Exhibit 4(l)
-189-
GUARANTEE AGREEMENT
Between
LINCOLN NATIONAL CORPORATION
(as Guarantor)
and
THE FIRST NATIONAL BANK OF CHICAGO
(as Trustee)
dated as of
August 21, 1996
Lincoln National Capital II
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . .1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . 1
ARTICLE II. TRUST INDENTURE ACT . . . . . . . . . . . . . 3
Section 2.1 Trust Indenture Act; Application . . . . . . . 3
Section 2.2. List of Holders . . . . . . . . . . . . . . . 3
Section 2.3. Reports by the Guarantee Trustee . . . . . . 4
Section 2.4. Periodic Reports to Guarantee Trustee 4
Section 2.5. Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Events of Default; Waiver . . . . . . . . . . 4
Section 2.7. Event of Default; Notice . . . . . . . . . . 4
Section 2.8. Conflicting Interests . . . . . . . . . . . . 4
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Powers and Duties of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Certain Rights of Guarantee Trustee . . . . . 6
Section 3.3. Indemnity . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. GUARANTEE TRUSTEE . . . . . . . . . . . . . . 7
Section 4.1. Guarantee Trustee; Eligibility . . . . . . . 7
Section 4.2. Appointment, Removal and Resignation of
the Guarantee Trustee . . . . . . . . . . . . . . . . . . . 7
ARTICLE V. GUARANTEE . . . . . . . . . . . . . . . . . . . . 8
Section 5.1. Guarantee . . . . . . . . . . . . . . . . . . 8
Section 5.2. Waiver of Notice and Demand . . . . . . . . . 8
Section 5.3. Obligations Not Affected . . . . . . . . . . . 8
Section 5.4. Rights of Holders . . . . . . . . . . . . . . 8
Section 5.5. Guarantee of Payment . . . . . . . . . . . . 9
Section 5.6. Subrogation . . . . . . . . . . . . . . . . . 9
Section 5.7. Independent Obligations . . . . . . . . . . . 9
ARTICLE VI. COVENANTS AND SUBORDINATION . . . . . . . . . 9
Section 6.1. Subordination . . . . . . . . . . . . . . . . 9
Section 6.2. Pari Passu Guarantees . . . . . . . . . . . . 9
ARTICLE VII. TERMINATION . . . . . . . . . . . . . . . . . 9
Section 7.1. Termination . . . . . . . . . . . . . . . . . .9
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . .10
Section 8.1. Successors and Assigns . . . . . . . . . . . 10
Section 8.2. Amendments . . . . . . . . . . . . . . . . . 10
Section 8.3. Notices . . . . . . . . . . . . . . . . . . . 10
Section 8.4. Benefit . . . . . . . . . . . . . . . . . . . 11
Section 8.5. Interpretation . . . . . . . . . . . . . . . 11
Section 8.6. Governing Law . . . . . . . . . . . . . . . . 11
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of August 21, 1996, is
executed and delivered by LINCOLN NATIONAL CORPORATION, an
Indiana corporation (the ''Guarantor'') having its principal
office at 200 East Berry Street, Fort Wayne, Indiana 46802-2706,
and THE FIRST NATIONAL BANK OF CHICAGO, a national 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 Lincoln National
Capital II, a Delaware statutory business trust (the
''Issuer'').
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the ''Trust Agreement''), dated as of August 21,
1996 among the Issuer 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 up to $100,000,000 aggregate liquidation preference
of its 8.35% Preferred Securities, Series B (liquidation
preference $25 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 First National Bank of Chicago, as Property
Trustee under the Trust Agreement, as trust assets; and
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.
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 I. 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 or indirect 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''20 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''0 and ''controlled'' have
meanings correlative to the foregoing.
''Common Securities'' means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
''Debt'' means, with respect to any Person, whether
recourse is to all or a portion of the assets of such Person
and whether or not contingent, (i) every obligation of such
Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person; (iv) every obligation
of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course
of business); (v) every capital lease obligation of such
Person; and (vi) every obligation of the type referred to in
clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor or otherwise.
''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 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 accrued 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, including 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 at such time, and (iii) upon
a voluntary or involuntary termination, 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 $25 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 at such time 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 First National Bank of
Chicago, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
''Holder'' means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided,
however, that in determining whether the holders of the
requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, ''Holder'' shall
not include the Guarantor, the Guarantee Trustee, or any
Affiliate of the Guarantor or the Guarantee Trustee.
''Indenture'' means the Junior Subordinated Indenture dated
as of May 1, 1996, as supplemented and amended between the
Guarantor and The First National Bank of Chicago, 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 then outstanding
Preferred Securities issued by the Issuer.
''Officers' Certificate'' means, with respect to any
Person, a certificate signed by the Chairman and Chief
Executive Officer, President or a Vice President, and by the
Treasurer, and Associate 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 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
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 Senior 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 Department 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.
''Senior Debt'' means the principal of (and premium, if
any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date
of this Guarantee or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the
Guarantee or to other Debt which is pari passu with, or
subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the
Guarantor which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of
1978, was without recourse to the Guarantor, (b) any Debt of
the Guarantor to any of its Subsidiaries, (c) Debt to any
employee of the Guarantor, (d) any liability for taxes, (e)
Debt or other monetary obligations to trade creditors created
or assumed by the Guarantor or any of its Subsidiaries in the
ordinary course of business in connection with the obtaining
of goods, materials or services and (f) Debt issued under the
Indenture and (g) the Guarantee.
''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 II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part of
this Guarantee Agreement and shall, to the extent applicable,
be governed by such provisions.
(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 (a) semiannually, 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 (b)
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 in its capacity as such. 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.
Not later than July 15 of each year, commencing July 15,
1997, 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 the 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 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
Preferred 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 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.
ARTICLE III. 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 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), 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:
(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
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 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.
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, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document reasonably 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
Officer's 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 written 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,
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.
(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, 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, (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 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 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 Payments as a result of any amount due to it
under this Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(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(c) 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).
(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 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 V. GUARANTEE
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay
in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the 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;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets
of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain 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 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 Agreement or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and (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.
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, 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 as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior
in right of payment to all Senior Debt of the Guarantor.
Section 6.2. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any
similar Guarantee Agreements issued by the Guarantor on behalf
of the holders of Preferred Securities issued by Lincoln
National Capital I and Lincoln National Capital III.
ARTICLE VII. 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 or (iii) full payment of the
amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. 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 VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure
to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under
Article Eight 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 8.2. 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 all the outstanding Preferred
Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to
the giving of such approval.
Section 8.3. 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, facsimile number or to the
attention of such other Person as the Guarantor may give
notice to the Holders:
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: 219-455-6265
Attention: Treasurer
(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 to the Holders:
Lincoln National Capital II
c/o Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: 219-455-6265
Attention: Treasurer
with a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Facsimile No.: 312-407-1708
Attention: Corporate Services Division
(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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Preferred
Securities.
Section 8.5. 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;
(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 8.6. 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.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
Lincoln National Corporation
By:
Name:
Title:
The First National Bank of
Chicago
as Guarantee Trustee
By:
Name:
Title: