PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
SECOND BANCORP INCORPORATED
AND
WILMINGTON TRUST COMPANY
DATED AS OF SEPTEMBER 28, 2001
TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS AND INTERPRETATION..........................................................................1
Section 1.1 Definitions and Interpretation........................................................1
ARTICLE II
TRUST INDENTURE ACT.....................................................................................5
Section 2.1 Trust Indenture Act; Application......................................................5
Section 2.2 Lists of Holders of Securities........................................................5
Section 2.3 Reports by the Guarantee Trustee......................................................5
Section 2.4 Periodic Reports to Guarantee Trustee.................................................5
Section 2.5 Evidence of Compliance with Conditions Precedent......................................6
Section 2.6 Events of Default; Waiver.............................................................6
Section 2.7 Event of Default; Notice..............................................................6
Section 2.8 Conflicting Interests.................................................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE..........................................................7
Section 3.1 Powers and Duties of the Guarantee Trustee............................................7
Section 3.2 Certain Rights of Guarantee Trustee...................................................9
Section 3.3 Not Responsible for Recitals or Issuance of Guarantee................................11
ARTICLE IV
GUARANTEE TRUSTEE......................................................................................11
Section 4.1 Guarantee Trustee; Eligibility.......................................................11
Section 4.2 Appointment, Removal and Resignation of Guarantee Trustee............................12
ARTICLE V
GUARANTEE..............................................................................................12
Section 5.1 Guarantee............................................................................12
Section 5.2 Waiver of Notice and Demand..........................................................13
Section 5.3 Obligations Not Affected.............................................................13
Section 5.4 Rights of Holders....................................................................14
Section 5.5 Guarantee of Payment.................................................................14
Section 5.6 Subrogation..........................................................................14
Section 5.7 Independent Obligations..............................................................15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION..............................................................15
Section 6.1 Limitation of Transactions...........................................................15
Section 6.2 Ranking..............................................................................15
ARTICLE VII
TERMINATION............................................................................................15
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Section 7.1 Termination..........................................................................15
ARTICLE VIII
INDEMNIFICATION........................................................................................16
Section 8.1 Exculpation..........................................................................16
Section 8.2 Indemnification......................................................................16
ARTICLE IX
MISCELLANEOUS..........................................................................................16
Section 9.1 Successors and Assigns...............................................................16
Section 9.2 Amendments...........................................................................17
Section 9.3 Notices..............................................................................17
Section 9.4 Benefit..............................................................................18
Section 9.5 Governing Law........................................................................18
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CROSS REFERENCE TABLE
Section Section
of of
Trust Indenture Act of 1939, as amended Guarantee Agreement
310(a)............................................................... 4.1(a)
310(b)............................................................... 4.1(c), 2.8
310(c)............................................................... Not Applicable
311(a)............................................................... 2.2(b)
311(b)............................................................... 2.2(b)
311(c)............................................................... Not Applicable
312(a)............................................................... 2.2(a)
312(b)............................................................... 2.2(b)
313.................................................................. 2.3
314(a)............................................................... 2.4
314(b)............................................................... Not Applicable
314(c)............................................................... 2.5
314(d)............................................................... Not Applicable
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
317(a)............................................................... 3.1
317(b)............................................................... Not Applicable
318(a)............................................................... 2.1(b)
318(b)............................................................... 2.1
318(c)............................................................... 2.1(b)
Note: This Cross-Reference Table does not constitute part of this
Agreement and shall not affect the interpretation of any of its
terms or provisions.
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred
Securities Guarantee"), dated as of September 28, 2001, is executed and
delivered by SECOND BANCORP INCORPORATED, an Ohio corporation (the
"Guarantor"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation
organized under the laws of the State of Delaware, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Second Bancorp
Capital Trust I, a Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of September 28, 2001, among the trustees of the
Trust named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof up to 3,200,000 preferred securities, having an
aggregate Liquidation Amount of up to $32,000,000 designated the 9.00%
Cumulative Trust Preferred Securities;
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
I DEFINITIONS AND INTERPRETATION
1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred
Securities Guarantee but not defined in the
preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Trust Agreement as at the
date of execution of this Preferred Securities
Guarantee have the same meaning when used in this
Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee;
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(c) a term defined anywhere in this Preferred
Securities Guarantee has the same meaning
throughout;
(d) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities
Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred
Securities Guarantee, unless otherwise defined in
this Preferred Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday, a day on
which federal or state banking institutions in New York, New York or Warren,
Ohio are authorized or required by law, executive order or regulation to close
or a day on which the Corporate Trust Office of the Guarantee Trustee is closed
for business.
"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 Agreement is located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the 9.00% Subordinated Debentures due December 31,
2031, of the Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means Second Bancorp Incorporated, issuer of the
Debentures under the Indenture.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Trust: (i) any accrued and unpaid Distributions that are
required to be paid on such Preferred Securities, to the extent the Trust shall
have funds available therefor, (ii) the redemption price, including all
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accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), to the extent the Trust has funds available therefor, with respect to
any Preferred Securities called for redemption by the Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the Liquidation Amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Trust shall have funds available therefor (the "Liquidation Distribution"),
and (b) the amount of assets of the Trust remaining available for distribution
to Holders in liquidation of the Trust.
"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 Preferred Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Guarantor" means Second Bancorp Incorporated, an Ohio corporation.
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee or any of their
respective Affiliates.
"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 September 28, 2001, among
the Debenture Issuer and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee of the Trust.
"Liquidation Amount" means the stated value of $10 per Preferred
Security.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"Majority in Liquidation Amount of the Preferred Securities" means the
holders of more than 50% of the Liquidation Amount of all of the Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person, at least one of
whom shall be the principal executive officer, principal financial officer,
principal accounting officer, treasurer or any vice president of such Person.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or
condition and the definition relating thereto;
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(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each
officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to
express an informed opinion as to whether or not
such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been
complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" means the 9.00% Cumulative Trust Preferred
Securities representing undivided beneficial interests in the assets of the
Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee with
direct responsibility for the administration of this Preferred Securities
Guarantee, including any vice-president, any assistant vice-president, any
assistant secretary or other officer or assistant officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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II TRUST INDENTURE ACT
2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are
required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies
or conflicts with the duties imposed by Section
310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
2.2 Lists of Holders of Securities.
(a) In the event the Guarantee Trustee is not also
acting in the capacity of the Property Trustee
under the Trust Agreement, the Guarantor shall
cause to be provided to the Guarantee Trustee a
list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of
the Holders of the Preferred Securities ("List of
Holders") as of the date (i) within one Business
Day after March 15, June 15, September 15 and
December 15 of each year, commencing December 15,
2001, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for
a List of Holders as of a date no more than 15
days before such List of Holders is given to the
Guarantee Trustee; PROVIDED, that the Guarantor
shall not be obligated to provide such List of
Holders at any time the List of Holders does not
differ from the most recent List of Holders caused
to have been given to the Guarantee Trustee by the
Guarantor. 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 Sections 311(a), 311(b) and
Section 312(b) of the Trust Indenture Act.
2.3 Reports by the Guarantee Trustee.
On or before July 31 of each year, commencing July 31, 2002, the
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
2.4 Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee such documents,
reports and information as required by Section 314 of the Trust Indenture Act
(if any) and the compliance
5
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.
2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may
be given in the form of an Officers' Certificate.
2.6 Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
2.7 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders
of the Preferred Securities, notices of all Events
of Default actually known to a Responsible Officer
of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice;
PROVIDED, that, except in the case of a default by
Guarantor on any of its payment obligations, 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
Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless (i) the
Guarantee Trustee shall have received written
notice of such Event of Default, or (ii) a
Responsible Officer of the Guarantee Trustee
charged with the administration of the Trust
Agreement shall have obtained actual knowledge of
such Event of Default.
2.8 Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
3.1 Powers and Duties of the Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held
by the Guarantee Trustee for the benefit of the
Holders of the Preferred Securities, and the
Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person
except a Holder of Preferred Securities exercising
his or her rights pursuant to Section 5.4(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 Preferred Securities Guarantee
for the benefit of the Holders of the Preferred
Securities.
(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 Preferred
Securities Guarantee, and no implied covenants
shall be read into this Preferred Securities
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) 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 Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities
Guarantee shall be construed to relieve the
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
Preferred Securities
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 Preferred
7
Securities Guarantee, and no
implied covenants or
obligations shall be read
into this Preferred Securities
Guarantee against the
Guarantee Trustee; 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 Preferred Securities
Guarantee; but in the case of
any such certificates or
opinions that by any provision
hereof are specifically
required to be furnished to
the 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 Preferred
Securities 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 Responsible Officer
of 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
Preferred Securities relating to the
time, method and place of conducting any
proceeding for any remedy available to
the Guarantee Trustee, or exercising any
trust or power conferred upon the
Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred
Securities 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
reasonably assured to it under the terms
of this Preferred Securities Guarantee
or indemnity, reasonably satisfactory to
the Guarantee Trustee, against such risk
or liability is not reasonably assured
to it.
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3.2 Certain Rights of Guarantee Trustee.
(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
believed by it to be genuine and to have
been signed, sent or presented by the
proper party or parties;
(ii) Any direction or act of the Guarantor
contemplated by this Preferred
Securities Guarantee shall be
sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this
Preferred Securities 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
Officers' Certificate 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
rerecording, refiling or registration
thereof);
(v) the Guarantee Trustee may consult with
counsel, and the written 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
Preferred Securities 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 Preferred
Securities 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
9
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 that,
nothing contained in this Section
3.2(a)(vi) 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
Preferred Securities 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) 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 Preferred Securities
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
Preferred Securities 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
Preferred Securities, (ii) may refrain
from enforcing such remedy or right or
taking such other action until such
instructions are received, and (iii)
shall be protected in conclusively
relying on or acting in accordance with
such instructions.
