EXHIBIT 4.5
PREFERRED SECURITIES GUARANTEE AGREEMENT
STERLING BANCSHARES, INC.
DATED AS OF [_____________]
CROSS-REFERENCE TABLE*/
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
------------------- -------------------
310(a) ............................. 4.1(a)
310(b) ............................. 4.1(c), 2.8
310(c) ............................. Inapplicable
311(a) ............................. 2.2(b)
311(b) ............................. 2.2(b)
311(c) ............................. Inapplicable
312(a) ............................. 2.2(a)
312(b) ............................. 2.2(b)
313 ............................. 2.3
314(a) ............................. 2.4
314(b) ............................. Inapplicable
314(c) ............................. 2.5
314(d) ............................. Inapplicable
314(e) ............................. 1.1, 2.5, 3.2
314(f) ............................. 2.1, 3.2
315(a) ............................. 3.1(d)
315(b) ............................. 2.7
315(c) ............................. 3.1
315(d) ............................. 3.1(d)
316(a) ............................. 1.1, 2.6, 5.4
316(b) ............................. 5.3
316(c) ............................. Inapplicable
317(a) ............................. Inapplicable
317(b) ............................. Inapplicable
318(a) ............................. 2.1(b)
---------------------------
*/ This Cross-Reference Table does not constitute part of the Preferred
Securities Guarantee Agreement and shall not affect the interpretation of any of
its terms or provisions.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION.......................................1
Section 1.1 Definitions and Interpretation..................................1
ARTICLE II TRUST INDENTURE ACT.................................................5
Section 2.1 Trust Indenture Act; Application................................5
Section 2.2 Lists of Holders of Securities..................................5
Section 2.3 Reports by the Preferred Securities Guarantee Trustee...........5
Section 2.4 Periodic Reports to Preferred Securities Guarantee Trustee......5
Section 2.5 Evidence of Compliance with Conditions Precedent................6
Section 2.6 Events of Default; Waiver.......................................6
Section 2.7 Event of Default; Notice........................................6
Section 2.8 Conflicting Interests...........................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES
GUARANTEE TRUSTEE..............................................................7
Section 3.1 Powers and Duties of the Preferred Securities Guarantee
Trustee.........................................................7
Section 3.2 Certain Rights of Preferred Securities Guarantee Trustee........8
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee...........................................10
ARTICLE IV PREFERRED SECURITIES GUARANTEE TRUSTEE.............................11
Section 4.1 Preferred Securities Guarantee Trustee; Eligibility............11
Section 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee..............................................11
ARTICLE V GUARANTEE...........................................................12
Section 5.1 Guarantee......................................................12
Section 5.2 Waiver of Notice and Demand....................................12
Section 5.3 Obligations Not Affected.......................................12
Section 5.4 Rights of Holders..............................................13
Section 5.5 Guarantee of Payment...........................................14
Section 5.6 Subrogation....................................................14
Section 5.7 Independent Obligations........................................14
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION..........................14
Section 6.1 Limitation of Transactions.....................................14
Section 6.2 Ranking........................................................15
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ARTICLE VII TERMINATION.......................................................15
Section 7.1 Termination....................................................15
ARTICLE VIII INDEMNIFICATION..................................................15
Section 8.1 Exculpation....................................................15
Section 8.2 Indemnification................................................16
ARTICLE IX MISCELLANEOUS......................................................16
Section 9.1 Successors and Assigns.........................................16
Section 9.2 Amendments.....................................................16
Section 9.3 Notices........................................................16
Section 9.4 Benefit........................................................17
Section 9.5 Governing Law..................................................17
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of [_______________], is executed and delivered by STERLING BANCSHARES, INC., a
Texas corporation (the "Guarantor"), and Bankers Trust Company, a New York
banking corporation, as trustee (the "Preferred Securities Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of STERLING BANCSHARES CAPITAL TRUST
[__], a Delaware statutory business trust (the "Issuer").
RECITALS:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of [_______________], among the trustees of the Issuer,
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 [_______________] preferred securities, having an aggregate
liquidation amount of [_______________] (assuming the Underwriters' over-
allotment option is not exercised), such preferred securities being designated
the [_______]% Preferred Securities (the "Preferred Securities"); and
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below), and the Guarantor agrees to make certain
other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is executing and delivering a guarantee agreement
(the "Common Securities Guarantee"), with substantially identical terms to this
Preferred Securities Guarantee, for the benefit of the holders of the Common
Securities (as defined herein), except that if an Event of Default (as defined
in the Declaration) 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 extent and in the manner set forth in the
Common Securities Guarantee, to the rights of holders of Preferred Securities to
receive Guarantee Payments under this Preferred Securities Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Preferred Securities Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
------------------------------
Section 1.1 Definitions and Interpretation. In this Preferred Securities
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act (as defined below) has
the same meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in The City of New York or Houston, Texas are
authorized or required by law or executive order to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Securities
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the [__]% Junior Subordinated Deferrable Interest
Debentures due [_______________] held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
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"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accumulated and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer has funds on hand legally available therefor at such time,
(ii) the redemption price, including all accumulated and unpaid Distributions to
the date of redemption (the "Redemption Price") to the extent the Issuer has
funds on hand legally available therefor at such time, with respect to any
Preferred Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary termination and liquidation of the Issuer (other than
in connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer has
funds on hand legally available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to the Common
Securities or any guarantee payment under any Other Common Securities Guarantees
shall be made until the Holders shall be paid in full the Guarantee Payments to
which they are entitled under this Preferred Securities Guarantee.
"Holder" shall mean 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 or any Person known to a Responsible Officer of the
Preferred Securities Guarantee Trustee to be an Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Securities Guarantee Trustee, any
Affiliate of the Preferred Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of [_______________], among the
Guarantor (the "Debenture Issuer") and Bankers Trust Company, as trustee (the
"Indenture Trustee"), and any indenture supplemental thereto pursuant to which
the Debentures are to be issued to the Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in Section 5.1
of the Indenture.
"Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Declaration or by the Trust Indenture Act, a vote by
Holder(s) of more than 50% of the aggregate liquidation amount of all Preferred
Securities.
"Officers' Certificate" means, with respect to the Guarantor, a certificate
signed by the Chairman, a Vice Chairman, the Chief Executive Officer, the
President, a Vice President, the Comptroller, the Secretary or an Assistant
Secretary of the Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Preferred
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Securities Guarantee (other than pursuant to Section 314(a)(4) of the Trust
Indenture Act) shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in the
Officers' Certificate are based;
(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.
"Other Common Securities Guarantees" shall have the same meaning as "Other
Guarantees" as defined in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by the
Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor with
respect to capital securities (if any) similar to the Preferred Securities
issued by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
"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.
"Preferred Securities Guarantee Trustee" means Bankers Trust Company, a New
York banking corporation, until a Successor Preferred Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Preferred Securities Guarantee and thereafter means each such
Successor Preferred Securities Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Securities Guarantee Trustee with direct responsibility for the
administration of this Preferred 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 Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Preferred
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 Preferred Securities
Guarantee Trustee (unless the Preferred Securities Guarantee Trustee is
otherwise the registrar of the Preferred Securities) with a list, in such
form as the Preferred Securities Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such
date, (i) within one Business Day after January 15 and July 15 of each
year, 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 Preferred Securities
Guarantee Trustee, 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 Preferred
Securities Guarantee Trustee by the Guarantor. The Preferred Securities
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Preferred Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a).
Section 2.3 Reports by the Preferred Securities Guarantee Trustee. Within
60 days after [_____] of each year, commencing [_______________], the Preferred
Securities 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 Preferred
Securities Guarantee Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
Section 2.4 Periodic Reports to Preferred Securities Guarantee Trustee.
The Guarantor shall provide to the Preferred Securities Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by
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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. Delivery of such
reports, information and documents to the Preferred Securities Guarantee Trustee
is for informational purposes only and the Preferred Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates).
Section 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Securities Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred 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) may be given in
the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of all
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
Preferred 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 Event of Default; Notice.
(a) The Preferred Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Preferred
Securities Guarantee, mail by first class postage prepaid, to all Holders,
notices of all defaults actually known to a Responsible Officer, unless
such defaults have been cured before the giving of such notice, provided,
that, except in the case of default in the payment of any Guarantee
Payment, the Preferred Securities 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 a Responsible
Officer in good faith determines that the withholding of such notice is in
the interests of the Holders.
(b) The Preferred Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Preferred
Securities Guarantee Trustee shall have received written notice from the
Guarantor, or a Responsible Officer charged with the administration of this
Preferred Securities Guarantee shall have obtained actual knowledge, of
such Event of Default.
Section 2.8 Conflicting Interests. The Declaration shall be deemed to be
specifically described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Preferred Securities Guarantee
Trustee.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders, and
the Capital Securities Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Preferred Securities
Guarantee Trustee on acceptance by such Successor Preferred Securities
Guarantee Trustee of its appointment to act as Successor Preferred
Securities Guarantee Trustee. The right, title and interest of the
Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of
such Successor Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer has occurred and is continuing, the Preferred Securities Guarantee
Trustee shall enforce this Preferred Securities Guarantee for the benefit
of the Holders.
(c) The Preferred Securities 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 Preferred Securities Guarantee, and
no implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Securities Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer, the Preferred
Securities Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Preferred 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 Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities 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 Preferred
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Preferred Securities Guarantee, and
the Preferred Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be
read into this
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Preferred Securities Guarantee against the Preferred
Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Securities Guarantee Trustee, the Preferred
Securities 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 Preferred Securities Guarantee Trustee and conforming
to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished
to the Preferred Securities Guarantee Trustee, the Preferred
Securities Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Securities Guarantee Trustee shall not
be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Preferred
Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Securities 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 a Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Preferred Securities Guarantee
Trustee, or exercising any trust or power conferred upon the
Preferred Securities Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Securities 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 Preferred
Securities 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 Preferred
Securities Guarantee or indemnity, reasonably satisfactory to the
Preferred Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
Section 3.2 Certain Rights of Preferred Securities Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Securities 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
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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 Preferred Securities Guarantee may be sufficiently evidenced
by an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the
Preferred Securities 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 Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Preferred Securities 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 Preferred Securities 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 Preferred Securities Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Preferred Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers vested
in it by this Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to
the Preferred Securities Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Preferred Securities
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Preferred
Securities 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 Preferred Securities Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken
to relieve the Preferred Securities Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Preferred Securities
Guarantee.
(vii) The Preferred Securities 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
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paper or document, but the Preferred Securities Guarantee Trustee,
in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Securities 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 Preferred Securities 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 Preferred Securities Guarantee
Trustee or its agents hereunder shall bind the Holders, and the
signature of the Preferred Securities 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 Preferred Securities Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of
this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Securities Guarantee Trustee
shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder,
the Preferred Securities Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount
of the Preferred 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 Preferred Securities Guarantee Trustee shall not
be liable for any action taken, suffered, or omitted to be taken by
it in good faith, without negligence, and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities
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 Preferred Securities 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 Preferred
Securities Guarantee Trustee shall be construed to be a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee. The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the Preferred
Securities Guarantee Trustee does not assume any responsibility for their
correctness. The Preferred Securities Guarantee Trustee makes no representation
as to the validity or sufficiency of this Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
Section 4.1 Preferred Securities Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Securities 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 a corporation 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 Preferred Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Preferred
Securities Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Preferred Securities 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 Preferred Securities
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Preferred
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold office
until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from
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office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such
Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d) If no Successor Preferred Securities 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 Preferred Securities Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of
a Successor Preferred Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Preferred Securities Guarantee Trustee.
(e) No Preferred Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Securities
Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee
pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
Securities Guarantee Trustee all amounts due to the Preferred Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
Section 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Preferred 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 Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
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(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, 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 (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
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
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments 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
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred
Securities Guarantee Trustee in respect of this Preferred Securities
Guarantee or exercising any trust or power conferred upon the Preferred
Securities Guarantee Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Securities Guarantee Trustee fails to
enforce such Preferred Securities Guarantee, any Holder may institute a
legal proceeding directly against the Guarantor to enforce the Preferred
Securities Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the
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Issuer, the Preferred Securities Guarantee Trustee or any other person or
entity. The Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity before
proceeding directly against the Guarantor.
Section 5.5 Guarantee of Payment. This Preferred 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 against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred 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 Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred 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 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 Preferred 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 Preferred Securities
remain outstanding, the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock (which includes common and
preferred stock) or (other than (a) dividends or distributions in shares of, or
options, warrants, rights to subscribe for or purchase shares of, common stock
of the Guarantor, (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) as a result of a reclassification of one class or series
of the Guarantor's capital stock solely into another class or series of the
Guarantor's capital stock, (d) the purchase of fractional interests in shares of
the Guarantor's capital stock resulting from such a reclassification or pursuant
to the conversion or exchange provisions of such capital stock or any security
convertible into or exchangeable for shares of the Guarantor's capital stock,
and (e) purchases of common stock related to the issuance of common stock or
rights under any of the Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans), (ii) make any
payment of principal of, or premium, if any, or interest on, or repay,
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to
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any guarantee (other than payments under the Preferred Securities Guarantee or
the Common Guarantee) by the Guarantor of the debt securities of any subsidiary
of the Guarantor (including Other Guarantees) if such guarantee ranks pari passu
with or junior in right of payment to the Debentures, if at such time (i) there
shall have occurred any event of which the Guarantor has actual knowledge that
(a) is, or with the giving of notice or the lapse of time, or both, would be an
Indenture Event of Default and (b) in respect of which the Guarantor shall not
have taken reasonable steps to cure, (ii) if such Debentures are held by the
Property Trustee, the Guarantor shall be in default with respect to its payment
of any obligations under this Preferred Securities Guarantee or (iii) the
Guarantor shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Article IV of the [___]
Supplemental Indenture to the Indenture and any such extension shall be
continuing.
