EXCHANGE GUARANTEE AGREEMENT
Between
U.S.B. HOLDING CO., INC.
(as Guarantor)
and
THE CHASE MANHATTAN BANK
(as Trustee)
Dated as of ____________ ___, 1997
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.1. Definitions...................................................................................1
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application..............................................................4
SECTION 2.2. List of Holders...............................................................................4
SECTION 2.3. Reports by the Guarantee Trustee..............................................................4
SECTION 2.4. Periodic Reports to the Guarantee Trustee.....................................................5
SECTION 2.5. Evidence of Compliance with Conditions Precedent..............................................5
SECTION 2.6. Events of Default; Waiver....................................................................5
SECTION 2.7. Event of Default; Notice......................................................................5
SECTION 2.8. Conflicting Interests.........................................................................5
ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee
SECTION 3.1. Powers and Duties of the Guarantee Trustee....................................................6
SECTION 3.2. Certain Rights of Guarantee Trustee...........................................................7
SECTION 3.3. Indemnity.....................................................................................9
SECTION 3.4. Expenses......................................................................................9
ARTICLE IV
Guarantee Trustee
SECTION 4.1. Guarantee Trustee; Eligibility................................................................9
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee................................10
ARTICLE V
Guarantee
SECTION 5.1. Guarantee....................................................................................11
SECTION 5.2. Waiver of Notice and Demand..................................................................11
SECTION 5.3. Obligations Not Affected.....................................................................11
SECTION 5.4. Rights of Holders............................................................................12
SECTION 5.5. Guarantee of Payment.........................................................................12
SECTION 5.6. Subrogation..................................................................................12
SECTION 5.7. Independent Obligations......................................................................13
ARTICLE VI
Covenants and Subordination
SECTION 6.1. Subordination................................................................................13
SECTION 6.2. Pari Passu Guarantees........................................................................13
SECTION 6.3 Limitation on Transactions....................................................................13
ARTICLE VII
Termination
SECTION 7.1. Termination..................................................................................14
ARTICLE VIII
Miscellaneous
SECTION 8.1. Successors and Assigns.......................................................................14
SECTION 8.2. Amendments...................................................................................14
SECTION 8.3. Notices......................................................................................15
SECTION 8.4. Benefit......................................................................................16
SECTION 8.5. Interpretation...............................................................................16
SECTION 8.6. Governing Law................................................................................17
CROSS-REFERENCE TABLE*-/
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a) .............................................. 4.1(a)
310(b) .............................................. 4.1(c), 2.8
310(c) .............................................. Inapplicable
311(a) .............................................. 2.2(b)
311(b) .............................................. 2.2(b)
311(c) .............................................. Inapplicable
312(a) .............................................. 2.2(a)
312(b) .............................................. 2.2(b)
313. .............................................. 2.3
314(a) .............................................. 2.4
314(b) .............................................. Inapplicable
314(c) .............................................. 2.5
314(d) .............................................. Inapplicable
314(e) .............................................. 1.1, 2.5,
3.2
314(f) .............................................. 2.1, 3.2
315(a) .............................................. 3.1(d)
315(b) .............................................. 2.7
315(c) .............................................. 3.1
315(d) .............................................. 3.1(d)
316(a) .............................................. 1.1, 2.6,
5.4
316(b) .............................................. 5.3
316(c) .............................................. Inapplicable
317(a) .............................................. Inapplicable
317(b) .............................................. Inapplicable
318(a) .............................................. 2.1(b)
--------
*-/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms of
provisions.
EXCHANGE GUARANTEE AGREEMENT, dated as of ______ 1997 (the "Exchange
Guarantee"), executed and delivered by U.S.B. HOLDING CO., INC., a Delaware
corporation (the "Guarantor") having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and THE CHASE MANHATTAN BANK, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Trust Securities (as
defined herein) of UNION STATE CAPITAL TRUST I, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of February 5, 1997, among the trustees of the
Issuer, the Guarantor, as sponsor, Chase Manhattan Bank Delaware, as Delaware
trustee, 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 capital
securities, having an aggregate liquidation amount of $20,000,000, such capital
securities being designated the 9.58% Series B Capital Securities (the "Exchange
Capital Securities") in connection with the consummation of the Exchange Offer
(as defined in the Registration Agreement dated as of February 5, 1997 by and
among the Guarantor, the Issuer and the initial purchaser named therein).