(b) No provision of this Preferred Securities
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
10
such right, power, duty or obligation. No
permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty.
3.3 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 Preferred Securities
Guarantee.
IV GUARANTEE TRUSTEE
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 corporation organized and doing
business under the laws of the United
States of America or any state or
territory thereof or of the District of
Columbia, or a corporation or Person
permitted by the Securities and Exchange
Commission to act as an institutional
trustee under the Trust Indenture Act,
authorized under such laws to exercise
corporate trust powers, having a
combined capital and surplus of at least
$50,000,000, and subject to supervision
or examination by federal, state,
territorial or District of Columbia
authority. If such corporation publishes
reports of condition at least annually,
pursuant to law or to the requirements
of the supervising or examining
authority referred to above, then, for
the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such
corporation shall be deemed to be its
combined capital and surplus as set
forth in its most recent report of
condition so published.
(b) If at any time the 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.
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4.2 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee
may be appointed or removed without cause at any
time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(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. 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 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 Preferred Securities
Guarantee or removal or resignation of the
Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Guarantee Trustee
all fees and expenses accrued to the date of such
termination, removal or resignation.
V GUARANTEE
5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Trust), as and when due, regardless of any defense, right of set-off
or counterclaim that the Trust 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 Trust to pay such
amounts to the Holders.
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5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust 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.
5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the
Trust of any express or implied agreement,
covenant, term or condition relating to the
Preferred Securities to be performed or observed
by the Trust;
(b) the extension of time for the payment by the Trust
of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the
Preferred Securities or the extension of time for
the performance of any other obligation under,
arising out of, or in connection with, the
Preferred Securities (other than an extension of
time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum
payable that results from the extension of any
interest payment period on the Debentures 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 Preferred Securities, or any action on the
part of the Trust 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 Trust or any of
the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) any failure or omission to receive any regulatory
approval or consent required in connection with
the Preferred Securities (or the common equity
securities issued by the Trust), including the
failure to receive any
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approval of the Board of Governors of the Federal
Reserve System required for the redemption of the
Preferred Securities;
(g) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; 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 consent of, the Guarantor with respect to the happening of any of the
foregoing.
5.4 Rights of Holders.
(a) Subject to Section 5.4(b), the Holders of a
Majority in Liquidation Amount of the Preferred
Securities have the right to direct the time,
method and place of conducting of any proceeding
for any remedy available to the Guarantee Trustee
in respect of this Preferred Securities Guarantee
or exercising any trust or power conferred upon
the Guarantee Trustee under this Preferred
Securities Guarantee.
(b) Any Holder of Preferred Securities may institute
and prosecute a legal proceeding directly against
the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust,
the Guarantee Trustee or any other Person.
5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Trust in respect of any amounts paid
to such Holders by the Guarantor under this Preferred Securities Guarantee;
PROVIDED, HOWEVER, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
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5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.
VI LIMITATION OF TRANSACTIONS; SUBORDINATION
6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default under this Preferred Securities Guarantee, an
event of default under the Trust Agreement or during an Extended Interest
Payment Period (as defined in the Indenture), then (a) the Guarantor shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than as a result of a reclassification of its capital
stock for another class of its capital stock) and (b) the Guarantor shall not
make any payment of interest or principal on or repay, repurchase or redeem any
debt securities issued by the Guarantor which rank pari passu with or junior to
the Debentures other than payments under this Preferred Securities Guarantee.
6.2 Ranking.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior Obligations,
as defined in the Indenture, of the Guarantor, to the extent and in the manner
set forth in the Indenture, and the applicable provisions of the Indenture will
apply, in all relevant respects, to the obligations of the Guarantor hereunder.
VII TERMINATION
7.1 Termination.
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) full payment
of the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust, or (iii) distribution of the Debentures to the Holders of the
Preferred Securities. Notwithstanding the foregoing, this Preferred Securities
Guarantee shall continue to be effective or shall be reinstated, as the case may
be, if at any time any Holder of Preferred Securities must restore payment of
any sums paid under the Preferred Securities or under this Preferred Securities
Guarantee.
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VIII INDEMNIFICATION
8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the
Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified
Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner
that such Indemnified Person reasonably believed
to be within the scope of the authority conferred
on such Indemnified Person by this Preferred
Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the
Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor
by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's
professional or expert competence and who has been
selected with reasonable care by or on behalf of
the Guarantor, including information, opinions,
reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and
amount of assets from which Distributions to
Holders of Preferred Securities might properly be
paid.
8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
IX MISCELLANEOUS
9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
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9.2 Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in Liquidation Amount of
the Preferred Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of Holders of the Preferred Securities apply to the
giving of such approval.
9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified 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
Preferred Securities):
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
(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 Preferred Securities):
Second Bancorp Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at
the address set forth on the books and records of
the Trust.
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.
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9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.
This Preferred Securities Guarantee is executed as of the day and year
first above written.
SECOND BANCORP INCORPORATED, as Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Its: Executive Vice President & Secretary
-------------------------------------------
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Its: Vice President
-------------------------------------------
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