Section 6.2 Ranking. This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to Senior Indebtedness (as defined in
the Indenture), to the same extent and in the same manner that the Debentures
are subordinated to Senior Indebtedness pursuant to the Indenture, (ii) pari
passu with the Debentures, the Other Debentures, the Common Securities
Guarantee, any Other Common Securities Guarantee and any Other Guarantee, and
(iii) senior to the Guarantor's capital stock.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Preferred Securities Guarantee shall
terminate (i) upon full payment of the Redemption Price (as defined in the
Declaration) of all Preferred Securities or (ii) upon liquidation of the Issuer,
the full payment of the amounts payable in accordance with the Declaration or
the distribution of the Debentures to the Holders and the holders of the Common
Securities. Notwithstanding the foregoing, this Preferred Securities Guarantee
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 under the Preferred
Securities or under this Preferred 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, expense, liability, 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 Preferred 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
Preferred Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any
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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 Guarantor and upon such information,
opinions, reports or statements presented to 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 has been selected with
reasonable care by or on behalf of the Guarantor, 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 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 termination of
this Preferred Securities Guarantee.
Section 8.3 Fees and Expenses. The Guarantor covenants and agrees to pay
to the Preferred Securities Guarantee Trustee from time to time, and the
Preferred Securities Guarantee Trustee shall be entitled to, the fees and
expenses agreed in writing between the Guarantor and the Preferred Securities
Guarantee Trustee, and will further pay or reimburse the Preferred Securities
Guarantee Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Preferred Securities Guarantee Trustee in
accordance with any of the provisions hereof or any other documents executed in
connection herewith (including the reasonable compensation and the reasonable
expenses and disbursements of its counsel and of all persons not regularly in
its employ). The obligations of the Guarantor under this Section 8.3 to
compensate the Preferred Securities Guarantee Trustee and to pay or reimburse
the Preferred Securities Guarantee Trustee for reasonable expenses,
disbursements and advances shall survive the satisfaction and discharge of this
Preferred Securities Guarantee or the earlier resignation or removal of the
Preferred Securities Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders then outstanding.
Section 9.2 Amendments. Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Preferred Securities Guarantee may only be
amended with the prior approval of the Holders of a Majority in liquidation
amount of the Preferred Securities (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined). The
provisions of the Declaration with respect to consents to amendments thereof
(whether at a meeting or otherwise) shall apply to the giving of such approval.
Prior to the execution of any amendment to this Preferred Securities Guarantee,
the Preferred Securities Guarantee Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Preferred Securities Guarantee and
that all conditions precedent to such execution and delivery have been
satisfied. The Preferred Securities Guarantee Trustee may, but shall not be
obligated to enter into any such amendment which affects the Preferred
Securities Guarantee Trustee's and the Holders' rights, duties or immunities
under this Preferred Securities Guarantee.
Section 9.3 Notices. All notices provided for in this Preferred
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 Issuer, in care of the Administrative Trustee
at the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders and the Preferred Securities
Guarantee Trustee):
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Sterling Bancshares Capital Trust I
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ Bridgwater
Administrative Trustee
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If given to the Preferred Securities Guarantee Trustee, at
the Preferred Securities Guarantee Trustee's mailing address set forth
below (or such other address as the Preferred Securities Guarantee Trustee
may give notice of to the Holders and the Issuer):
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Market Services
Administration Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, or
(▇▇▇) ▇▇▇-▇▇▇▇
(c) 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 and the Preferred Securities Guarantee Trustee):
Sterling Bancshares, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman and CEO
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If given to any Holder, 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 Preferred Securities Guarantee is solely
for the benefit of the Holders and, subject to Section 3.1(a), is not separately
transferable from the Preferred Securities.
Section 9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
STERLING BANCSHARES, INC., as Guarantor
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
BANKERS TRUST COMPANY, as Preferred Securities
Guarantee Trustee
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
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