GUARANTEE AGREEMENT by and between NORTHWAY FINANCIAL, INC. and WILMINGTON TRUST COMPANY Dated as of March 22, 2007
Exhibit
99.3
_________________________________________________
by
and between
▇▇▇▇▇▇▇▇
FINANCIAL, INC.
and
WILMINGTON
TRUST COMPANY
Dated
as of March 22, 2007
_________________________________________________
This
GUARANTEE AGREEMENT (this “Guarantee”), dated as of March 22, 2007, is
executed and delivered by ▇▇▇▇▇▇▇▇ Financial, Inc., a New Hampshire
corporation (the “Guarantor”), and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the “Guarantee Trustee”), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of ▇▇▇▇▇▇▇▇ Capital Trust III, a Delaware statutory trust
(the “Issuer”).
WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
dated as of the date hereof among Wilmington Trust Company, not in its
individual capacity but solely as institutional trustee, the administrators
of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof those undivided beneficial interests,
having an aggregate liquidation amount of $10,000,000.00 (the “Capital
Securities”); and
WHEREAS,
as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and
conditions set forth herein;
NOW,
THEREFORE, in consideration of the purchase by each Holder of the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit
of
the Holders.
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
Section
1.1. Definitions
and Interpretation.
In
this
Guarantee, unless the context otherwise requires:
(a) capitalized
terms used in this Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) a
term
defined anywhere in this Guarantee has the same meaning throughout;
(c) all
references to “the Guarantee” or “this Guarantee” are to this Guarantee as
modified, supplemented or amended from time to time;
(d) all
references in this Guarantee to “Articles” or “Sections” are to Articles or
Sections of this Guarantee, unless otherwise specified;
(e) terms
defined in the Declaration as at the date of execution of this Guarantee have
the same meanings when used in this Guarantee, unless otherwise defined in
this
Guarantee or unless the context otherwise requires; and
(f) a
reference to the singular includes the plural and vice versa.
“Affiliate”
has
the
same meaning as given to that term in Rule 405 of the Securities Act of
1933, as amended, or any successor rule thereunder.
“Beneficiaries”
means
any Person to whom the Issuer is or hereafter becomes indebted or
liable.
“Capital
Securities”
has
the
meaning set forth in the recitals to this Guarantee.
“Common
Securities”
means
the common securities issued by the Issuer to the Guarantor pursuant to the
Declaration.
“Corporate
Trust Office”
means
the office of the Guarantee Trustee at which the corporate trust business of
the
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Guarantee is located at ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust Administration.
“Covered
Person”
means
any Holder of Capital Securities.
“Debentures”
means
the debt securities of the Guarantor designated the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2037 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
“Declaration
Event of Default”
means
an “Event of Default” as defined in the Declaration.
“Event
of Default”
has
the
meaning set forth in Section 2.4(a).
“Guarantee
Payments”
means
the following payments or distributions, without duplication, with respect
to
the Capital Securities, to the extent not paid or made by the Issuer:
(i) any accrued and unpaid Distributions (as defined in the
Declaration) which are required to be paid on such Capital Securities to
the extent the Issuer shall have funds available therefor, (ii) the
Redemption Price to the extent the Issuer has funds available therefor, with
respect to any Capital Securities called for redemption by the Issuer,
(iii) the Special Redemption Price to the extent the Issuer has funds
available therefor, with respect to Capital Securities redeemed upon the
occurrence of a Special Event, and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than
in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser
of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the “Liquidation
Distribution”).
“Guarantee
Trustee”
means
Wilmington Trust Company, until a Successor Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.
“Guarantor”
means
▇▇▇▇▇▇▇▇ Financial, Inc. and each of its successors and
assigns.
“Holder”
means
any holder, as registered on the books and records of the Issuer, of any Capital
Securities; provided,
however,
that,
in determining whether the Holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, “Holder”
shall not include the Guarantor or any Affiliate of the Guarantor.
“Indemnified
Person”
means
the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
“Indenture”
means
the Indenture dated as of the date hereof between the Guarantor and Wilmington
Trust Company, not in its individual capacity but solely as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the institutional trustee of the Issuer.
“Issuer”
has
the
meaning set forth in the opening paragraph to this Guarantee.
“Liquidation
Distribution”
has
the
meaning set forth in the definition of “Guarantee Payments” herein.
“Majority
in liquidation amount of the Capital Securities”
means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (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) of all Capital
Securities then outstanding.
“Obligations”
means
any costs, expenses or liabilities (but not including liabilities related to
taxes) of the Issuer other than obligations of the Issuer to pay to holders
of
any Trust Securities the amounts due such holders pursuant to the terms of
the
Trust Securities.
“Officer’s
Certificate”
means,
with respect to any Person, a certificate signed by one Authorized Officer
of
such Person. Any Officer’s Certificate delivered with respect to compliance with
a condition or covenant provided for in this Guarantee shall
include:
(a) a
statement that the officer signing the Officer’s Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a
brief
statement of the nature and scope of the examination or investigation undertaken
by the officer in rendering the Officer’s Certificate;
(c) a
statement that the 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 the officer, such condition or
covenant has been complied with.
“Person”
means
a
legal person, including any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
“Redemption
Price”
has
the
meaning set forth in the Indenture.
“Responsible
Officer”
means,
with respect to the Guarantee Trustee, any officer within the Corporate Trust
Office of the Guarantee Trustee including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any
of
the above designated officers and also, 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.
“Special
Event”
has
the
meaning set forth in the Indenture.
“Special
Redemption Price”
has
the
meaning set forth in the Indenture.
“Successor
Guarantee Trustee”
means
a
successor Guarantee Trustee possessing the qualifications to act as Guarantee
Trustee under Section 3.1.
“Trust
Securities”
means
the Common Securities and the Capital Securities.
ARTICLE
II
POWERS,
DUTIES AND RIGHTS OF
GUARANTEE
TRUSTEE
Section
2.1. Powers
and Duties of the Guarantee Trustee.
(a) This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his
or
her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If
an
Event of Default actually known to a Responsible Officer of the Guarantee
Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
this
Guarantee for the benefit of the Holders of the Capital Securities.
(c) The
Guarantee Trustee, before the occurrence of any Event of Default and after
curing all Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Guarantee, and no implied
covenants shall be read into this Guarantee against the Guarantee Trustee.
In
case an Event of Default has occurred (that has not been waived pursuant to
Section 2.4) and is actually known to a Responsible Officer of the
Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights
and
powers vested in it by this 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 Guarantee shall be construed to relieve the Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct or bad faith, except that:
(i) prior
to
the occurrence of any Event of Default and after the curing or waiving of all
such Events of Default that may have occurred:
(A) the
duties and obligations of the Guarantee Trustee shall be determined solely
by
the express provisions of this Guarantee, and the Guarantee Trustee shall not
be
liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee, and no implied covenants or
obligations shall be read into this Guarantee against the Guarantee Trustee;
and
(B) in
the
absence of willful misconduct or bad faith on the part of the Guarantee Trustee
or any Responsible Officer, the Guarantee Trustee may conclusively rely, as
to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee Trustee
and conforming to the requirements of this Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they conform
to
the requirements of this Guarantee;
(ii) the
Guarantee Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
proved that such Responsible Officer of the Guarantee Trustee or the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the
Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of the Holders of not less than a Majority in liquidation amount of the Capital
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or relating to the exercise
of any trust or power conferred upon the Guarantee Trustee under this Guarantee;
and
(iv) no
provision of this Guarantee shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably assured to it under the
terms
of this Guarantee or security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not reasonably assured
to
it.
Section
2.2. Certain
Rights of Guarantee Trustee.
(a) Subject
to the provisions of Section 2.1:
(i) The
Guarantee Trustee may conclusively rely, and shall be fully protected in acting
or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the
proper party or parties.
(ii) Any
direction or act of the Guarantor contemplated by this Guarantee shall be
sufficiently evidenced by an Officer’s Certificate.
(iii) Whenever,
in the administration of this Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless other evidence
is
herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officer’s Certificate of the Guarantor
which, upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The
Guarantee Trustee shall have no duty to see to any recording, filing or
registration of any instrument (or any re-recording, refiling or re-registration
thereof).
(v) The
Guarantee Trustee may consult with counsel of its selection, and the advice
or
opinion of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall have the right at
any
time to seek instructions concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi) The
Guarantee Trustee shall be under no obligation to exercise any of the rights
or
powers vested in it by this Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses and the expenses of the
Guarantee Trustee’s agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided,
however,
that
nothing contained in this Section 2.2(a)(vi) shall relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee.
(vii) The
Guarantee Trustee shall not be bound to make any investigation into the facts
or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other
evidence of indebtedness or other paper or document, but the Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(viii) The
Guarantee Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not be responsible
for
any misconduct or negligence on the part of any agent or attorney appointed
with
due care by it hereunder.
(ix) Any
action taken by the Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the Guarantee Trustee
or
its agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the Guarantee
Trustee to so act or as to its compliance with any of the terms and provisions
of this Guarantee, both of which shall be conclusively evidenced by the
Guarantee Trustee’s or its agent’s taking such action.
(x) Whenever
in the administration of this Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(xi) The
Guarantee Trustee shall not be liable for any action taken, suffered, or omitted
to be taken by it in good faith, without negligence, and reasonably believed
by
it to be authorized or within the discretion or rights or powers conferred
upon
it by this Guarantee.
(b) No
provision of this Guarantee shall be deemed to impose any duty or obligation
on
the Guarantee Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which
it
shall be illegal or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law to perform any such act or acts
or
to exercise any such right, power, duty or obligation. No permissive power
or
authority available to the Guarantee Trustee shall be construed to be a
duty.
Section
2.3. Not
Responsible for Recitals or Issuance of Guarantee.
The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee.
Section
2.4. Events
of Default; Waiver.
(a) An
Event
of Default under this Guarantee will occur upon the failure of the Guarantor
to
perform any of its payment or other obligations hereunder.
(b) The
Holders of a Majority in liquidation amount of the Capital Securities may,
voting or consenting as a class, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and shall be deemed
to
have been cured, for every purpose of this Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
Section
2.5. Events
of Default; Notice.
(a) The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities and the Guarantor, notices of all Events of Default actually
known to any Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided,
however,
that
the Guarantee Trustee shall be protected in withholding such notice if and
so
long as a Responsible Officer of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Capital Securities.
(b) The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice from the
Guarantor or a Holder of the Capital Securities (except in the case of a payment
default), or any Responsible Officer of the Guarantee Trustee charged with
the
administration of this Guarantee shall have obtained actual knowledge
thereof.
ARTICLE
III
GUARANTEE
TRUSTEE
Section
3.1. Guarantee
Trustee; Eligibility.
(a) There
shall at all times be a Guarantee Trustee which shall:
(i) not
be an
Affiliate of the Guarantor, and
(ii) be
a
corporation organized and doing business under the laws of the United States
of
America or any State or Territory thereof or of the District of Columbia, or
Person 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 3.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If
at any
time the Guarantee Trustee shall cease to be eligible to so act under
Section 3.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 3.2(c).
(c) If
the
Guarantee Trustee has or shall acquire any “conflicting interest” within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
shall either eliminate such interest or resign to the extent and in the manner
provided by, and subject to this Guarantee.
Section
3.2. Appointment,
Removal and Resignation of Guarantee Trustee.
(a) Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default.
(b) The
Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until
a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The
Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until its removal or resignation.
The Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take effect
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment by an instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If
no
Successor Guarantee Trustee shall have been appointed and accepted appointment
as provided in this Section 3.2 within 60 days after delivery of an
instrument of removal or resignation, the Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of
a
Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.
(e) No
Guarantee Trustee shall be liable for the acts or omissions to act of any
Successor Guarantee Trustee.
(f) Upon
termination of this Guarantee or removal or resignation of the Guarantee Trustee
pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee
all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3
accrued to the date of such termination, removal or resignation.
ARTICLE
IV
GUARANTEE
Section
4.1. Guarantee.
(a) The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by
the
Issuer), as and when due, regardless of any defense (except the defense of
payment by the Issuer), right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor’s obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the
Holders.
(b) The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer
and
in the event any such Obligation is not so assumed, subject to the terms and
conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and
all
Obligations to such Beneficiaries. This Guarantee is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section
4.2. Waiver
of Notice and Demand.
The
Guarantor hereby waives notice of acceptance of this 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
4.3. Obligations
Not Affected.
The
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term
or
condition relating to the Capital Securities to be performed or observed by
the
Issuer;
(b) the
extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Special Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of or in connection with, the Capital Securities (other than an
extension of time for payment of Distributions, Redemption Price, Special
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred
on
the Holders pursuant to the terms of the Capital Securities, or any action
on
the part of the Issuer granting indulgence or extension of any
kind;
(d) the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any
invalidity of, or defect or deficiency in, the Capital Securities;
(f) the
settlement or compromise of any obligation guaranteed hereby or hereby incurred;
or
(g) any
other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this
Section 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There
shall be no obligation of the Holders to give notice to, or obtain consent
of,
the Guarantor with respect to the happening of any of the
foregoing.
Section
4.4. Rights
of Holders.
(a) The
Holders of a Majority in liquidation amount of the Capital Securities have
the
right to direct the time, method and place of conducting any proceeding for
any
remedy available to the Guarantee Trustee in respect of this Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee; provided,
however,
that
(subject to Section 2.1) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised
by
counsel determines that the action or proceeding so directed may not lawfully
be
taken or if the Guarantee Trustee in good faith by its board of directors or
trustees, executive committees or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings
so
directed would involve the Guarantee Trustee in personal liability.
(b) Any
Holder of Capital Securities may institute a legal proceeding directly against
the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person. The Guarantor waives any right or remedy to require
that any such action be brought first against the Issuer, the Guarantee Trustee
or any other Person before so proceeding directly against the
Guarantor.
Section
4.5. Guarantee
of Payment.
This
Guarantee creates a guarantee of payment and not of collection.
Section
4.6. Subrogation.
The
Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
Securities against the Issuer in respect of any amounts paid to such Holders
by
the Guarantor under this 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 Guarantee, if, after giving effect to any
such
payment, any amounts are due and unpaid under this 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
4.7. Independent
Obligations.
The
Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Capital Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
4.3 hereof.
Section
4.8. Enforcement
by a Beneficiary.
A
Beneficiary may enforce the obligations of the Guarantor contained in Section
4.1(b) directly against the Guarantor and the Guarantor waives any right or
remedy to require that any action be brought against the Issuer or any other
person or entity before proceeding against the Guarantor. The Guarantor shall
be
subrogated to all rights (if any) of any Beneficiary against the Issuer in
respect of any amounts paid to the Beneficiaries by the Guarantor under this
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 rights 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 Guarantee, if at the time of any such payment,
and after giving effect to such payment, any amounts are due and unpaid under
this Guarantee.
ARTICLE
V
LIMITATION
OF TRANSACTIONS; SUBORDINATION
Section
5.1. Limitation
of Transactions.
So
long
as any Capital Securities remain outstanding, if (a) there shall have
occurred and be continuing an Event of Default or a Declaration Event of Default
or (b) the Guarantor shall have selected an Extension Period as provided in
the Declaration and such period, or any extension thereof, shall have commenced
and be continuing, then the Guarantor shall not and shall not permit any
Affiliate to (x) 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 or such Affiliate’s capital stock (other than payments of
dividends or distributions to the Guarantor or any direct or indirect subsidiary
of the Guarantor) or make any guarantee payments with respect to the foregoing
or (y) make any payment of principal of or interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Guarantor that rank
pari
passu in
all
respects with or junior in interest to the Debentures (other than, with respect
to clauses (x) and (y) above, (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with
any
employment contract, benefit plan or other similar arrangement with or for
the
benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan
or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in
an
acquisition transaction entered into prior to the occurrence of the Event of
Default, Declaration Event of Default or Extension Period, as applicable,
(ii) as a result of any exchange or conversion of any class or series of
the Guarantor’s capital stock (or any capital stock of a subsidiary of the
Guarantor) for any class or series of the Guarantor’s capital stock or of any
class or series of the Guarantor’s indebtedness for any class or series of the
Guarantor’s capital stock, (iii) the purchase of fractional interests in
shares of the Guarantor’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) any declaration of a dividend in connection with any stockholders’
rights plan, or the issuance of rights, stock or other property under any
stockholders’ rights plan, or the redemption or repurchase of rights pursuant
thereto, (v) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari
passu
with or
junior to such stock and any cash payments in lieu of fractional shares issued
in connection therewith, or (vi) payments under this
Guarantee).
Section
5.2. Ranking.
This
Guarantee will constitute an unsecured obligation of the Guarantor and will
rank
subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor. By their acceptance
thereof, each Holder of Capital Securities agrees to the foregoing provisions
of
this Guarantee and the other terms set forth herein.
The
right
of the Guarantor to participate in any distribution of assets of any of its
subsidiaries upon any such subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary, except
to the extent the Guarantor may itself be recognized as a creditor of that
subsidiary. Accordingly, the Guarantor’s obligations under this Guarantee will
be effectively subordinated to all existing and future liabilities of the
Guarantor’s subsidiaries, and claimants should look only to the assets of the
Guarantor for payments hereunder. This Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Guarantor, including
Senior Indebtedness of the Guarantor, under any indenture that the Guarantor
may
enter into in the future or otherwise.
ARTICLE
VI
TERMINATION
Section
6.1. Termination.
This
Guarantee shall terminate as to the Capital Securities (i) upon full
payment of the Redemption Price or Special Redemption Price of all Capital
Securities then outstanding, (ii) upon the distribution of all of the
Debentures to the Holders of all of the Capital Securities or (iii) upon
full payment of the amounts payable in accordance with the Declaration upon
dissolution of the Issuer. This Guarantee will continue to be effective or
will
be reinstated, as the case may be, if at any time any Holder of Capital
Securities must restore payment of any sums paid under the Capital Securities
or
under this Guarantee.
ARTICLE
VII
INDEMNIFICATION
Section
7.1. 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 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 Guarantee or
by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person’s negligence or willful
misconduct with respect to such acts or omissions.
(b) An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Issuer or the Guarantor and upon such information, opinions,
reports or statements presented to the Issuer or the Guarantor by any Person
as
to matters the Indemnified Person reasonably believes are within such other
Person’s professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.
Section
7.2. Indemnification.
(a) 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 willful misconduct on the part of
the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including, but not limited
to,
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person’s powers or duties hereunder. The obligation to indemnify as
set forth in this Section 7.2 shall survive the resignation or removal of
the Guarantee Trustee and the termination of this Guarantee.
(b) Promptly
after receipt by an Indemnified Person under this Section 7.2 of notice of
the commencement of any action, such Indemnified Person will, if a claim in
respect thereof is to be made against the Guarantor under this Section 7.2,
notify the Guarantor in writing of the commencement thereof; but the failure
so
to notify the Guarantor (i) will not relieve the Guarantor from liability
under paragraph (a) above unless and to the extent that the Guarantor did
not otherwise learn of such action and such failure results in the forfeiture
by
the Guarantor of substantial rights and defenses or results in the Guarantor
being materially prejudiced with respect to any material right or defense and
(ii) will not, in any event, relieve the Guarantor from any obligations to
any Indemnified Person other than the indemnification obligation provided in
paragraph (a) above. The Guarantor shall be entitled to appoint counsel of
the Guarantor’s choice at the Guarantor’s expense to represent the Indemnified
Person in any action for which indemnification is sought (in which case the
Guarantor shall not thereafter be responsible for the fees and expenses of
any
separate counsel retained by the Indemnified Person or Persons except as set
forth below); provided,
however,
that
such counsel shall be reasonably satisfactory to the Indemnified Person. The
Guarantor may participate at its own expense in the defense of any such action.
Notwithstanding the Guarantor’s election to appoint counsel to represent the
Guarantor in an action, the Indemnified Person shall have the right to employ
separate counsel (including local counsel), and the Guarantor shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Person and the Guarantor and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it and/or
other Indemnified Person(s) which are different from or additional to those
available to the Guarantor, (iii) the Guarantor shall not have employed
counsel satisfactory to the Indemnified Person to represent the Indemnified
Person within a reasonable time after notice of the institution of such action
or (iv) the Guarantor shall authorize the Indemnified Person to employ
separate counsel at the expense of the Guarantor. Neither the Guarantor nor
an
Indemnified Person will, without the prior written consent of the other
Indemnified Persons, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Guarantor or any Indemnified Person is an actual
or potential party to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of the Guarantor and Indemnified
Person from all liability arising out of such claim, action, suit or proceeding,
which consent shall not be unreasonably withheld or delayed.
Section
7.3. Compensation;
Reimbursement of Expenses.
The
Guarantor agrees:
(a) to
pay to
the Guarantee Trustee from time to time such compensation for all services
rendered by it hereunder as the parties shall agree to from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(b) except
as
otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable expenses, disbursements and advances incurred or
made
by it in accordance with any provision of this 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 of the Guarantee
Trustee.
For
purposes of clarification, this Section 7.3 does not contemplate the
payment by the Guarantor of acceptance or annual administration fees owing
to
the Guarantee Trustee for services to be provided by the Guarantee Trustee
under
this Guarantee or the fees and expenses of the Guarantee Trustee’s counsel in
connection with the closing of the transactions contemplated by this Guarantee.
The provisions of this Section 7.3 shall survive the resignation or removal
of the Guarantee Trustee and the termination of this Guarantee.
ARTICLE
VIII
MISCELLANEOUS
Section
8.1. Successors
and Assigns.
All
guarantees and agreements contained in this Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Capital Securities then outstanding.
Except in connection with any merger, consolidation, reorganization, acquisition
or transfer of the Guarantor into another entity or any sale, transfer or lease
of the Guarantor’s assets to another entity, in each case, to the extent
permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of
the
Holders of at least a Majority in liquidation amount of the Capital
Securities.
Section
8.2. Amendments.
Except
with respect to any changes that do not adversely affect the powers,
preferences, rights or interests of Holders of the Capital Securities in any
material respect (in which case no consent or approval of Holders will be
required), this Guarantee may be amended only with the prior approval of the
Holders of not less than a Majority in liquidation amount of the Capital
Securities. The provisions of the Declaration with respect to amendments thereof
apply to the giving of such approval.
Section
8.3. Notices.
All
notices provided for in this Guarantee shall be in writing, duly signed by
the
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:
(a) If
given
to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set forth
below (or such other address as the Guarantee Trustee may give notice of to
the
Holders of the Capital Securities and the Guarantor):
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Corporate Trust Administration
Telecopy:
▇▇▇-▇▇▇-▇▇▇▇
(b) If
given
to the Guarantor, at the Guarantor’s mailing address set forth below (or such
other address as the Guarantor may give notice of to the Holders of the Capital
Securities and to the Guarantee Trustee):
▇▇▇▇▇▇▇▇
Financial, Inc.
▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy:
▇▇▇-▇▇▇-▇▇▇▇
(c) If
given
to any Holder of the Capital Securities, at the address set forth on the books
and records of the Issuer.
All
such
notices shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except
that if a notice or other document is refused delivery or cannot be delivered
because of a changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such refusal
or
inability to deliver.
Section
8.4. Benefit.
This
Guarantee is solely for the benefit of the Beneficiaries and, subject to Section
2.1(a), is not separately transferable from the Capital Securities.
Section
8.5. Governing
Law.
THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
Section
8.6. Counterparts.
This
Guarantee may be executed in one or more counterparts, each of which shall
be an
original, but all of which taken together shall constitute one and the same
instrument.
Section
8.7 Separability.
In
case
one or more of the provisions contained in this Guarantee shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Guarantee, but this Guarantee shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.
Signatures
appear on the following page
THIS
GUARANTEE is executed as of the day and year first above written.
▇▇▇▇▇▇▇▇
FINANCIAL, INC.,
as
Guarantor
By:
Name:
Title:
WILMINGTON
TRUST COMPANY, as Guarantee Trustee
By:
Name:
Title: