Exhibit 4.14
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Between
ITT Hartford Group, Inc.
(as Guarantor)
and
Wilmington Trust Company
(as Trustee)
dated as of
__________, 1996
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS
SECTION 101. Definitions............................................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application.......................................................6
SECTION 202. List of Holders........................................................................6
SECTION 203. Reports by the Guarantee Trustee.......................................................7
SECTION 204. Periodic Reports to Guarantee Trustee..................................................7
SECTION 205. Evidence of Compliance with Conditions Precedent
......................................................................................7
SECTION 206. Events of Default; Waiver..............................................................7
SECTION 207. Event of Default; Notice...............................................................8
SECTION 208. Conflicting Interests..................................................................8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee.............................................8
SECTION 302. Certain Rights of Guarantee Trustee...................................................11
SECTION 303. Indemnity.............................................................................13
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility........................................................13
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee.....................................................................14
ARTICLE V
GUARANTEE
SECTION 501. Guarantee.............................................................................15
SECTION 502. Waiver of Notice and Demand...........................................................15
SECTION 503. Obligations Not Affected..............................................................15
SECTION 504. Rights of Holders.....................................................................16
SECTION 505. Guarantee of Payment..................................................................17
SECTION 506. Subrogation...........................................................................17
SECTION 507. Independent Obligations...............................................................18
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination.........................................................................18
SECTION 602. Pari Passu Guarantees.................................................................18
i
Page
ARTICLE VII ----
TERMINATION
SECTION 701. Termination...........................................................................18
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns................................................................19
SECTION 802. Amendments............................................................................19
SECTION 803. Notices...............................................................................19
SECTION 804. Benefit...............................................................................20
SECTION 805. Interpretation........................................................................20
SECTION 806. GOVERNING LAW.........................................................................21
ii
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ---------
310(a)................................................................... 401(a)
310(b)................................................................... 401(c), 208
310(c)................................................................... Inapplicable
311(a)................................................................... 202(b)
311(b)................................................................... 202(b)
311(c)................................................................... Inapplicable
312(a)................................................................... 202(a)
312(b)................................................................... 202(b)
313 ................................................................... 203
314(a)................................................................... 204
314(b)................................................................... Inapplicable
314(c)................................................................... 205
314(d)................................................................... Inapplicable
314(e)................................................................... 101, 205, 302
314(f)................................................................... 201, 302
315(a)................................................................... 301(d)
315(b)................................................................... 207
315(c)................................................................... 301
315(d)................................................................... 301(d)
316(a)................................................................... 101, 206, 504
316(b)................................................................... 503
316(c)................................................................... 802
317(a)................................................................... Inapplicable
317(b)................................................................... Inapplicable
318(a)................................................................... 201(b)
318(b)................................................................... 201
318(c)................................................................... 201(a)
- -----------------------
* This cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
GUARANTEE AGREEMENT
-------------------
This GUARANTEE AGREEMENT, dated as of _________, 1996, is
executed and delivered by ITT Hartford Group, Inc., a Delaware corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking corporation
organized under the laws of the State of Delaware, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securi ties (as defined herein) of Hartford Capital II, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of ______, 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 $__________ aggregate liquidation preference of its __% Preferred
Securities, Series __ 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 Wilmington Trust Company, 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 101. 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 con trolled 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" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common
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 ser vices (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, directly or indirectly, as
obligor or otherwise.
2
"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, (ii) the re demption price, including all accrued and unpaid
Distribu tions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemp tion by the Issuer to the extent
the Issuer shall have funds on hand available therefor, 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 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 Wilmington Trust Company, 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 _____, 1996, as supplemented and
3
amended between the Guarantor and Wilmington Trust Company, as trustee.
"List of Holders" has the meaning specified in
Section 202(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, an 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 condi tion and the definitions
relating thereto;
(b) a brief statement of the nature and scope of
the examination or investigation undertaken by each
officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
"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
4
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 Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"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 Company, (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
401.
"Trust Indenture Act" means the Trust Indenture
Act of 1939, as amended.
5
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. 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 202. List of Holders.
---------------
(a) The Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee (a)
semiannually, on or before February 15 and
August 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.
6
SECTION 203. Reports by the Guarantee Trustee.
--------------------------------
Within 60 days after July 1 of each year, the Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 204. Periodic Reports to Guarantee
-----------------------------
Trustee.
-------
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information, if any, as required by Section 314 of the Trust Indenture Act and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 205. 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 206. 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.
7
SECTION 207. 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 208. 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 301. 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 504(iv) or to a
Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its
8
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 206), 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,
9
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 con forming to
the requirements of this Guarantee Agreement; but in the case
of any such certifi cates 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.
10
SECTION 302. Certain Rights of Guarantee
---------------------------
Trustee.
-------
(a) Subject to the provisions of Section 301:
(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 believed by it to be genuine
and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel,
and the 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
11
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
302(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
12
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 303. 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 401. 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 million U.S. dollars ($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.
13
(b) If at any time the Guarantee Trustee shall cease to
be eligible to so act under Section 401(a), the
Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 402(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 402. Appointment, Removal and Resignation of the
-------------------------------------------
Guarantee Trustee.
------------------
(a) Subject to Section 402(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 402 within 60 days after delivery to the
Guarantor of an instrument of resignation, the
resigning
14
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 501. 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 502. 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 503. 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;
15
(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 503 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 504. 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;
16
(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 505. 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 506. 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
pay ment by the Issuer pursuant to Section 501; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 507. 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
17
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 503 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. 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 602. 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 Hartford Capital II, Hartford Capital III and
Hartford Capital IV.
ARTICLE VII
TERMINATION
SECTION 701. 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 ex change 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.
18
ARTICLE VIII
------------
MISCELLANEOUS
SECTION 801. 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 pursu ant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 802. 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 out standing 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 803. Notices.
-------
Any notice, request or other communication required or
permitted to be given hereunder shall be in writ ing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
ITT Hartford Group, Inc.
Hartford Plaza
Hartford, Connecticut 06115
Facsimile No.: (860) 547-5966
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
19
address as the Guarantee Trustee on behalf of the
Issuer may give notice to the Holders:
Hartford Capital II
c/o ITT Hartford Group, Inc.
Hartford Plaza
Hartford, Connecticut 06115
Facsimile No: (860) 547-5966
Attention: Treasurer
with a copy to:
Wilmington Trust Company
1105 Market Street
Wilmington, Delaware
Facsimile No.: (___) ________
Attention: Corporate Trust Department
(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 804. Benefit.
-------
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Preferred Securities.
SECTION 805. 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 101;
20
(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 806. 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.
21
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
ITT HARTFORD GROUP, INC.
By: ______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Guarantee Trustee
By: _______________________________________
Name:
Title:
22