WHEREAS, as incentive for the Holders to exchange the Initial Capital
Securities (as defined in the Declaration of Trust) issued on the date of the
Declaration of Trust for the Exchange Capital Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Exchange Guarantee, to pay to the Holders of the Exchange Capital Securities and
the Common Securities (as defined in the Declaration of Trust) the Guarantee
Payments (as defined herein). The Guarantor agrees to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Exchange Guarantee for the benefit of the Holders
from time to time of the Trust Securities.
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this Exchange Guarantee, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Declaration of
Trust as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Capital Securities" shall have the meaning specified in the first recital
of this Exchange Guarantee.
"Debt" shall have the meaning specified in the Indenture.
"Declaration of Trust" shall have the meaning specified in the first
recital of this Exchange Guarantee.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Exchange Guarantee; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice; provided, further, that no
Event of Default shall occur unless an Event of Default (as defined in the
Indenture or the Declaration) shall have occurred and be continuing.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Trust Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accrued and unpaid Distributions
required to be paid on the Trust Securities, to the extent the Issuer shall have
funds on hand available therefor at such time, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to the Trust Securities called for redemption
by the Issuer to the extent the Issuer shall have funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Junior Subordinated Debt
Securities are distributed to the Holders, the lesser of (a) the aggregate of
the liquidation amount of $1,000 per Trust Security plus accrued and unpaid
Distributions to the date of payment to the extent the Issuer shall have funds
on hand available to make such payment at such time 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"). If an Event of
Default under the Declaration has occurred and is continuing, no Guarantee
Payments with respect to the Common Securities or any guarantee payment under
any Other Guarantees (as defined in the Indenture) with respect to Common
Securities of any other U.S.B.H. Capital Trust (as defined in the Indenture), if
any, shall be made until the Holders of Capital Securities shall be paid in full
the Guarantee Payments to which they are entitled under this Exchange Guarantee.
Subordination of Guarantee Payments on the Common Securities following such an
Event of Default under the Declaration shall be analogous to the subordination
of the Common Securities provided for in Section 4.03 of the Declaration.
"Guarantee Trustee" means The Chase Manhattan Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Exchange Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Guarantor" shall have the meaning specified in the preamble of this
Exchange Guarantee.
"Holder" means 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, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of February
5, 1997, as supplemented and amended between the Guarantor and The Chase
Manhattan Bank, as trustee, relating to the issuance of the Junior Subordinated
Debt Securities.
"Issuer" shall have the meaning specified in the first recital of this
Exchange Guarantee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means a vote by the
Holder(s), voting separately as a class, of more than 50% of the aggregate
Liquidation Amount of all then Outstanding Trust Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, the Chief Executive Officer, the President or a Vice
President, and by the Chief Financial Officer, the Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Exchange Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Other Debentures" shall have the meaning specified in the Indenture.
"Other Guarantees" shall have the meaning specified in the Indenture.
"Responsible Officer" when used with respect to the Guarantee Trustee means
any officer of the the Trustee with direct responsibility for the administration
of this Exchange Guarantee, and also means, with respect to a particular matter,
any other officer of the Trustee to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Senior Debt" shall have the meaning specified in the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Securities" shall have the meaning specified in the Declaration of
Trust.
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application. (a) This Exchange Guarantee
will not be qualified under the Trust Indenture Act except upon the
effectiveness of a registration statement with respect to this Exchange
Guarantee.
(b) Upon qualification under the Trust Indenture Act as contemplated in
clause (a) above, if and to the extent that any provision of this Exchange
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or cause to
be furnished to the Guarantee Trustee (i) semiannually, not more than 15 days
after May 15 and November 15 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders ("List
of Holders") as of a date not more than 15 days prior to the delivery thereof,
and (ii) at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished, in each case to the extent such information is in the possession or
control of the Guarantor and is not identical to a previously supplied list of
Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee. Within 60 days of May of
each calendar year, commencing with May 15, 1997, the Guarantee Trustee shall
provide to the Holders such reports, if any, as are required by Section 313 of
the Trust Indenture Act in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions PrecedentMERGEFORMAT.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Exchange 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 any officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any such Event of Default shall be
deemed to have been cured, for every purpose of this Exchange Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice. (a) The Guarantee Trustee shall,
within 90 days after the occurrence of an Event of Default known to a
Responsible Officer of the Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of such
notice; provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
the Declaration of Trust shall have received written notice of such Event of
Default.
SECTION 2.8. Conflicting Interests. The Declaration of Trust shall be
deemed to be specifically described in this Exchange 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 the Guarantee Trustee
SECTION 3.1. Powers and Duties of the Guarantee Trustee67. (a) This
Exchange Guarantee shall be held by the Guarantee Trustee for the benefit of the
Holders, and the Guarantee Trustee shall not transfer this Exchange Guarantee to
any Person except a Holder exercising his or her rights pursuant to Section
5.4(iv) 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, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Exchange Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Exchange Guarantee, and no implied covenants shall be read into this Exchange
Guarantee against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Exchange 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 Exchange 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, 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 Exchange
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 Exchange Guarantee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Exchange Guarantee; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Exchange 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 the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii)the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this
Exchange Guarantee; and
(iv) no provision of this Exchange 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 or liability is not assured to
it under the terms of this Exchange Guarantee or indemnity
satisfactory to it against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee TrusteeMERGEFORMAT. (a) Subject to
the provisions of Section 3.1:
(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
reasonably 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
Exchange Guarantee shall be sufficiently evidenced by all
Officers' Certificate unless otherwise prescribed herein.
(iii)Whenever, in the administration of this Exchange Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or written opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Exchange Guarantee from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Exchange
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 it, against the costs,
expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Exchange Guarantee.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit.
(vii)The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Exchange 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 (A) may request
instructions from the Holders, (B) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received and (C) shall be fully protected in
acting in accordance with such instructions.
(b) No provision of this Exchange 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 to act in accordance with such power and
authority.
SECTION 3.3. Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee and its directors, officers, agents and employees for, and to hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Exchange Guarantee, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Exchange
Guarantee. This indemnity shall survive the termination of this Exchange
Guarantee or the resignation or removal of the Guarantee Trustee.
SECTION 3.4. Expenses. The Guarantor, as obligor on the Junior Subordinated
Debt Securities, shall from time to time reimburse the Guarantee Trustee for its
reasonable expenses and costs incurred in connection with the performance of its
duties hereunder. The provisions of this Section 3.4 shall survive the
termination of this Exchange Guarantee or the removal of the Guarantee Trustee.
ARTICLE IV
Guarantee Trustee
SECTION 4.1. 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 Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
of Section 310(c) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(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 and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.02(b), in the absence of the existence of an Event of
Default, the Guarantee Trustee may be appointed or removed without cause at any
time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
Guarantee
SECTION 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 or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders. The
Guarantor shall give prompt written notice to the Guarantee Trustee in the event
it makes any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Exchange 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 Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Exchange 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 (other than any extension of time
for payment of Distributions that results from the extension of
any interest payment period on the Junior Subordinated Debt
Securities as so provided in the Indenture), Redemption Price,
Liquidation Distribution 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;
(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) the consummation of the Exchange Offer; or
(h) 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 hereunder shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that:
(i) this Exchange Guarantee will be deposited with the Guarantee Trustee to be
held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to
enforce this Exchange Guarantee on behalf of the Holders; (iii) subject to
Section 3.2(v), the Holders of a Majority in Liquidation Amount of the
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
Exchange Guarantee or exercising any trust or power conferred upon the Guarantee
Trustee under this Exchange Guarantee; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Exchange Guarantee, without first instituting a legal proceeding against the
Issuer or any other Person.
SECTION 5.5. Guarantee of Payment. This Exchange Guarantee creates a
guarantee of payment and not of collection. This Exchange Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Junior Subordinated Debt Securities to Holders as provided in the Declaration of
Trust.
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 the
Holders by the Guarantor under this Exchange Guarantee and shall have the right
to waive payment by the Issuer pursuant to Section 5.1; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Exchange Guarantee, if at the time of
any such payment, any amounts are due and unpaid under this Exchange 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 Exchange Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
Covenants and Subordination
SECTION 6.1. Subordination. This Exchange Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt of the Guarantor, to the same extent and in
the same manner that the Junior Subordinated Debt Securities are subordinated to
Senior Debt pursuant to the Indenture, and (b) senior to all capital stock of
the Guarantor.
SECTION 6.2. Pari Passu Guarantees. This Exchange Guarantee shall rank pari
passu with any similar guarantee agreements issued by the Guarantor on behalf of
the holders of trust securities issued by a trust created by the Guarantor
similar to the Issuer.
SECTION 6.3. Limitation on Transactions. The Guarantor covenants and agrees
with each Holder that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the Guarantor's capital stock (which includes
common and preferred stock), or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor (including Other Debentures) that rank pari passu with or junior in
interest to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Guarantor of debt securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari passu with
or junior in interest to the Securities (other than (a) dividends or
distributions in common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under this Exchange
Guarantee, (d) purchases or acquisitions of shares of the Guarantor's common
stock in connection with the satisfaction by the Guarantor of its obligations
under any employee benefit plan or other contractual obligation of the Guarantor
(other than a contractual obligation ranking pari passu with or junior in
interest to the Securities), (e) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock, or (f) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged), if at such
time (i) there shall have occurred an Event of Default (as defined in the
Indenture), (ii) the Guarantor shall be in default with respect to its payment
of any obligations under this Guarantee or (iii) the Guarantor shall have given
notice of its election to begin an Extension Period (as defined in the
Indenture) and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
The Guarantor also covenants with each Holder for so long as the Securities
remain outstanding (i) to maintain 100% direct or indirect ownership of the
Common Securities; provided, however, that any permitted successor of the
Guarantor under the Indenture may succeed to the Guarantor's ownership of such
Common Securities, (ii) not to cause or permit the dissolution, winding-up or
termination of the Issuer, except (a) in connection with a distribution of the
Junior Subordinated Debt Securities to the holders of Capital Securities or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the Declaration of Trust and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Declaration of Trust, to cause the Trust
to remain classified as a grantor trust and not an association taxable as a
corporation for United States Federal income tax purposes.
ARTICLE VII
SECTION 7.1. Termination. This Exchange Guarantee shall terminate and be of
no further force and effect upon (i) full payment of the Redemption Price of all
Trust Securities, (ii) the distribution of Junior Subordinated Debt Securities
to the Holders in exchange for all of the Trust Securities or (iii) full payment
of the amounts payable in accordance with the Declaration of Trust upon
liquidation of the Issuer. Notwithstanding the foregoing, this Exchange
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must repay any sums paid with respect to Trust
Securities or this Exchange Guarantee. The provisions of Sections 3.3 and 3.4
shall survive termination of this Exchange Guarantee as provided therein.
ARTICLE VIII
Miscellaneous
SECTION 8.1. Successors and Assigns. All guarantees and agreements
contained in this Exchange Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 8.2. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Exchange Guarantee may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Amount of the Securities. The provisions of Article VI
of the Declaration of Trust concerning meetings of the Holders shall apply to
the giving of such approval.
SECTION 8.3. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied (confirmed by delivery of the
original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other
Person as the Guarantor may give notice to the Holders:
U.S.B. HOLDING CO., INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Assistant Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or
such other address as the Guarantee Trustee on behalf of the
Issuer may give notice to the Holders:
U.S.B. CAPITAL TRUST I
c/o U.S.B. HOLDING CO., INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President,
Chief Financial Officer and Assistant Secretary
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trustee Administration Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if given to the Guarantee Trustee:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trustee Administration Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Exchange Guarantee is solely for the benefit of
the Holders and is not separately transferable from the Trust Securities.
SECTION 8.5. Interpretation. In this Exchange Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Exchange Guarantee but not defined
in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Exchange Guarantee has the same
meaning throughout;
(c) all references to "the Exchange Guarantee" or "this Exchange
Guarantee" are to this Exchange Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Exchange Guarantee to Articles and
Sections are to Articles and Sections of this Exchange Guarantee
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Exchange Guarantee unless otherwise defined in
this Exchange Guarantee or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law. THIS EXCHANGE GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS EXCHANGE GUARANTEE is executed as of the day and year first above
written.
U.S.B. HOLDING CO., INC.
By_____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Guarantee Trustee,
By______________________________________
Name:
Title: