Exhibit 4.6
GUARANTEE AGREEMENT
COMMERCE BANCORP, INC.
DATED AS OF MARCH 11, 2002
TABLE OF CONTENTS
Article I DEFINITIONS AND INTERPRETATION 1
Section 1.1 Definitions and Interpretation 1
Article II TRUST INDENTURE ACT 4
Section 2.1 Trust Indenture Act; Application 4
Section 2.2 Lists of Holders of Securities 5
Section 2.3 Reports by the Trust Securities Guarantee Trustee 5
Section 2.4 Periodic Reports to Trust Securities Guarantee Trustee 5
Section 2.5 Evidence of Compliance with Conditions Precedent 5
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 TRUST SECURITIES GUARANTEE
TRUSTEE 6
Section 3.1 Powers and Duties of the Trust Securities Guarantee Trustee 6
Section 3.2 Certain Rights of Trust Securities Guarantee Trustee 8
Section 3.3 Not Responsible for Recitals or Issuance of Trust Securities Guarantee 10
Article IV TRUST SECURITIES GUARANTEE TRUSTEE 10
Section 4.1 Trust Securities Guarantee Trustee; Eligibility 10
Section 4.2 Appointment, Removal and Resignation of Trust Securities Guarantee Trustee 11
Section 4.3 Compensation and Reimbursement 12
Article V GUARANTEE 12
Section 5.1 Guarantee 12
Section 5.2 Waiver of Notice and Demand 12
Section 5.3 Obligations Not Affected 13
Section 5.4 Rights of Holders 14
Section 5.5 Guarantee of Payment 14
Section 5.6 Subrogation 14
Section 5.7 Independent Obligations 14
Article VI LIMITATION OF TRANSACTIONS; SUBORDINATION 15
Section 6.1 Limitation of Transactions 15
Section 6.2 Ranking 15
Article VII TERMINATION 16
Section 7.1 Termination 16
Article VIII INDEMNIFICATION 16
Section 8.1 Exculpation 16
Section 8.2 Indemnification 16
Article IX MISCELLANEOUS 17
Section 9.1 Successors and Assigns 17
Section 9.2 Amendments 17
Section 9.3 Notices 17
Section 9.4 Benefit 18
Section 9.5 Governing Law 18
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Trust Securities Guarantee"),
dated as of March 11, 2002, is executed and delivered by Commerce Bancorp, Inc.,
a New Jersey business corporation (the "Guarantor"), and The Bank of New York, a
New York banking corporation, as trustee (the "Trust Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Trust Preferred Securities and Trust Common Securities (each as defined
herein) of Commerce Capital Trust II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 11, 2002, 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 (i) 4,0000,000 Convertible Trust Preferred
Securities, having an aggregate liquidation amount of $200,000,000, such
convertible trust preferred securities being designated the 5.95% Convertible
Trust Preferred Securities (the "Trust Preferred Securities"), and (ii) 123,712
Trust Common Securities having an aggregate liquidation amount of $6,185,600,
such trust common securities being designated 5.95% Trust Common Securities (the
"Trust Common Securities") (the "Trust Preferred Securities" and the "Trust
Common Securities" are collectively referred to as the "Trust Securities"); and
WHEREAS, as incentive for the Holders to purchase the Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Securities Guarantee, to pay to the Holders
the Guarantee Payments (as defined below) 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 Trust Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Trust
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Trust 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 Trust Securities Guarantee have the same meaning when
used in this Trust Securities Guarantee unless otherwise defined in
this Trust Securities Guarantee;
(c) A term defined anywhere in this Trust Securities Guarantee
has the same meaning throughout;
(d) All references to "the Trust Securities Guarantee" or
"this Trust Securities Guarantee" are to this Guarantee Agreement as
modified, supplemented or amended from time to time;
(e) All references in this Trust Securities Guarantee to
Articles and Sections are to Articles and Sections of this Trust
Securities Guarantee, unless otherwise specified;
(f) A term defined in the Trust Indenture Act has the same
meaning when used in this Trust Securities Guarantee, unless otherwise
defined in this Trust 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 New York, New York are authorized or
required by law, regulation or executive order to remain closed.
"Commerce Bancorp Common Stock" means shares of Commerce Bancorp, Inc.
common stock, par value $1.00 per share.
"Corporate Trust Office" means the office of the Trust Securities
Guarantee Trustee at which the corporate trust business of the Trust Securities
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means any Holder of Trust Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the 5.95% Junior Subordinated Convertible Debentures due
March 11, 2032 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 Trust Securities Guarantee, provided,
however, that except with respect to a default in payment of any Guarantee
Payment, 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 Trust 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 the Trust Securities
to the extent the Issuer has funds on hand legally available therefor at such
time, (ii) the redemption price, including the sum of the liquidation amount of
$50 per Trust Security, plus 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 Trust
Securities called for redemption by the Issuer and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Issuer (other than in
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connection with the distribution of the Debentures to the Holders or the
redemption or conversion of all Trust Securities), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Trust Securities to the date of payment (the "Liquidation Distribution")
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 after satisfying the liabilities owed to the Issuer's creditors as
required by applicable law.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Trust Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Trust 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 Trust Securities
Guarantee Trustee to be an Affiliate of the Guarantor.
"Indemnified Person" means the Trust Securities Guarantee Trustee, any
Affiliate of the Trust Securities Guarantee Trustee, or any officers, directors,
stockholders, members, partners, employees, representatives, nominees,
custodians or agents of the Trust Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of March 11, 2002, among the
Guarantor (the "Debenture Issuer") and The Bank of New York as trustee (the
"Indenture Trustee"), 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
5.01 of the Indenture.
"Majority in Liquidation Amount of the Trust 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
Trust Preferred Securities.
"Officers' Certificate" means, with respect to the Guarantor, a
certificate signed by any of the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Treasurer or an
Assistant Treasurer of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Securities Guarantee (other than pursuant to Section 314(d)(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 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
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Debentures" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to any other trust, partnership or
other entity affiliated with, established by or to be established by the
Guarantor that is a financing vehicle of the Guarantor, if any, in each case
similar to the Issuer.
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"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to capital securities (if any) similar to the Trust Securities
issued by any other trust, partnership or other entity affiliated with,
established by or 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.
"Responsible Officer" means, with respect to the Trust Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
Securities Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Trust Securities 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.
"Successor Trust Securities Guarantee Trustee" means a successor Trust
Securities Guarantee Trustee possessing the qualifications to act as Trust
Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities Guarantee Trustee" means The Bank of New York, a New
York banking corporation, until a Successor Trust Securities Guarantee Trustee
has been appointed and has accepted such appointment pursuant to the terms of
this Trust Securities Guarantee and thereafter means each such Successor Trust
Securities Guarantee Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Trust Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Trust
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.
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SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Trust Securities Guarantee
Trustee (unless the Trust Securities Guarantee Trustee is otherwise the
registrar of the Trust Securities) with a list, in such form as the
Trust 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 Trust 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 Trust Securities
Guarantee Trustee by the Guarantor. The Trust Securities Guarantee
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Trust Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Trust Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15, 2002, the
Trust 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 Trust
Securities Guarantee Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Trust Securities Guarantee Trustee
The Guarantor shall provide to the Trust Securities Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, provided that such compliance certificate shall be delivered on
or before 120 days after the end of each fiscal year of the Guarantor. Delivery
of such reports, information and documents to the Trust Securities Guarantee
Trustee is for informational purposes only and the Trust 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 Trust 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 Trust Securities Guarantee Trustee
annually such evidence of compliance with any conditions precedent and
covenants, if any, provided for in this Trust Securities Guarantee that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of Trust 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 Trust 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 Trust Securities Guarantee Trustee shall, within 90
days after the occurrence of an Event of Default, 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 Trust 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 of the Trust Securities
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Trust Securities Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Trust Securities
Guarantee Trustee shall have received written notice from the
Guarantor, or a Responsible Officer charged with the administration of
this Trust 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
Trust Securities Guarantee 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 TRUST
SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Securities Guarantee Trustee
(a) This Trust Securities Guarantee shall be held by the Trust
Securities Guarantee Trustee for the benefit of the Holders, and the
Trust Securities Guarantee Trustee shall not transfer this Trust
Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Trust
Securities Guarantee Trustee on acceptance by such Successor Trust
Securities Guarantee Trustee of its appointment to act as Successor
Trust Securities Guarantee Trustee. The right, title and interest of
the Trust Securities Guarantee Trustee shall automatically vest in any
Successor Trust 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 Trust Securities Guarantee Trustee.
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(b) If an Event of Default actually known to a Responsible
Officer has occurred and is continuing, the Trust Securities Guarantee
Trustee shall enforce this Trust Securities Guarantee for the benefit
of the Holders.
(c) The Trust 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 Trust Securities
Guarantee, and no implied covenants or obligations shall be read into
this Trust Securities Guarantee against the Trust 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 Trust Securities Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Trust
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 Trust Securities Guarantee shall be
construed to relieve the Trust 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 Trust
Securities Guarantee Trustee shall be determined
solely by the express provisions of this Trust
Securities Guarantee, and the Trust Securities
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Trust Securities
Guarantee, and no implied covenants or obligations
shall be read into this Trust Securities Guarantee
against the Trust Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Trust Securities Guarantee Trustee, the Trust
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 Trust
Securities Guarantee Trustee and conforming to the
requirements of this Trust 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 Trust Securities Guarantee
Trustee, the Trust Securities Guarantee Trustee shall
be under a duty to examine the same to determine
whether or not they conform to the requirements of
this Trust Securities Guarantee (but need not confirm
or investigate the accuracy of mathematical
calculations or other facts stated therein);
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(ii) the Trust 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 Trust
Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trust 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
Trust Preferred Securities at such time outstanding relating
to the time, method and place of conducting any proceeding for
any remedy available to the Trust Securities Guarantee
Trustee, or exercising any trust or power conferred upon the
Trust Securities Guarantee Trustee under this Trust Securities
Guarantee; and
(iv) no provision of this Trust Securities Guarantee
shall require the Trust 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 Trust
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 Trust
Securities Guarantee or indemnity, reasonably satisfactory to
the Trust Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust 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 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 Trust Securities Guarantee may be
sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust
Securities Guarantee, the Trust Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the
Trust 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 Trust Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
reregistration thereof).
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(v) The Trust 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 Trust
Securities Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Trust Securities Guarantee from any court of competent
jurisdiction.
(vi) The Trust Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers
vested in it by this Trust Securities Guarantee at the request
or direction of any Holder, unless such Holder shall have
provided to the Trust Securities Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Trust
Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of
the Trust 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 Trust
Securities Guarantee Trustee; PROVIDED that, nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve the Trust
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 Trust Securities Guarantee.
(vii) The Trust 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 paper or document, but the Trust
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 Trust 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 Trust 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 Trust Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders, and the signature of the Trust 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 Trust Securities
Guarantee Trustee to so act or as to its compliance with any
of the terms and provisions of this Trust Securities
Guarantee, both of which shall be conclusively evidenced by
the Trust Securities Guarantee Trustee's or its agent's taking
such action.
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(x) Whenever in the administration of this Trust
Securities Guarantee the Trust 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 Trust Securities Guarantee Trustee (i) may
request instructions from the Holders of a Majority in
Liquidation Amount of the Trust 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 Trust 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 Trust Securities
Guarantee.
(xii) the Trust Securities Guarantee Trustee may
request that the Guarantor deliver an Officers' Certificate
setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions
pursuant to this Trust Securities Guarantee, which Officers'
Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so
authorized in any such certificate previously delivered and
not superceded.
(b) No provision of this Trust Securities Guarantee shall be
deemed to impose any duty or obligation on the Trust 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 Trust
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 Trust Securities Guarantee Trustee shall
be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Securities
Guarantee
The recitals contained in this Trust Securities Guarantee shall be
taken as the statements of the Guarantor, and the Trust Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Trust
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Trust Securities Guarantee.
ARTICLE IV
TRUST SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Trust Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust 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
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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 Trust Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Trust
Securities Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Trust Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trust Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act, subject to the penultimate paragraph
thereof.
SECTION 4.2 Appointment, Removal and Resignation of Trust Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Securities Guarantee
Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Trust Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Trust
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Trust
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Securities Guarantee Trustee shall hold office
until a Successor Trust Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Trust Securities
Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the
Trust Securities Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Trust
Securities Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Trust
Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Trust Securities Guarantee Trustee.
(d) If no Successor Trust Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Guarantor of an
instrument of removal or resignation, the Trust Securities Guarantee
Trustee resigning or being removed may, at the expense of the
Guarantor, petition any court of competent jurisdiction for appointment
of a Successor Trust Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trust Securities Guarantee Trustee.
(e) No Trust Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Trust Securities
Guarantee Trustee.
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(f) Upon termination of this Trust Securities Guarantee or
removal or resignation of the Trust Securities Guarantee Trustee
pursuant to this Section 4.2, the Guarantor shall pay to the Trust
Securities Guarantee Trustee all amounts due to the Trust Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.
SECTION 4.3 Compensation and Reimbursement
(a) The Guarantor agrees:
(i) to pay the Trust Securities Guarantee Trustee
from time to time such reasonable compensation as the
Guarantor and the Trust Securities Guarantee Trustee shall
from time to time agree in writing for all services rendered
by it hereunder (which compensation will not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust); and
(ii) except as otherwise expressly provided herein,
to reimburse the Trust Securities Guarantee Trustee upon its
request for all reasonable expenses, disbursements and
advances incurred or made by the Trust Securities Guarantee
Trustee in accordance with any provision of this Guarantee
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct.
(b) The provisions of this Section shall survive the
termination of this Trust Securities Guarantee and the removal or
resignation of the Trust Securities Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by 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. Notwithstanding the foregoing, in the case of an
Indenture Event of Default by the Debenture Issuer (as defined in the
Declaration), then the Guarantor will not pay any Distribution, Redemption Price
or Liquidation Distribution to the holders of the Trust Common Securities until
making payment in full and in cash of all accumulated and unpaid Distributions
to holders of the outstanding Trust Preferred Securities for all distribution
periods terminating on or prior thereto, and in the case of payment of the
Redemption Price or a Liquidation Distribution, the full amount of the
Redemption Price or Liquidation Distribution to holders of the outstanding Trust
Preferred Securities then called for redemption or liquidation.
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SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust
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 Trust Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Trust
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 (as defined in Annex I of the Declaration) or any other
sums payable under the terms of the Trust Securities or the extension
of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust 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 Trust 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 Trust
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred;
(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.
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No setoff, counterclaim, reduction or diminution of any obligation, or any
defense of any kind or nature that the Guarantor has or may have against any
Holder (except the defense of payment to such Holder) shall be available
hereunder to the Guarantor against such Holder to reduce the payments to it
under this Trust Securities Guarantee.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the
Trust Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Trust Securities Guarantee Trustee in respect of this Trust Securities
Guarantee or exercising any trust or power conferred upon the Trust
Securities Guarantee Trustee under this Trust Securities Guarantee,
except that the Trust Securities Guarantee Trustee may refuse to follow
any direction it believes is unjustly prejudicial to other holders not
taking part in the direction, is unlawful, or would subject the Trust
Securities Guarantee Trustee to personal liability.
(b) Any Holder may institute a legal proceeding directly
against the Guarantor to enforce the Trust Securities Guarantee
Trustee's rights under this Trust Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Trust 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 Trust Securities Guarantee creates a guarantee of payment and not
of collection. If an event of default exists with respect to the Debentures that
is attributable to the Guarantor's failure to pay principal of or an interest
payment on the Debentures on a payment date, then any Holder may institute a
direct action against the Guarantor pursuant to the terms of the Indenture for
enforcement of payment to that Holder of the principal of or interest on such
Debentures having a principal amount equal to the aggregate liquidation amount
of the Trust Securities of the Holder.
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 Trust 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 Trust Securities Guarantee, if, at the time of
any such payment, any amounts are due and unpaid under this Trust 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 Trust
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Trust
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust 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), (ii) make any payment
of principal, interest or premium, if any, 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 any 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 (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 shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Trust Securities Guarantee, (d) a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another series of
the Guarantor's capital stock, (e) the purchase of fractional shares resulting
from a reclassification of the Guarantor's capital stock, (f) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged and (g) 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) if at such time (i) there shall have occurred any event that would be an
Indenture Event of Default, (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 Trust 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 Section 16.01 of the Indenture and any such
extension shall be continuing.
SECTION 6.2 Ranking
This Trust 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 and
any Other Guarantee, and (iii) senior to the Guarantor's capital stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price (as defined in Annex I of the Declaration) of all
outstanding Trust Preferred Securities, (ii) upon liquidation of the Issuer, the
full payment of the amounts (including all accrued and unpaid interest and other
amounts) payable in accordance with the Declaration, (iii) the distribution of
the Debentures to the Holders and the holders of Trust Common Securities or (iv)
the distribution of Commerce Bancorp Common Stock upon conversion of all
outstanding Trust Securities. Notwithstanding the foregoing, this Trust
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 Trust Securities or under this Trust Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith
in accordance with this Trust 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 Trust
Securities Guarantee or by law, except that an Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the 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, including taxes (other than taxes based upon
the income of the Trust Guarantee Trustee), 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
Trust Securities Guarantee and the resignation or removal of the Trust
Securities Guarantee Trustee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust 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 Trust Securities Guarantee may only be amended with the prior
approval of the Holders of a Majority in Liquidation Amount of the Trust
Preferred Securities. 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.
SECTION 9.3 Notices
All notices provided for in this Trust Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
faxed 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 Trust
Securities Guarantee Trustee):
Commerce Capital Trust II
c/o Commerce Bancorp, Inc.
Commerce Atrium, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., Executive Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If given to the Trust Securities Guarantee Trustee, at the
Trust Securities Guarantee Trustee's mailing address set forth below
(or such other address as the Trust Securities Guarantee Trustee may
give notice of to the Holders and the Issuer):
The Bank of New York
Corporate Trust Division
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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(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 Trust Securities Guarantee
Trustee):
Commerce Bancorp, Inc.
Commerce Atrium, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., Executive Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(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, faxed 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 Trust Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Trust Securities.
SECTION 9.5 Governing Law
THIS TRUST 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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
COMMERCE BANCORP, INC., as Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇
Title: Chairman and President
THE BANK OF NEW YORK, as Trust Securities Guarantee Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
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