EXHIBIT 4.7
CAPITAL SECURITIES GUARANTEE AGREEMENT
Leucadia Capital Trust I
Dated as of January 21, 1997
CROSS-REFERENCE TABLE*
----------------------
Section of Trust Indenture Section of Capital
Act of 1939, as amended Securities Guarantee
Agreement
310(a).....................................................4.1(a)
310(b).....................................................4.1(c)
310(c)..............................................Inapplicable
311(a).....................................................2.2(a)
311(b).....................................................2.2(b)
311(c)..............................................Inapplicable
312(a).....................................................2.2(a)
312(b).....................................................2.2(b)
312(c).....................................................2.2(c)
313........................................................2.3
314(a).....................................................2.4
314(b)...............................................Inapplicable
314(c).....................................................2.5
314(d)...............................................Inapplicable
314(e).....................................................2.5
314(f)...............................................Inapplicable
315(a).....................................................3.1(b)
315(b).....................................................2.7
315(c).....................................................3.1(c)
315(d).....................................................3.1(d)
316(a).............................................5.4(a), 2.6
318(a).....................................................2.1(c)
_____________
* This Cross-Reference Table does not constitute part of this
Guarantee Agreement and shall not affect the interpretation of any of
its terms or provisions.
TABLE OF CONTENTS
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Page
CROSS-REFERENCE TABLE . . . . . . . . . . . . . . . . . . . . . . . i
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . 6
SECTION 2.3 Reports by the Guarantee Trustee . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . . . 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . 7
SECTION 2.7 Events of Default; Notice . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
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 Not Responsible for Recitals or Issuance of
Capital Securities Guarantee . . . . . . . . . . . . . 13
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . . . 13
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . . . . . . . 14
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee . . . . . . . . . . . . . 15
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
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . 18
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . 18
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . 20
SECTION 8.3 Compensation; Reimbursement of Expenses . . . . . . . 21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . 21
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . 23
GUARANTEE AGREEMENT
-------------------
This GUARANTEE AGREEMENT (the "Capital Securities
Guarantee"), dated as of January 21, 1997, is executed and delivered
by Leucadia National Corporation, a New York corporation (the
"Guarantor"), and The Chase Manhattan Bank, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of Leucadia Capital Trust I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January 21, 1997, among the
trustees named therein of the Issuer, Leucadia National Corporation,
as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the
date hereof securities, having an aggregate liquidation amount of up
to $150,000,000, designated the 8.65% Capital Trust Pass-through
SecuritiesSM (the "Initial Capital Securities") and may issue in the
future, pursuant to the Registration Rights Agreement (as defined in
the Declaration) securities solely to be exchanged for Initial Capital
Securities, with terms that are substantially identical to those of
the Initial Capital Securities (the "Exchange Capital Securities" and
together with the Initial Capital Securities, the "Capital
Securities");
WHEREAS, as incentive for the Holders to purchase the
Capital Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Capital
Securities Guarantee, to pay to the Holders of Capital Securities the
Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Capital Securities Guarantee for
the benefit of the holders of the Common Securities (as defined in the
Declaration) of the Issuer, except that if a Declaration Event of
Default (as defined herein), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of the Capital Securities to receive Guarantee
Payments under this Capital Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
-------------------------------------------
In this Capital Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Capital Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities
Guarantee has the same meaning throughout;
(c) all references to the Capital Securities Guarantee or
this Capital Securities Guarantee are to this Capital
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Capital Securities Guarantee, unless otherwise specified;
(e) terms defined in the Declaration as at the date of
execution of this Capital Securities Guarantee or in the Trust
Indenture Act, as the case may be, have the same meanings when
used in this Capital Securities Guarantee, unless otherwise
defined in this Capital Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee
shall, at any particular time, be principally administered, which
office at the date of execution of this Guarantee Agreement is located
at 450 West 33rd Street, 15th Floor, New York, New York 10001.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of the
Leucadia National Corporation designated the 8.65% Junior Subordinated
Deferrable Interest Debentures due 2027, held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
"Declaration Event of Default" means an "Event of Default"
as defined in the Declaration.
"Event of Default" has the meaning set forth in Section 2.6.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions (as defined in the Declaration) which
are required to be paid on such Capital Securities to the extent the
Issuer shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to the
Holders of the Capital Securities in exchange therefor as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer shall have
funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantees" means the Common Securities Guarantee and this
Capital Securities Guarantee, collectively.
"Guarantee Trustee" means The Chase Manhattan Bank, a New
York banking corporation, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of
this Capital Securities Guarantee and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Capital Securities; provided,
--------
however, that, in determining whether the holders of
-------
the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, Holder shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of January 21,
1997, between the Guarantor and The Chase Manhattan Bank, not in its
individual capacity but solely as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued
to the Institutional Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of Guarantee Payments herein.
"Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as
a class, but separately from the holders of Common Securities, of more
than 50% of the aggregate liquidation amount of all Capital Securities
then outstanding.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any
Officer's Certificate delivered with respect to compliance with a
condition or covenant provided for in this Capital Securities
Guarantee shall include:
(a) a statement that each officer signing the Officer's
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 Officer's Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the
Guarantee Trustee with direct responsibility for the administration of
this Capital Securities Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"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.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
---------------------------------------------
(a) This Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that would be required to
be part of this Capital Securities Guarantee if this Capital
Securities Guarantee were qualified under the Trust Indenture Act
and shall, to the extent applicable, be governed by such
provisions;
(b) This Capital Securities Guarantee will be qualified
under the Trust Indenture Act upon effectiveness of a
Registration Statement with respect to this Capital Securities
Guarantee; and
(c) If and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
-------------------------------------------
(a) The Guarantor shall provide the Guarantee Trustee (i)
within 14 days after each record date for payment of
Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of
the Capital Securities ("List of Holders") as of such record
date, provided that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Guarantee Trustee. The
Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
(c) The Guarantor, the Issuer, the Guarantee Trustee and
anyone else shall have the protection of Section 312(c) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
---------------------------------------------
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Capital Securities such
reports as are required by Section 313(a) of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Sections 313(b), 313(c) and 313(d) of the Trust
Indenture Act. The Guarantor will notify the Guarantee Trustee if and
when any Capital Securities are listed on any stock exchange.
SECTION 2.4 Periodic Reports to Guarantee Trustee
--------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information (if any) as required by Section 314
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, provided that such compliance
certificate shall be delivered on or before 120 days after the end of
the fiscal year of the Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
-------------------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent provided for in
this Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form
of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
--------------------------------------
(a) An Event of Default under this Capital Securities
Guarantee will occur upon the failure of the Guarantor to perform any
of its payment or other obligations hereunder; provided, however,
-------- -------
that, other than with respect to a default on any payment under this
Capital Securities Guarantee, the Guarantor shall have received notice
of default and shall not have cured such default within 90 days after
receipt of such notice.
(b) The Holders of a Majority in liquidation amount of
Capital Securities may, voting or consenting as a class, on behalf of
the Holders of all of the Capital Securities, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and shall be deemed to have been cured,
for every purpose of this Capital Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 Events of Default; Notice
--------------------------------------
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default known to a Responsible Officer
of the Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all
Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before
the giving of such notice, provided, however, that the Guarantee
-------- -------
Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the
interests of the Holders of the Capital Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee
Trustee shall have received written notice from the Guarantor or
a Holder of the Capital Securities (except in the case of a
payment default), or a Responsible Officer of the Guarantee
Trustee charged with the administration of this Capital
Securities Guarantee shall have obtained actual knowledge,
thereof.
SECTION 2.8 Conflicting Interests
----------------------------------
The Indenture, the Debt Securities (as defined therein)
issued or to be issued thereunder, the Declaration, the Trust
Securities issued or to be issued thereunder and the Capital
Securities Guarantee and Common Securities Guarantee in connection
therewith shall be deemed to be specifically described in this Capital
Securities Guarantee for the purposes of clause (i) of the proviso
contained in Section 310(b)(1) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
-------------------------------------------------------
(a) This Capital Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of
Capital Securities exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of
the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing,
the Guarantee Trustee shall enforce this Capital Securities
Guarantee for the benefit of the Holders of the Capital
Securities.
(c) In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Capital Securities Guarantee, and
use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Capital Securities Guarantee shall
be construed to relieve the Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express
provisions of this Capital Securities Guarantee, and
the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Capital Securities
Guarantee, and no implied covenants or obligations
shall be read into this Capital Securities Guarantee
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of
this Capital Securities Guarantee; but in the case of
any such certificates or opinions 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 Capital
Securities Guarantee;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that such Responsible Officer of the Guarantee Trustee or
the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of not less than a Majority in liquidation amount of the
Capital 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 Capital
Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee
shall require the Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds is not reasonably assured to it under the terms
of this Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Guarantee Trustee
------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor
contemplated by this Capital Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and
conclusively rely upon an Officer's Certificate which, upon
receipt of such request, shall be delivered by the Guarantor
as soon as practicable.
(iv) The Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of
competent jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Capital Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Guarantee Trustee,
against the costs, expenses (including attorneys fees and
expenses and the expenses of the Guarantee Trustee s agents,
nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by
the Guarantee Trustee; provided, however, that nothing
-------- -------
contained in this Section 3.2(a)(vi) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Capital Securities
Guarantee.
(vii) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its
discretion, may make such
further inquiry or investigation into such facts or matters
as it may see fit.
(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required
to inquire as to the authority of the Guarantee Trustee to
so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of
which shall be conclusively evidenced by the Guarantee
Trustee s or its agent s taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder,
the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it
by this Capital Securities Guarantee.
(b) No provision of this Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Guarantee
Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the
Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law to perform any such act or
acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital
----------------------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness. The
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Capital Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
-------------------------------------------
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or
Person permitted by the Securities and Exchange Commission
to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee
shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
conflicting interest within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee
----------------------------------------------------------------------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor
except during an Event of Default.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
an instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee
or removal or resignation of the Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Guarantee
Trustee all amounts owing to the Guarantee Trustee
under Sections 8.2 and 8.3 accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee
-----------------------------------------
(a) The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense (except the defense of payment by the
Issuer), right of set-off or counterclaim that the Issuer may have or
assert. Such obligations will not be discharged except by payment of
the Guarantee Payments in full. The Guarantor s obligation to make a
Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
(b) The obligations of Guarantor under Section 5.1(a) shall
not apply except to the extent the Issuer has funds available for the
payment of Distributions.
SECTION 5.2 Waiver of Notice and Demand
----------------------------------------
The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a
proceeding first against the 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 Capital Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by
the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension
of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from
the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to
the terms of the Capital 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
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice
to, or obtain consent of, the Guarantor with respect to the happening
of any of the foregoing.
SECTION 5.4 Rights of Holders
------------------------------
(a) The Holders of a Majority in liquidation amount of the
Capital 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 Capital
Securities Guarantee or to direct the exercise or exercising of
any trust or power conferred upon the Guarantee Trustee under
this Capital Securities Guarantee; provided however, that
-------- -------
(subject to Section 3.1) the Guarantee Trustee shall have the
right to decline to follow any such direction if the Guarantee
Trustee shall determine that the actions so directed would be
unjustly prejudicial to the Holders not taking part in such
direction or if the Guarantee Trustee being advised by counsel
determines that the action or proceeding so directed may not
lawfully be taken or if the Guarantor Trustee in good faith by
its board of directors or trustees, executive committees or a
trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so
directed would involve the Guarantee Trustee in personal
liability.
(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce the
Guarantee Trustee s rights under this Capital Securities
Guarantee, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee or any other Person. The
Guarantor waives any right or remedy to require that any such
action be brought first against the Issuer or any other Person
before so proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
---------------------------------
This Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------------------
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Capital
Securities Guarantee; provided, however, that the Guarantor shall not
-------- -------
(except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in
all cases as a result of payment under this Capital Securities
Guarantee, if, after giving effect to any such payment, any amounts
are due and unpaid under this Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
------------------------------------
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to the
Capital Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Capital Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
---------------------------------------
So long as any Capital Securities remain outstanding, if (i)
the Guarantor shall be in default with respect to its Guarantee
Payments or other obligations hereunder or (ii) there shall have
occurred and be continuing an Event of Default or a Declaration Event
of Default, then (a) the Guarantor shall not declare or pay any
dividend on, make any distributions with respect to, or redeem,
purchase, or make a liquidation payment with respect to, any of the
Guarantor s capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of the Guarantor s
capital stock or rights to acquire such capital stock in connection
with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or any other contractual obligations of the
Guarantor (other than a contractual obligation ranking pari passu with
---- -----
or junior to the Debentures), (ii) as a result of a reclassification
of the Guarantor s capital stock or rights to acquire such capital
stock or the exchange or conversion of one class or series of the
Guarantor s capital stock or rights to acquire such capital stock for
another class or series of the Guarantor s capital stock or rights to
acquire any such stock, (iii) 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, (iv) dividends and distributions made on the
Guarantor s capital stock or rights to acquire such capital stock with
the Guarantor s capital stock or rights to acquire such capital stock,
or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto), or
make guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Debentures (other
---- -----
than payments under the Guarantees) and (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the
Guarantor which rank pari passu with or junior to the Debentures.
---- -----
SECTION 6.2 Ranking
--------------------
This Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor. By their
acceptance thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Capital Securities Guarantee and the
other terms set forth herein.
The right of the Guarantor to participate in any
distribution of assets of any of its subsidiaries upon any such
subsidiary s liquidation or reorganization or otherwise is subject to
the prior claims of creditors of that subsidiary, except to the extent
the Guarantor may itself be recognized as a creditor of that
subsidiary. Accordingly, the Guarantor s obligations under this
Capital Securities Guarantee will be effectively subordinated to all
existing and future liabilities of the Guarantor s subsidiaries, and
claimants should look only to the assets of the Guarantor for payments
thereunder. This Capital Securities Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any
indenture that the Guarantor may enter into in the future or
otherwise.
If a Declaration Event of Default has occurred and is
continuing, the rights of holders of the Common Securities of the
Issuer to receive payments under the Common Securities Guarantee are
subordinated to the rights of Holders of Capital Securities to receive
Guarantee Payments.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
------------------------
This Capital Securities Guarantee shall terminate as to the
Capital Securities (i) upon full payment of the Redemption
Price of all Capital Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Capital Securities or (iii)
upon full payment of the amounts payable in accordance with the
Declaration upon dissolution of the Issuer. This Capital Securities
Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must
restore payment of any sums paid under the Capital Securities or under
this Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------------------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Capital Securities
Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Indemnified Person by this Capital Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person s negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Issuer or the
Guarantor and upon such information, opinions, reports or
statements presented to the Issuer or the Guarantor by any Person
as to matters the Indemnified Person reasonably believes are
within such other Person s professional or expert competence and
who, if selected by such Indemnified Person, has been selected
with reasonable care by such Indemnified Person, including
information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which
Distributions to Holders of Capital Securities might properly be
paid.
SECTION 8.2 Indemnification
----------------------------
The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive
the resignation or removal of the Guarantee Trustee and the
termination of this Capital Securities Guarantee.
SECTION 8.3 Compensation; Reimbursement of Expenses
---------------------------------------------------
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Capital Securities Guarantee
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith.
The provisions of this Section 8.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of
this Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------------------
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding.
Except in connection with any merger or consolidation of the Guarantor
with or into another entity or any sale, transfer or lease of the
Guarantor s assets to another entity, in each case, to the extent
permitted under the Indenture, the Guarantor may not assign its rights
or
delegate its obligations under this Capital Securities Guarantee
without the prior approval of the Holders of at least a Majority in
liquidation amount of the Capital Securities.
SECTION 9.2 Amendments
-----------------------
Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material
respect (in which case no consent of Holders will be required), this
Capital Securities Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation
amount of the Capital Securities. The provisions of the Declaration
with respect to amendments thereof apply to the giving of such
approval.
SECTION 9.3 Notices
-------------------
All notices provided for in this Capital Securities
Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee
Trustee s mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the Holders of the
Capital Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration Department
Telecopy: (212) 946-8159 or 8160
(b) If given to the Guarantor, at the Guarantor s mailing
address set forth below (or such other address as the Guarantor
may give notice of to the Holders of the Capital Securities and
to the Guarantee Trustee):
Leucadia National Corporation
315 Park Avenue South
New York, NY 10010
Attention: Corporate Secretary
Telecopy: (212) 460-1900
(c) If given to any Holder of the Capital Securities, at
the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 9.4 Benefit
-------------------
This Capital Securities Guarantee is solely for the benefit
of the Guarantee Trustee and the Holders of the Capital Securities
and, subject to Section 3.1(a), is not separately transferable from
the Capital Securities.
SECTION 9.5 Governing Law
-------------------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
LEUCADIA NATIONAL CORPORATION,
as Guarantor
By: /s/ Barbara Lowenthal
-------------------------------
Name: Barbara Lowenthal
Title: Vice President
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ Patricia Kelly
-------------------------------
Name: Patricia Kelly
Title: Vice President
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