrowed (including purchase money obligations, except
indebtedness to trade creditors) or evidenced by debentures (other than the
Debentures), notes, bankers' acceptances or other corporate debentures or
similar instruments; (ii) all capital lease obligations of the Guarantor; (iii)
all obligations with respect to letters of credit; (iv) all obligations with
respect to currency hedging agreements, interest rate protection agreements and
other similar agreements; (v) all indebtedness of others of the type referred to
in the preceding clauses (i) through (iv) assumed by or guaranteed in any manner
by the Guarantor or in effect guaranteed by the Guarantor; and (vi) renewals,
extensions or refundings of any of the indebtedness referred to in the preceding
clauses (i), (ii), (iii), (iv) and (v) and in this clause (vi). For purposes of
the foregoing definition, all indebtedness secured by a lien, charge, mortgage
or other encumbrance on property or assets of the Guarantor or its subsidiaries
shall be deemed to be secured for purposes of said definition, notwithstanding
any determination that the amount of indebtedness so secured exceeds the value
of the assets serving as security therefor and notwithstanding any determination
in any bankruptcy or other proceeding that a portion of such indebtedness shall
be treated as unsecured because of any insufficiency in the value of the
collateral securing such indebtedness. Without limiting the foregoing, in any
event all obligations of the Guarantor with respect to (including its guaranties
of obligations under) the Bank Credit Agreement shall constitute Guarantor
Secured Indebtedness.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
whether
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the holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of October 20, 1997, as
supplemented and amended between the Guarantor and The Bank of New York, as
trustee.
"List of Holders" has the meaning specified in Section 2.2 (a).
"Majority in Liquidation Preference of the Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the liquidation preference of all the
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by (i) the Chairman, Chief Executive Officer, President or a
Vice President, and by (ii) the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the 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;
(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.
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"Payment Blockage Period" has the meaning specified in Section 8.3.
"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 Executive Vice President, Senior Vice President, any First Vice President,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or
Assistant Trust Officer or any other officer of the Corporate Trust Services
Division 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 Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or
cause to be furnished to the Guarantee Trustee (unless the Guarantee Trustee is
acting as
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Securities Registrar with respect to the Debentures under the Indenture) (i)
semi-annually, on or before January 15 and July 15 of each year, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses
of the Holders ("List of Holders") as of a date not more than 15 days prior to
the delivery thereof, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information is in
the possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee. Notwithstanding the foregoing, the Guarantor shall not be obligated to
provide such List of Holders at any time the Preferred Securities are
represented by one or more Global Certificates (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
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee. On or before July 15,
of each calendar year, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in
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Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.7. Event 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, notices of all Events of
Default known to the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, 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.
(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, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.8. Conflicting Interests. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
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ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.4(iv) 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 the Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(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
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement 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 the Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement 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;
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(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement,
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 Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in Liquidation
Preference of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability
is not reasonably assured to it.
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SECTION 3.2. Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, proxy, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take 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 rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or opinion of such legal counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel
may be legal counsel to the Guarantor or any of its Affiliates and may be
one of its employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such adequate security and indemnity as
would satisfy a reasonable person in the position of the Guarantee
Trustee,
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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
3.2(a)(v) 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 Agreement and use the
same degree of care and skill in the exercise thereof as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs.
(vi) 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.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys or any Affiliate, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
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 Preference of the 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 acting
in accordance with such instructions.
(b) No provision of this Guarantee Agreement 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
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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 to act in accordance with such power and
authority.
SECTION 3.3. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the reasonable costs and expenses of
defending itself against 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 Payment as a result
of any amount due to it under this Guarantee Agreement.
ARTICLE 4
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
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust
Indenture Act, 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).
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(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the 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.
(b) The Guarantee Trustee shall not be removed 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 hereunder 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 to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, 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.
ARTICLE 5
GUARANTEE
SECTION 5.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees, subject to Section 5.8 and Article 8, to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when
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due, regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert other than the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of the Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, 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 Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the 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 (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the 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 or the Guarantee Trustee
to give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the
Holders of a Majority in Liquidation Preference of the Securities have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person; and (v) if an Event of Default with
respect to the Debentures 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 any Holder shall have the right, which is
absolute and unconditional, to proceed directly against the Guarantor to obtain
Guarantee Payments without first waiting to determine if the Guarantee Trustee
has enforced this Guarantee Agreement or instituting a legal
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proceeding against the Issuer, the Guarantee Trustee or any other Person.
SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee Agreement 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.
SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Issuer pursuant to Section 5.1; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that the Guarantor shall be liable
as principal and debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
SECTION 5.8. Subordination. The Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and subject in right of payment to the prior payment in full in cash of all
Guarantor Secured Indebtedness and pari passu with any guarantee now or
hereafter entered into by the Guarantor in respect of the Common Securities
or of any preferred or preference stock of any affiliate of the Guarantor.
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ARTICLE 6
COVENANTS
SECTION 6.1. Certain Covenants of the Guarantor. (a) Guarantor
covenants and agrees that if and so long as (i) the Issuer is the holder of all
the Debentures, (ii) a Tax Event (as defined in the Trust Agreement) in respect
of the Issuer has occurred and is continuing and (iii) the Guarantor has
elected, and has not revoked such election, to pay Additional Sums (as defined
in the Trust Agreement) in respect of the Preferred Securities and Common
Securities, the Guarantor will pay to the Issuer such Additional Sums.
(b) The Guarantor covenants and agrees that it will not, and will
not permit any subsidiary of the Guarantor to, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any shares of the Guarantor's capital stock or (ii) make any
payment of principal, interest or premium, if any, on or repay or repurchase or
redeem any debt securities (including guarantees of indebtedness for money
borrowed) of the Guarantor that rank pari passu with or junior to the Debentures
(other than (a) any dividend, redemption, liquidation, interest, principal or
guarantee payment by Guarantor where the payment is made by way of securities
(including capital stock) that rank pari passu with or junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made, (b) redemptions or purchases of any rights pursuant to the
Shareholders Rights Plan (as defined in the Indenture), or any successor to such
Shareholders Rights Plan, and the declaration of a dividend of such rights or
the issuance of preferred stock under such plans in the future, (c) payments
under this Agreement, (d) purchases of Common Stock related to the issuance of
Common Stock under any of the Guarantor's benefit plans for its directors,
officers or employees, (e) as a result of a reclassification of the Guarantor's
capital stock or the exchange or conversion of one series or class of the
Guarantor's capital stock for another series or class of the Guarantor's capital
stock and (f) the purchase of 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) if at such time (x) there
shall have occurred any event of which the Guarantor has actual knowledge that
(A) with the giving of notice or the lapse of time, or both, would constitute an
"Event of Default" under the Indenture
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with respect to the Debentures and (B) in respect of which the Guarantor shall
not have taken reasonable steps to cure, (y) the Guarantor shall be in default
with respect to its payment of any obligations under the Guarantee or (z) the
Guarantor shall have given notice of its selection of an Extension Period (as
defined in the Indenture) with respect to the Debentures and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
(c) The Guarantor covenants and agrees (i) to maintain directly or
indirectly 100% ownership of the Common Securities, provided that certain
successors which are permitted by the Indenture may succeed to the Guarantor's
ownership of the Common Securities, (ii) not to voluntarily terminate, wind-up
or liquidate the Issuer, except (a) in connection with a distribution of the
Debentures to the holders of the Preferred Securities in liquidation of the
Issuer or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Trust Agreement, (iii) to use its reasonable
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause the Issuer to remain classified as a grantor trust and not as an
association taxable as a corporation for United States Federal income tax
purposes, (iv) for so long as Preferred Securities are outstanding, not to
convert Debentures except pursuant to a notice of conversion delivered to the
Conversion Agent (as defined in the Trust Agreement) by a Holder, (v) to
maintain the reservation for issuance of the number of shares of Common Stock
that would be required from time to time upon the conversion of all the
Debentures then outstanding, (vi) to deliver shares of Common Stock upon an
election by the Holders to convert such Preferred Securities into Common Stock
and (vii) to honor all obligations relating to the conversion or exchange of the
Preferred Securities into or for Common Stock or Debentures.
ARTICLE 7
TERMINATION
SECTION 7.1. Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment of the Redemption
Price of all Preferred Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Preferred Securities, (iii) full payment of
the amounts payable in accordance with
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the Trust Agreement upon liquidation of the Issuer or (iv) the distribution, if
any, of Common Stock to the holders of the Preferred Securities in respect of
the conversion of all such holders' Preferred Securities into Common Stock.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.
ARTICLE 8
SUBORDINATION OF GUARANTEE
SECTION 8.1. Guarantee Subordinate to Guarantor Secured
Indebtedness. The Guarantor covenants and agrees, and each Holder, by its
acceptance thereof, likewise covenants and agrees, that the payment of the
Guarantee Payments pursuant to this Guarantee Agreement are hereby expressly
made subordinate and subject in right of payment to the prior payment in full in
cash of all amounts then due and payable in respect of all Guarantor Secured
Indebtedness (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Guarantor Secured Indebtedness and that no payment of the
Guarantee Payments pursuant to this Guarantee Agreement may be made unless full
payment of all amounts then due for principal, premium, if any, and interest
then due on all Guarantor Secured Indebtedness by reason of the maturity thereof
(by lapse of time, acceleration or otherwise) has been made or duly provided for
in cash or in a manner satisfactory to the holders of such Guarantor Secured
Indebtedness.
SECTION 8.2. Payment Over of Proceeds Upon Dissolution, Etc. Upon
any distribution of the Guarantor's assets in connection with any dissolution,
winding up, liquidation or reorganization of the Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency or receivership proceedings (each such
event, if any, herein sometimes referred to as a "Proceeding"), or upon an
assignment for the benefit of creditors or otherwise: (i) all Guarantor Secured
Indebtedness (including without limitation all interest accruing on or after the
filing of any petition in bankruptcy relating to the Guarantor at the relevant
contractual rate, whether or not such claim for post-petition interest is
allowed in such Proceeding) must be paid in full in cash before the Holders are
entitled to
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any payments or distributions of any kind or character on account of any
Guarantee Payments pursuant to this Guarantee Agreement, and (ii) any payment or
distribution of the Guarantor's assets of any kind or character, whether in
cash, securities or other property, which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Guarantee
Payments shall be paid or delivered directly to the holders of such Guarantor
Secured Indebtedness (or their representative or trustee) in accordance with the
priorities then existing among such holders until all Guarantor Secured
Indebtedness shall have been paid in full in cash before any payment or
distribution is made to the Holders.
In the event that notwithstanding the subordination provisions set
forth herein, any payment or distribution of assets of any kind or character is
made at a time when the respective payment is not permitted to be made as a
result of the subordination provisions described above and before all Guarantor
Secured Indebtedness is paid in full in cash, the Guarantee Trustee or the
Holders receiving such payment will be required to pay over such payment or
distribution to the holders of such Guarantor Secured Indebtedness.
The consolidation of the Guarantor with, or the merger of the
Guarantor into, another Person or the liquida tion or dissolution of the
Guarantor following the sale of all or substantially all of its properties and
assets as an entirety to another Person upon the terms and conditions set forth
in Article 8 of the Indenture shall not be deemed a Proceeding for the purposes
of this Section if the Person formed by such consolidation or into which the
Guarantor is merged or the Person which acquires by sale such properties and
assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in Article
8.
SECTION 8.3. Payment Blockage Upon Acceleration of Designated Senior
Indebtedness, Etc. During the continuance of any event of default with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated, upon the occurrence of (a) receipt by the Guarantee Trustee of
written notice from the holders of a majority of the outstanding principal
amount of the Designated Senior Indebtedness or their representative, or (b) if
such event of default results from the enforcement of this Guarantee Agreement
or any action by the Holders to
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obtain Guarantee Payments, the date of such enforcement or action, no Guarantee
Payments may be made by the Guarantor for a period ("Payment Blockage Period")
commencing on the earlier of the date of receipt of such notice or the date of
such enforcement or action and ending 179 days thereafter (unless such Payment
Blockage Period shall be terminated by written notice to the Guarantee Trustee
from the holders of a majority of the outstanding principal amount of such
Designated Senior Indebtedness or their representative who delivered such
notice); provided, however, that notwithstanding anything herein to the
contrary, in no event will a Payment Blockage Period extend beyond 179 days from
the date on which such Payment Blockage Period was commenced; provided further,
that not more than one Payment Blockage Period may be commenced with respect to
the Guarantee Payments during any period of 360 consecutive days. For all
purposes of this Section, no event of default which existed or was continuing on
the date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period shall be,
or be made, the basis for the commencement of a second payment Blockage Period
by the holders of such Designated Senior Indebtedness or their representative
whether or not within a period of 360 consecutive days unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
In the event that, notwithstanding the foregoing, the Guarantor shall make
any payment to the Guarantee Trustee or any Holder prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known, as set forth in Section 8.7, to the
Guarantee Trustee or, as the case may be, such Holder, then and in such event
such payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section shall not apply to any payment with respect
to which Section 8.2 would be applicable.
SECTION 8.4. No Payment When Guarantor Secured Indebtedness in
Default. In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on, or any other amounts owning
with respect to, any Guarantor Secured Indebtedness when the same becomes due
and payable or in the event any judicial proceeding shall be pending with
respect to any
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such default, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no payment or distribution of any kind or
character, whether in cash or properties shall be made by the Guarantor on
account of any Guarantee Payment.
The Guarantor shall give prompt written notice to the Guarantee
Trustee of any default in payment of principal of or interest on any Guarantor
Secured Indebtedness; provided that no failure to give such a notice shall have
any effect whatsoever on the subordination provisions described herein.
In the event that, notwithstanding the foregoing, the Guarantor
shall make any payment to the Guarantee Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known as set forth in Section 8.7, to the
Guarantee Trustee or, as the case may be, such Holder, then and in such event
such payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section shall not apply to any payment with
respect to which Section 8.2 would be applicable.
SECTION 8.5. Guarantee Trustee to Effectuate Subordination. Each
Holder by his or her acceptance thereof authorizes and directs the Guarantee
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Guarantee Trustee as his or her attorney-in-fact for
any and all such purposes.
SECTION 8.6. No Waiver of Subordination Provisions. No right of any
present or future holder of any Guarantor Secured Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms, provisions and covenants of this Guarantee
Agreement, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.
SECTION 8.7. Notice to Guarantee Trustee. The Guarantor shall give
written notice as soon as commercially
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practicable to the Guarantee Trustee of any fact actually known to the Guarantor
which would prohibit the making of any payment to or by the Guarantee Trustee in
respect of the Guarantee Payment. Notwithstanding the provisions of this Article
or any other provision of this Guarantee Agreement, the Guarantee Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Guarantee Trustee in respect of the
Guarantee Payment, unless and until the Guarantee Trustee shall have received
written notice thereof from the Guarantor or a person representing itself as a
holder of Guarantor Secured Indebtedness or from any trustee, agent or
representative therefor (whether or not the facts contained in such notice are
true).
SECTION 8.8. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Guarantor
referred to in this Article, the Guarantee Trustee, subject to the provisions of
Article 3, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which a Proceeding is pending,
or a certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Guarantee Trustee or to the
Holders, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Guarantor Secured Indebtedness
and other indebtedness of the Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 8.9. Guarantee Trustee Not Fiduciary for Holders of
Guarantor Secured Indebtedness. With respect to the holders of the Guarantor
Secured Indebtedness, the Guarantee Trustee undertakes to perform or observe
only such of its obligations and covenants as are set forth in this Article 8,
and no implied covenants or obligations with respect to the holders of such
Guarantor Secured Indebtedness shall be read into this Guarantee Agreement
against The Bank of New York and/or the Guarantee Trustee. The Bank of New York
and/or the Guarantee Trustee shall not be deemed to owe any fiduciary duty to
the holders of such Guarantor Secured Indebtedness and, subject to the
provisions of Section 3.2, neither the Guarantee Trustee nor The Bank of New
York shall be liable to the holder of any Guarantor Secured Indebtedness if it
shall pay over or
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deliver to Holders, the Guarantor, or any other person, money or assets to which
any holder of such Guarantor Secured Indebtedness shall be entitled to by virtue
of this Article 8 or otherwise.
SECTION 8.10. Rights of Guarantee Trustee as Holder of Guarantor
Secured Indebtedness; Preservation of Guarantee Trustee's Rights. The Guarantee
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article with respect to any Guarantor Secured Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Secured Indebtedness, and, subject to the requirements of the Trust Indenture
Act, nothing in this Guaranty Agreement shall deprive the Guarantee Trustee of
any of its rights as such holder.
SECTION 8.11. Certain Conversions or Exchanges Deemed Payment. For
the purpose of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Debentures shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on the Debentures or on
account of the purchase or other acquisition of Debentures, and (b) the payment,
issuance or delivery of cash (including any payments for fractional shares),
property or securities (other than junior securities) upon conversion or
exchange of a Debenture shall be deemed to constitute payment on account of the
principal of such security. For the purpose of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Guarantor and (ii)
securities of the Guarantor which are subordinated in right of payment to all
Guarantor Secured Indebtedness which may be outstanding at the time of issuance
or delivery of such securities to substantially the same extent as, or to a
greater extent than, the Debentures are so subordinated as provided in this
Article.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred
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Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article 8 of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 9.2. Amendments. Except with respect to any changes which do
not adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Preference of the Securities. The provisions of Article
6 of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval. The Guarantor shall furnish the Guarantee Trustee with
an Officers' Certificate and an Opinion of Counsel to the effect that any
amendment of this Agreement is authorized and permitted.
SECTION 9.3. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows: (a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders:
Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice of to
the Holders:
Big Flower Trust I
c/o Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
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with a copy to:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000)000-0000
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the books
and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 9.5. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
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(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 9.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
BIG FLOWER HOLDINGS, INC.
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK, as Guarantee
Trustee
By: ____________________________
Name:
Title:
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