Exhibit 1.2
_________________________________________________
GUARANTEE AGREEMENT
BY AND BETWEEN
MID-WISCONSIN FINANCIAL SERVICES, INC.
AND
WILMINGTON TRUST COMPANY
DATED AS OF OCTOBER 14, 2005
_________________________________________________
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Guarantee"), dated as of October 14, 2005, is
executed and delivered by Mid-Wisconsin Financial Services, Inc., a Wisconsin
corporation (the "Guarantor"), and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Mid-Wisconsin Statutory Trust I, a Delaware statutory trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of the date hereof among Wilmington Trust Company, not
in its individual capacity but solely as institutional trustee, the
administrators of the Issuer named therein, the Guarantor, as sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer is issuing on the date hereof those undivided beneficial
interests, having an aggregate liquidation amount of $10,000,000.00 (the
"Capital Securities"); and
WHEREAS, as incentive for the Holders to purchase the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of Capital Securities the
Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Guarantee, unless the context otherwise requires:
(a)capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b)a term defined anywhere in this Guarantee has the same meaning
throughout;
(c)all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
(d)all references in this Guarantee to "Articles" or "Sections" are to
Articles or Sections of this Guarantee, unless otherwise specified;
(e)terms defined in the Declaration as at the date of execution of this
Guarantee have the same meanings when used in this Guarantee, unless otherwise
defined in this Guarantee or unless the context otherwise requires; and
(f)a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Beneficiaries" means any Person to whom the Issuer is or hereafter
becomes indebted or liable.
"Capital Securities" has the meaning set forth in the recitals to this
Guarantee.
"Common Securities" means the common securities issued by the Issuer to
the Guarantor pursuant to the Declaration.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the debt securities of the Guarantor designated the
Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures due 2035
held by the Institutional Trustee (as defined in the Declaration) of the
Issuer.
"Declaration Event of Default" means an "Event of Default" as defined in
the Declaration.
"Event of Default" has the meaning set forth in Section 2.4(a).
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) which are required to be paid on such Capital
Securities to the extent the Issuer shall have funds available therefor,
(ii) the Redemption Price to the extent the Issuer has funds available
therefor, with respect to any Capital Securities called for redemption by the
Issuer, (iii) the Special Redemption Price to the extent the Issuer has funds
available therefor, with respect to Capital Securities redeemed upon the
occurrence of a Special Event, and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than
in connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Guarantor" means Mid-Wisconsin Financial Services, Inc. and each of its
successors and assigns.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Capital Securities; provided, however, that, in determining
whether the Holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
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"Indenture" means the Indenture dated as of the date hereof between the
Guarantor and Wilmington Trust Company, not in its individual capacity but
solely as trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the institutional trustee of the Issuer.
"Issuer" has the meaning set forth in the opening paragraph to this
Guarantee.
"Liquidation Distribution" has the meaning set forth in the definition of
"Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but not including
liabilities related to taxes) of the Issuer other than obligations of the
Issuer to pay to holders of any Trust Securities the amounts due such holders
pursuant to the terms of the Trust Securities.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by one Authorized Officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee shall include:
(a)a statement that the officer signing the Officer's Certificate
has read the covenant or condition and the definitions relating thereto;
(b)a brief statement of the nature and scope of the examination or
investigation undertaken by the officer in rendering the Officer's
Certificate;
(c)a statement that the officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d)a statement as to whether, in the opinion of the officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Redemption Price" has the meaning set forth in the Indenture.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Special Event" has the meaning set forth in the Indenture.
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"Special Redemption Price" has the meaning set forth in the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.
"Trust Securities" means the Common Securities and the Capital
Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 2.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a)This Guarantee shall be held by the Guarantee Trustee for the benefit
of the Holders of the Capital Securities, and the Guarantee Trustee shall not
transfer this Guarantee to any Person except a Holder of Capital Securities
exercising his or her rights pursuant to Section 4.4(b) or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right, title and
interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b)If an Event of Default actually known to a Responsible Officer of the
Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall
enforce this Guarantee for the benefit of the Holders of the Capital
Securities.
(c)The Guarantee Trustee, before the occurrence of any Event of Default
and after curing all Events of Default that may have occurred, shall undertake
to perform only such duties as are specifically set forth in this Guarantee,
and no implied covenants shall be read into this Guarantee against the
Guarantee Trustee. In case an Event of Default has occurred (that has not been
waived pursuant to Section 2.4) and is actually known to a Responsible Officer
of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d)No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A)the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee,
and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee, and no implied covenants or obligations
shall be read into this Guarantee against the Guarantee Trustee;
and
(B)in the absence of 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
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to the Guarantee Trustee and conforming to the requirements of this
Guarantee; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that such Responsible Officer of the
Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the written direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or relating to the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds is
not reasonably assured to it under the terms of this Guarantee or
security and indemnity, reasonably satisfactory to the Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 2.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a)Subject to the provisions of Section 2.1:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by an Officer's Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate of the Guarantor which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any re-recording,
refiling or re-registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and
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in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Guarantee Trustee shall have the right at any time to
seek instructions concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Guarantee
Trustee's agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided, however, that nothing contained in this Section 2.2(a)(vi)
shall relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(viii)The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the
signature of the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital Securities,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such
instructions.
(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Guarantee.
(b)No provision of this Guarantee shall be deemed to impose any duty or
obligation on the Guarantee Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty.
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SECTION 2.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee.
SECTION 2.4. EVENTS OF DEFAULT; WAIVER.
(a)An Event of Default under this Guarantee will occur upon the failure
of the Guarantor to perform any of its payment or other obligations hereunder.
(b)The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of
all of the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
SECTION 2.5. EVENTS OF DEFAULT; NOTICE.
(a)The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
of the Capital Securities and the Guarantor, notices of all Events of Default
actually known to a Responsible Officer of the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, however,
that the Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Capital Securities.
(b)The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice from the Guarantor or a Holder of the Capital Securities (except in the
case of a payment default), or a Responsible Officer of the Guarantee Trustee
charged with the administration of this Guarantee shall have obtained actual
knowledge thereof.
ARTICLE III
GUARANTEE TRUSTEE
SECTION 3.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a)There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor, and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of
the District of Columbia, or Person authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of
at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the
purposes of this Section 3.1(a)(ii), the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
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(b)If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 3.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 3.2(c).
(c)If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign to the extent
and in the manner provided by, and subject to this Guarantee.
SECTION 3.2. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a)Subject to Section 3.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an Event of
Default.
(b)The Guarantee Trustee shall not be removed in accordance with Section
3.2(a) until a Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c)The Guarantee Trustee appointed to office shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d)If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e)No Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Guarantee Trustee.
(f)Upon termination of this Guarantee or removal or resignation of the
Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay to the
Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2
and 7.3 accrued to the date of such termination, removal or resignation.
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ARTICLE IV
GUARANTEE
SECTION 4.1. GUARANTEE.
(a)The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense (except the
defense of payment by the Issuer), right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
(b)The Guarantor hereby also agrees to assume any and all Obligations of
the Issuer and in the event any such Obligation is not so assumed, subject to
the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the full payment, when and as
due, of any and all Obligations to such Beneficiaries. This Guarantee is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
SECTION 4.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee and of
any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 4.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a)the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Issuer;
(b)the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Special Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of or in connection with, the Capital Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Special Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the Debentures permitted by
the Indenture);
(c)any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d)the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
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(e)any invalidity of, or defect or deficiency in, the Capital Securities;
(f)the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g)any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 4.4. RIGHTS OF HOLDERS.
(a)The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
this Guarantee or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under this Guarantee; provided, however, that (subject to
Section 2.1) the Guarantee Trustee shall have the right to decline to follow
any such direction if the Guarantee Trustee being advised by counsel determines
that the action or proceeding so directed may not lawfully be taken or if the
Guarantee Trustee in good faith by its board of directors or trustees,
executive committees or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or proceedings so directed
would involve the Guarantee Trustee in personal liability.
(b)Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee, without first instituting a legal proceeding against the
Issuer, the Guarantee Trustee or any other Person. The Guarantor waives any
right or remedy to require that any such action be brought first against the
Issuer, the Guarantee Trustee or any other Person before so proceeding directly
against the Guarantor.
SECTION 4.5. GUARANTEE OF PAYMENT.
This Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 4.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Capital Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 4.3 hereof.
SECTION 4.8. ENFORCEMENT BY A BENEFICIARY.
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A Beneficiary may enforce the obligations of the Guarantor contained in
Section 4.1(b) directly against the Guarantor and the Guarantor waives any
right or remedy to require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor. The Guarantor
shall be subrogated to all rights (if any) of any Beneficiary against the
Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce
or exercise any rights that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if at the time of any such payment, and after
giving effect to such payment, any amounts are due and unpaid under this
Guarantee.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1. LIMITATION OF TRANSACTIONS.
So long as any Capital Securities remain outstanding, if (a) there shall
have occurred and be continuing an Event of Default or a Declaration Event of
Default or (b) the Guarantor shall have selected an Extension Period as
provided in the Declaration and such period, or any extension thereof, shall
have commenced and be continuing, then the Guarantor shall not and shall not
permit any Affiliate to (x) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Guarantor's or such Affiliate's capital stock (other than payments
of dividends or distributions to the Guarantor) or make any guarantee payments
with respect to the foregoing or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor or any Affiliate that rank pari passu in all
respects with or junior in interest to the Debentures (other than, with
respect to clauses (x) and (y) above, (I repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with
any employment contract, benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants,
in connection with a dividend reinvestment or stockholder stock purchase plan
or in connection with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the
occurrence of the Event of Default, Declaration Event of Default or Extension
Period, as applicable, (ii) as a result of any exchange or conversion of any
class or series of the Guarantor's capital stock (or any capital stock of a
subsidiary of the Guarantor) for any class or series of the Guarantor's capital
stock or of any class or series of the Guarantor's indebtedness for any class
or series of the Guarantor's capital stock, (iii) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) any declaration of a dividend in connection with any
stockholders' rights plan, or the issuance of rights, stock or other property
under any stockholders' rights plan, or the redemption or repurchase of rights
pursuant thereto, (v) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith, or
(vi) payments under this Guarantee).
SECTION 5.2. RANKING.
This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By
their acceptance thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Guarantee and the other terms set forth herein.
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The right of the Guarantor to participate in any distribution of assets
of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under
this Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments hereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.
ARTICLE VI
TERMINATION
SECTION 6.1. TERMINATION.
This Guarantee shall terminate as to the Capital Securities (i) upon full
payment of the Redemption Price or Special Redemption Price of all Capital
Securities then outstanding,
(ii) upon the distribution of all of the Debentures to the Holders of all of
the Capital Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon dissolution of the Issuer. This Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any Holder of Capital Securities must restore payment of any sums paid
under the Capital Securities or under this Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. EXCULPATION.
(a)No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee and
in a manner that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this Guarantee
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b)An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or the
Guarantor by any Person as to matters the Indemnified Person reasonably
believes are within such other Person's professional or expert competence and
who, if selected by such Indemnified Person, has been selected with reasonable
care by such Indemnified Person, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Capital Securities might properly be paid.
SECTION 7.2. INDEMNIFICATION.
(a)The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or willful misconduct on
the part of the Indemnified Person, arising out of or in
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connection with the acceptance or administration of the trust or trusts
hereunder, including, but not limited to, the costs and expenses (including
reasonable legal fees and expenses) of the Indemnified Person defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of the Indemnified Person's powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.2 shall
survive the resignation or removal of the Guarantee Trustee and the termination
of this Guarantee.
(b)Promptly after receipt by an Indemnified Person under this Section 7.2
of notice of the commencement of any action, such Indemnified Person will, if a
claim in respect thereof is to be made against the Guarantor under this
Section 7.2, notify the Guarantor in writing of the commencement thereof; but
the failure so to notify the Guarantor (i) will not relieve the Guarantor from
liability under paragraph (a) above unless and to the extent that the Guarantor
did not otherwise learn of such action and such failure results in the
forfeiture by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any
Indemnified Person other than the indemnification obligation
provided in paragraph (a) above. The Guarantor shall be entitled to appoint
counsel of the Guarantor's choice at the Guarantor's expense to represent the
Indemnified Person in any action for which indemnification is sought (in which
case the Guarantor shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the Indemnified Person or Persons
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the Indemnified Person. Notwithstanding the
Guarantor's election to appoint counsel to represent the Guarantor in an
action, the Indemnified Person shall have the right to employ separate counsel
(including local counsel), and the Guarantor shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen
by the Guarantor to represent the Indemnified Person would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the Indemnified Person and the
Guarantor and the Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it and/or other Indemnified Person(s)
which are different from or additional to those available to the Guarantor,
(iii) the Guarantor shall not have employed counsel satisfactory to the
Indemnified Person to represent the Indemnified Person within a reasonable
time after notice of the institution of such action or (iv) the Guarantor
shall authorize the Indemnified Person to employ separate counsel at the
expense of the Guarantor. The Guarantor will not, without the prior written
consent of the Indemnified Persons, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the Indemnified Persons are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each Indemnified Person from
all liability arising out of such claim, action, suit or proceeding.
SECTION 7.3. COMPENSATION; REIMBURSEMENT OF EXPENSES.
The Guarantor agrees:
(a)to pay to the Guarantee Trustee from time to time such compensation
for all services rendered by it hereunder as the parties shall agree to from
time to time (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust); and
(b)except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by it in accordance with any provision of this
Guarantee (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or willful misconduct.
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For purposes of clarification, this Section 7.3 does not contemplate the
payment by the Guarantor of acceptance or annual administration fees owing to
the Guarantee Trustee for services to be provided by the Guarantee Trustee
under this Guarantee or the fees and expenses of the Guarantee Trustee's
counsel in connection with the closing of the transactions contemplated by
this Guarantee. The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor's assets to another entity, in each case, to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of
at least a Majority in liquidation amount of the Capital Securities.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes that do not adversely affect the
rights of Holders of the Capital Securities in any material respect (in which
case no consent of Holders will be required), this Guarantee may be amended
only with the prior approval of the Holders of not less than a Majority in
liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.
SECTION 8.3. NOTICES.
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a)If given to the Guarantee Trustee, at the Guarantee Trustee's mailing
address set forth below (or such other address as the Guarantee Trustee may
give notice of to the Holders of the Capital Securities and the Guarantor):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
(b)If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities and to the Guarantee Trustee):
Mid-Wisconsin Financial Services, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
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Attention: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
(c)If given to any Holder of the Capital Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4.BENEFIT.
This Guarantee is solely for the benefit of the Beneficiaries and,
subject to Section 2.1(a), is not separately transferable from the Capital
Securities.
SECTION 8.5.GOVERNING LAW.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
SECTION 8.6.COUNTERPARTS.
This Guarantee may be executed in one or more counterparts, each of which
shall be an original, but all of which taken together shall constitute one and
the same instrument.
SECTION 8.7 SEPARABILITY.
In case one or more of the provisions contained in this Guarantee shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Guarantee, but this Guarantee shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein.
Signatures appear on the following page
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THIS GUARANTEE is executed as of the day and year first above written.
MID-WISCONSIN FINANCIAL SERVICES, INC.,
as Guarantor
By: XXXX X. XXXXX
Name: XXXX X. XXXXX
Title: PRESIDENT/CEO
WILMINGTON TRUST COMPANY, as Guarantee
Trustee
By: XXXXXXXXXXX X. XXXXXXX
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Assistant Vice President
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