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EXHIBIT 4.10
COMMON SECURITIES GUARANTEE AGREEMENT
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common
Securities Guarantee"), dated as of April 1, 1998, is executed and delivered by
Union Pacific Corporation, a Utah corporation (the "Guarantor"), for the benefit
of the Holders (as defined herein) from time to time of the Common Securities
(as defined in the Declaration (as defined herein)) of Union Pacific Capital
Trust, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of April 1, 1998, among the Trustees of the
Issuer named therein, the Guarantor, 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 927,835 Common Securities, having an aggregate
stated liquidation amount of $46,391,750, designated the 6 1/4% Convertible
Common Securities (liquidation amount $50 per each of the Convertible Common
Securities);
WHEREAS as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay on a
subordinated basis to the Holders of the Common Securities the Guarantee Pay-
ments (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 in substantially identical terms to this Common Securities
Guarantee for the benefit of the holders of the Preferred Securities (the
"Guarantee") except that if a Debenture Event of Default or a Declaration Event
of Default (each as defined herein) (or an event that, with passage of time,
would become a Debenture Event of Default) shall have occurred and be
continuing, the rights of Holders of the Common Securities to receive Guarantee
Payments under this Common Securities Guarantee are subordinated to the rights
of holders of Preferred Securities to receive Guarantee Payments under the
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the
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Guarantor executes and delivers this Common Securities Guarantee for the benefit
of the Holders.
ARTICLE I
SECTION 1.01. In this Common Securities Guarantee, unless the
context otherwise requires, the terms set forth below shall have the following
meanings.
(a) capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01 or the Guarantee;
(b) terms defined in the Declaration as at the date of
execution of this Common Securities Guarantee have the same meaning
when used in this Common Securities Guarantee unless otherwise defined
in this Common Securities Guarantee or in the Guarantee;
(c) a term defined anywhere in this Common
Securities Guarantee has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the
plural and vice versa.
"Debenture Event of Default" means an Event of
Default under the Indenture.
"Declaration Event of Default" means an Event of
Default under the Declaration.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions which are required to be paid on such Common Securities,
to the extent that the Issuer shall have funds on hand available therefor at
such time, (ii) the applicable
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Redemption Price (as defined in the Indenture) with respect to any Common
Securities called for redemption by the Issuer, to the extent that the Issuer
has funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders or the redemption
of all the Common Securities), the lesser of (a) the aggregate liquidation
amount thereof plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution") to the extent the
Issuer has funds available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to Holders upon liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any outstanding Common Securities.
"Senior Debt" shall have the meaning set forth in
the Indenture.
ARTICLE II
SECTION 2.01. The Guarantor irrevocably and unconditionally
agrees to pay in full on a subordinated basis to the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, in coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debt regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert other than the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.02. If a Debenture Event of Default or a Declaration
Event of Default (or an event that, with passage of time, would become a
Debenture Event of Default) shall have occurred and be continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Guarantee.
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SECTION 2.03. The Guarantor hereby waives notice of acceptance
of this Common 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 2.04. The obligations, covenants, agreements and
duties of the Guarantor under this Common 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 Common
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, the amount payable upon
redemption, Liquidation Distribution or any other sums payable under
the terms of the Common Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an extension of time
for payment of Distributions, that results from the extension of any
interest payment period on 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 Common 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 Common Securities;
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(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 2.04 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 2.05. The Guarantor expressly acknowledges that any
Holder of Common Securities may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Common Securities Guarantee,
without first instituting a legal proceeding against the Issuer or any other
Person.
SECTION 2.06. This Common Securities Guarantee creates a
guarantee of payment and not of collection. This Common Securities Guarantee
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.
SECTION 2.07. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Common Securities Guarantee and shall
have right to waive payment by the Issuer pursuant to Section 2.01; 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 Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common 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 2.08. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Common Securities and that
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the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.04 hereof.
SECTION 2.09. The Guarantor acknowledges its obligation to
issue and deliver common stock upon the conversion of the Common Securities.
ARTICLE III
SECTION 3.01. So long as any Common Securities remain
outstanding, if (i) there shall have occurred and be continuing a Debenture
Event of Default, a Declaration Event of Default or an event that, with the
giving of notice or the lapse of time or both, would constitute a Debenture
Event of Default or a Declaration Event of Default or (ii) a selection by the
Guarantor of a Deferral Period as provided in the Indenture and such period, or
any extension thereof, shall be continuing, then (a) the Guarantor shall not de-
clare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than stock dividends paid by the Guarantor which
consist of the stock of the same class as that on which the dividend is being
paid), (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 in interest to the Debentures
and (c) shall not make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior in interest to the Debentures (in each
case, other than (A) dividends or distributions in Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' 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, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Guarantor of its
obligations under any employee benefit plan or any other contractual obligation
of the Guarantor (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for
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another class or series of the Guarantor's capital stock or (F) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged).
SECTION 3.02. This Common Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank subordinate to all Senior
Debt of the Guarantor to the same extent that the Debentures (as defined in the
Indenture) are subordinated pursuant to the Indenture.
ARTICLE IV
SECTION 4.01. This Common Securities Guarantee shall terminate
upon (i) full payment of the amount payable upon redemption of the Common
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Common Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders in exchange
for all of the Common Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Common Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders.
SECTION 5.02. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Common Securities Guarantee may only be amended with the
prior approval of the Holders of a majority in liquidation amount of the
outstanding Common Securities. The provisions of Section 12.02 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
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SECTION 5.03. All notices provided for in this Common
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by registered or certified
mail, as follows:
(a) if given to the Issuer, in care of the Regular
Trustees at the Issuer's mailing address set forth
below (or such other address as the Issuer may give
notice of to the Holders of the Common Securities):
L. White Mathews, III
Gary M. Stuart
Joseph E. O'Connor, Jr.
Union Pacific Capital Trust
c/o Union Pacific Corporation
1717 Main Street, Suite 5900
Dallas, Texas 75201
Attention: Treasurer
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth be low (or such other address as
the Guarantor may give notice of to the Holders of
the Common Securities):
Union Pacific Corporation
1717 Main Street, Suite 5900
Dallas, Texas 75201
Attention: Treasurer
(c) if given to any Holder of Common 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 5.04. This Common Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.
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SECTION 5.05. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
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THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
UNION PACIFIC CORPORATION,
as Guarantor
By:
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Name:
Title: