EXHIBIT 4(o)
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GUARANTEE AGREEMENT
BETWEEN
CITIZENS BANKING CORPORATION
AS GUARANTOR
AND
U.S. BANK NATIONAL ASSOCIATION
AS GUARANTEE TRUSTEE
RELATING TO
CITIZENS FUNDING TRUST I
DATED AS OF SEPTEMBER [*], 2006
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CITIZENS FUNDING TRUST I
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE AGREEMENT
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310 (a)................................................... 4.1(a)
(b)................................................... 4.1(c), 2.8
(c)................................................... Inapplicable
311 (a)................................................... 2.2(b)
(b)................................................... 2.2(b)
(c)................................................... Inapplicable
312 (a)................................................... 2.2(a)
(b)................................................... 2.2(b)
313 ...................................................... 2.3
314 (a)................................................... 2.4
(b)................................................... Inapplicable
(c)................................................... 2.5
(d)................................................... Inapplicable
(e)................................................... 1.1, 2.5, 3.2
(f)................................................... 2.1, 3.2
315 (a)................................................... 3.1(d)
(b)................................................... 2.7
(c)................................................... 3.1(c)
(d)................................................... 3.1(d)
316 (a)................................................... 1.1, 2.6, 5.4
(b)................................................... 5.3, 5.7
(c)................................................... 8.2
317 (a)................................................... Inapplicable
(b)................................................... Inapplicable
318 (a)................................................... 2.1(b)
(b)................................................... 2.1
(c)................................................... 2.1(a)
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Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement and shall not affect the
interpretation of any of its terms or provisions.
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TABLE OF CONTENTS
Page
----
ARTICLE I INTERPRETATION AND DEFINITIONS................................. 1
SECTION 1.1. Interpretation........................................... 1
SECTION 1.2. Definitions.............................................. 2
ARTICLE II TRUST INDENTURE ACT........................................... 5
SECTION 2.1. Trust Indenture Act; Application......................... 5
SECTION 2.2. List of Holders.......................................... 5
SECTION 2.3. Reports by the Guarantee Trustee......................... 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee................ 6
SECTION 2.5. Evidence of Compliance with Conditions Precedent......... 6
SECTION 2.6. Events of Default; Waiver................................ 6
SECTION 2.7. Events of Default; Notice................................ 6
SECTION 2.8. Conflicting Interests.................................... 6
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE........... 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee............... 6
SECTION 3.2. Certain Rights of Guarantee Trustee...................... 8
SECTION 3.3. Compensation; Indemnity; Fees............................ 9
ARTICLE IV GUARANTEE TRUSTEE............................................. 10
SECTION 4.1. Guarantee Trustee; Eligibility........................... 10
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.................................................. 10
ARTICLE V GUARANTEE...................................................... 11
SECTION 5.1. Guarantee................................................ 11
SECTION 5.2. Waiver of Notice and Demand.............................. 11
SECTION 5.3. Obligations Not Affected................................. 11
SECTION 5.4. Rights of Holders........................................ 12
SECTION 5.5. Guarantee of Payment..................................... 12
SECTION 5.6. Subrogation.............................................. 12
SECTION 5.7. Independent Obligations.................................. 13
ARTICLE VI COVENANTS AND SUBORDINATION................................... 13
SECTION 6.1. Subordination............................................ 13
SECTION 6.2. Pari Passu Guarantees.................................... 13
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ARTICLE VII TERMINATION.................................................. 13
SECTION 7.1. Termination.............................................. 13
ARTICLE VIII MISCELLANEOUS............................................... 13
SECTION 8.1. Successors and Assigns................................... 13
SECTION 8.2. Amendments............................................... 13
SECTION 8.3. Notices.................................................. 14
SECTION 8.4. Benefit.................................................. 15
SECTION 8.5. Governing Law............................................ 15
SECTION 8.6. Counterparts............................................. 15
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THIS GUARANTEE AGREEMENT, dated as of September [*], 2006, is executed and
delivered by CITIZENS BANKING CORPORATION, a Michigan corporation (the
"Guarantor") having its principal office at 000 X. Xxxxxxx Xxxxxx, Xxxxx,
Xxxxxxxx 00000, and U.S. Bank National Association, a national banking
association, 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 CITIZENS FUNDING TRUST I, a Delaware statutory trust (the
"Issuer Trust").
WITNESSETH:
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
September [*], 2006 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer Trust, the Issuer Trust is issuing $[*] aggregate
Liquidation Amount (as defined in the Trust Agreement) of its [*]% Enhanced
Trust Preferred Securities, Liquidation Amount $25 per Capital Security (the
"Capital Securities"), representing preferred undivided beneficial interests in
the assets of the Issuer Trust and having the terms set forth in the Trust
Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer Trust and the
proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined below), will be used to purchase the
Junior Subordinated Debentures (as defined in the Trust Agreement) of the
Guarantor which will be deposited with U.S. Bank National Association, as
Property Trustee under the Trust Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Capital
Securities, the Guarantor irrevocably and unconditionally agrees, to the extent
set forth herein, to pay to the Holders of the 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 Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Capital Securities:
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.2;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice-versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
Section 1.2. Definitions. As used in this Guarantee Agreement, the terms
set forth below shall, unless the context otherwise requires, have the following
meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that the Issuer Trust
shall not be deemed to be an Affiliate of the Guarantor. For the purposes of
this definition, "control," when used with respect to any specified Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Board of Directors" means either the board of directors of the Guarantor
or any committee of that board duly authorized to act hereunder.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 30 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to any Capital Securities called for redemption by the
Issuer Trust, to the extent the Issuer Trust shall have funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary termination,
winding up or liquidation of the Issuer Trust, unless Junior Subordinated
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the
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Liquidation Amount of $25 per Capital Security plus accumulated and unpaid
Distributions on the Capital Securities to the date of payment to the extent
that the Issuer Trust shall have funds available therefor at such time and (b)
the amount of assets of the Issuer Trust remaining available for distribution to
Holders in liquidation of the Issuer Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means U.S. Bank National Association, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer Trust, 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, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of September [*], 2006, between
the Guarantor and U.S. Bank National Association, as trustee, as supplemented
and amended from time to time.
"Junior Subordinated Debt" has the meaning specified in the Indenture.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Capital Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman or a Vice Chairman of the Board of Directors of such
Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Managing Director, any Director, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Associate,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any
other officer of the Corporate Trust Department of the Guarantee Trustee 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.
"Senior Indebtedness" means the principal, premium (if any) and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor, whether or not such
claim for post-petition interest is allowed in such proceeding) on and of all
indebtedness and obligations (other than the Capital Securities, but including
any debentures, notes or other evidence of indebtedness issued under the
Indenture) of, or guaranteed or assumed by, the Guarantor that (i) are for
borrowed money (ii) are evidenced by bonds, debentures, notes or other similar
instruments, (iii) represent obligations to policyholders of insurance or
investment contracts, (iv) represent a reimbursement obligation with respect to
a letter of credit, banker's acceptance or similar facility, or (v) represent
the deferred purchase price of property or services, in each case, whether
outstanding on the date of issuance of the Capital Securities or thereafter
created, incurred, assumed or guaranteed, and all amendments, renewals,
extensions, modifications and refundings of such indebtedness and obligations,
unless in any such case the instrument by which such indebtedness or obligations
are created, incurred, assumed or guaranteed by the Guarantor, or are otherwise
evidenced, provides that they are subordinated, or are not superior, in right of
payment to the Securities; provided, however, that Senior Indebtedness shall not
include, as applicable:
(1) any obligation of the Guarantor to any Subsidiary of the
Guarantor,
(2) any liability for Federal, state, local or other taxes owed or
owing by the Guarantor or any Subsidiary of the Guarantor,
(3) any accounts payable or other liability to trade creditors
(including guarantees thereof or instruments evidencing such liabilities)
(4) any obligations with respect to any capital stock of the
Guarantor, or
(5) any indebtedness which by its terms is expressly made equal in
rank and payment with or subordinated to the Securities.
; provided further, that if any Senior Indebtedness is disallowed, avoided or
subordinated pursuant to the provisions of Section 548 of Title 11 of the United
States Code or any applicable state fraudulent conveyance law, such Senior
Indebtedness nevertheless will constitute Senior Indebtedness.
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"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.
Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act through the operation of Section
318(c) thereof, such imposed duties shall control. If any provision of this
Guarantee Agreement modifies or excludes any provision of the Trust Indenture
Act which may be so modified or excluded, the latter provision shall be deemed
to apply to this Guarantee Agreement as so modified or to be excluded, as the
case may be.
Section 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, on or before June 30 and December 31 of each
year, commencing December 31, 2006, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders (the
"List of Holders") as of a date not more than 15 days prior to the delivery
thereof, and (ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such request,
a List of Holders as of a date not more than 15 days prior to the time such list
is furnished, in each case to the extent such information is in the possession
or control of the Guarantor and is not identical to a previously supplied list
of Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee. Not later than 60 days after
May 15 of each year, commencing May 15, 2007, the Guarantee Trustee shall
provide to the Holders such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act. The Guarantor will
notify the Guarantee Trustee if and when any Capital Securities are listed on
any stock exchange and of any delisting thereof.
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Section 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
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 of
the Guarantor pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Capital Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
Section 2.7. 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, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
Section 2.8. Conflicting Interests. The Trust Agreement and the Indenture
shall be deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a
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Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of
its appointment to act as Successor Guarantee Trustee. The right, title and
interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, 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 Agreement 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
Agreement, 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 Agreement; 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 Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the
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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 exercising
any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement 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 Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
Section 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 reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to take any
action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement 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
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expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.3. Compensation; Indemnity; Fees. The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation as shall be agreed in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provisions of law in
regard to the compensation of a trustee of an express trust);
(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 the Guarantee Trustee in accordance with any
provision of this Guarantee Agreement (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 bad
faith; and
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(c) to indemnify the Guarantee Trustee and its directors, officers,
agents and employees for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes, incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement;
(d) in no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action;
(e) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder;
and
(f) the Trustee may request that the Company deliver a certificate
setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this Indenture.
The provisions of this Section 3.3 shall survive the termination of this
Guarantee Agreement or the earlier resignation or removal of the Guarantee
Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section
4.1 and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(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 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.
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(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Guarantee Trustee
resigning or being removed may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.1. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer Trust), as and when
due, regardless of any defense, right of set-off or counterclaim which the
Issuer Trust may have or assert, except the defense of payment. 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 Trust
to pay such amounts to the Holders.
Section 5.2. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, the Issuer 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.
Section 5.3. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement 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 Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Junior Subordinated Debentures as provided in the Indenture), 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;
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(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 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 Issuer Trust or any of the assets of
the Issuer Trust;
(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 (other than payment of
the underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4. Rights of Holders. The Guarantor expressly acknowledges that:
(i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be
held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to
enforce this Guarantee Agreement on behalf of the Holders; (iii) 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 Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer Trust or any other Person.
Section 5.5. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer Trust) or upon
distribution of Junior Subordinated Debentures to Holders as provided in the
Trust Agreement.
Section 5.6. Subrogation. The Guarantor shall be subrogated to all rights
(if any) of the Holders against the Issuer Trust in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Issuer Trust pursuant to Section 5.1;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any
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amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
Section 5.7. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer Trust
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 Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1. Subordination. The obligations of the Guarantor under this
Guarantee Agreement will constitute unsecured obligations of the Guarantor and
will rank subordinate and junior in right of payment to all Senior Indebtedness
of the Guarantor. The obligations of the Guarantor under this Guarantee
Agreement do not constitute Senior Indebtedness.
Section 6.2. Pari Passu Guarantees. The obligations of the Guarantor under
this Guarantee Agreement shall rank pari passu with the obligations of the
Guarantor under any similar guarantee agreements issued by the Guarantor on
behalf of the holders of preferred or capital securities issued by any Citizens
Trust (as defined in the Indenture).
ARTICLE VII
TERMINATION
Section 7.1. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon (i) full payment of the Redemption Price of
all Capital Securities, (ii) the distribution of Junior Subordinated Debentures
to the Holders in exchange for all of the Capital Securities or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Capital Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement 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 a consolidation, merger or sale involving the Guarantor that is
permitted under Article VIII of the Indenture and pursuant to which the
successor or assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders
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will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
Section 8.3. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Citizens Banking Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
(b) if given to the Issuer Trust, in care of the Guarantee Trustee, at
the Issuer Trust's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer Trust may give
notice to the Holders:
Citizens Funding Trust I
c/o Citizens Banking Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to:
U.S. Bank National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Corporate Trust Services
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
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Section 8.4. Benefit. This Guarantee Agreement is solely for the benefit of
the Holders and is not separately transferable from the Capital Securities.
Section 8.5. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Section 8.6. Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the undersigned have executed this Guarantee Agreement
as of the date first above written.
CITIZENS BANKING CORPORATION
By:
------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
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