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PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
NATIONAL PENN BANCSHARES, INC.
AND
CHRISTIANA BANK & TRUST COMPANY
Dated as of August __, 2002
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TABLE OF CONTENTS
Page No.
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions and Interpretation..........................2
ARTICLE II TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application........................6
Section 2.2 The List of Holders of the Securities...................6
Section 2.3 Reports by the Preferred Guarantee Trustee..............6
Section 2.4 Periodic Reports to the Preferred Guarantee Trustee.....6
Section 2.5 Evidence of Compliance with Conditions Precedent........6
Section 2.6 Events of Default; Waiver...............................7
Section 2.7 Event of Default; Notice................................7
Section 2.8 Conflicting Interests...................................7
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee....7
Section 3.2 Certain Rights of the Preferred Guarantee Trustee.......9
Section 3.3 Not Responsible for Recitals or Issuance of Guarantee..11
ARTICLE IV THE PREFERRED GUARANTEE TRUSTEE
Section 4.1 The Preferred Guarantee Trustee; Eligibility...........12
Section 4.2 Appointment, Removal and Resignation of the Preferred
Guarantee Trustee..................................12
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ARTICLE V GUARANTEE
Section 5.1 Guarantee..............................................13
Section 5.2 Waiver of Notice and Demand............................13
Section 5.3 Obligations Not Affected...............................14
Section 5.4 Rights of the Holders..................................15
Section 5.5 Guarantee of Payment...................................15
Section 5.6 Subrogation............................................15
Section 5.7 Independent Obligations................................15
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation on Transactions.............................16
Section 6.2 Ranking................................................16
ARTICLE VII TERMINATION
Section 7.1 Termination............................................16
ARTICLE VIII INDEMNIFICATION
Section 8.1 Exculpation............................................17
Section 8.2 Indemnification........................................17
ARTICLE IX MISCELLANEOUS
Section 9.1 Successors and Assigns.................................17
Section 9.2 Amendments.............................................18
Section 9.3 Notices................................................18
Section 9.4 Benefit................................................18
Section 9.5 Governing Law..........................................19
Section 9.6 Counterparts...........................................19
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CROSS-REFERENCE TABLE
Certain Sections of this Preferred Securities Guarantee Agreement
relating to Sections 310 through 318 of the Trust Indenture Act of 1939.
Preferred Securities
Trust Indenture Guarantee Agreement
Act Section Section
--------------- ---------------------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
312(c) 2.2
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
315(e) Not Applicable
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Preferred Securities Guarantee Agreement.
iii
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred
Securities Guarantee"), dated as of August __, 2002, is executed and delivered
by NATIONAL PENN BANCSHARES, INC., a Pennsylvania corporation (the "Guarantor"),
and CHRISTIANA BANK & TRUST COMPANY, a banking corporation organized and
existing under the laws of the State of Delaware, as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of NPB CAPITAL
TRUST II, a Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of August ___, 2002, among the trustees of the
Trust named therein, the Guarantor, as depositor, and the holders from time to
time of undivided beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof up to 2,530,000 preferred securities, having an
aggregate liquidation amount of $63,250,000, designated the _____% Cumulative
Trust Preferred Securities (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement, of which $55,000,000 liquidation amount of
Preferred Securities is being issued as of the date hereof. Up to the remaining
$8,250,000 liquidation amount of Preferred Securities may be issued by the Trust
if and to the extent that the over-allotment option granted by the Guarantor and
the Trust pursuant to the Underwriting Agreement (as defined in the Trust
Agreement) is exercised by the Underwriters named in the Underwriting Agreement;
and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, and intending to be legally bound hereby, the Guarantor executes
and delivers this Preferred Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.
-------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) terms defined in the Trust Agreement as at the date of
execution of this Preferred Securities Guarantee have the same meaning
when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended in writing from time to
time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" means, with respect to a specified Person, (a) any other
Person directly or indirectly owning, controlling or holding with power to vote
10% or more of the outstanding voting securities or other ownership interests of
the specified Person; (b) any other Person 10% or more of whose outstanding
voting securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any other
Person directly or indirectly controlling, controlled by, or under common
control with the specified Person; (d) a partnership in which the specified
Person is a general partner; (e) any officer or director of the specified
Person; and (f) if the specified Person is an individual, any entity of which
the specified Person is an officer, director or general partner.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which federal or state banking institutions in Wilmington, Delaware are
authorized or
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required by law, executive order or regulation to close, or a day on which the
Corporate Trust Office of the Preferred Guarantee Trustee or the Property
Trustee is closed for business.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 0000
Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration, or at any other time at such other address located within the
United States as the Trustee may designate from time to time by notice to the
Debenture holders and the Guarantor.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the _____% Subordinated Debentures due 2032, of the
Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means National Penn Bancshares, Inc., issuer of the
Debentures under the Indenture.
"Event of Default" means a default by the Guarantor on any of its
payments or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Trust: (i) any accrued and unpaid Distributions that are
required to be paid on such Preferred Securities, to the extent the Trust shall
have funds available therefor, (ii) the redemption price, including all accrued
and unpaid Distributions to the date of redemption (the "Redemption Price"), to
the extent the Trust has funds available therefor, with respect to any Preferred
Securities called for redemption by the Trust, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of the Debentures to the Holders in exchange
for the Preferred Securities as provided in the Trust Agreement), the lesser of
(A) the aggregate of the Liquidation Amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Trust shall have funds available therefor (the "Liquidation Distribution"),
and (B) the amount of assets of the Trust remaining available for distribution
to Holders in liquidation of the Trust.
"Guarantor" means National Penn Bancshares, Inc., a Pennsylvania
corporation.
"Holder" means a Person in whose name a Preferred Security is or
Preferred Securities are registered in the Securities Register; provided,
however, that, in determining whether the holders of the requisite percentage of
the Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor, the Preferred Guarantee
Trustee or any of their respective Affiliates.
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"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture, dated as of August ___, 2002, among
the Debenture Issuer and Christiana Bank & Trust Company, as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee of the Trust.
"Liquidation Amount" means the stated value of $25 per Preferred
Security.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"List of Holders" has the meaning set forth in Section 2.2 of this
Preferred Securities Guarantee.
"Majority in Liquidation Amount of the Preferred Securities" means the
Holders of more than 50% of the 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 of the Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person, at least one of
whom shall be the chairman, chief executive officer, president, chief financial
officer, chief accounting officer or treasurer of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint-venture,
limited liability company, trust, joint-stock company, unincorporated
organization or government
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or any agency or political subdivision thereof.
"Preferred Guarantee Trustee" means Christiana Bank & Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Preferred Securities" means the ______% Cumulative Trust Preferred
Securities representing undivided beneficial interests in the assets of the
Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence and during the continuation of an
Event of Default, the rights of holders of Common Securities to (a) payments in
respect of distributions, and (b) payments upon liquidation, redemption and
otherwise, are subordinated to the rights of holders of Preferred Securities.
"Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee with direct responsibility for the administration of this
Preferred Securities Guarantee, including any vice-president, any assistant
vice-president, managing director, director, associate or other officer of the
Corporate Trust Office of the Preferred Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the meanings
assigned to such terms as in the Trust Agreement (as defined in the Indenture).
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939, as
amended, is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939, as so amended.
5
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Preferred Securities Guarantee and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
Section 2.2 The List of Holders of the Securities.
--------------------------------------
(a) In the event the Preferred Guarantee Trustee is not also
the Securities Registrar, the Guarantor shall provide the Preferred
Guarantee Trustee with a list, in such form as the Preferred Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders of the Preferred Securities (the "List of Holders") (i) within
five (5) Business Days after March 15, June 15, September 15 and
December 15 of each year, and (ii) at any other time within thirty (30)
days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than fifteen (15) days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
Guarantor shall not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of
Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
Section 2.3 Reports by the Preferred Guarantee Trustee. On or before
April 30 of each year, commencing April 30, 2003, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
Section 2.4 Periodic Reports to the Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) 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 Preferred Guarantee Trustee such evidence of
6
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) 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 Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences to the extent set forth in the Indenture. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 2.7 Event of Default; Notice.
-------------------------
(a) The Preferred Guarantee Trustee shall, within ninety (90)
days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Preferred
Securities, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such
defaults have been cured before the giving of such notice; provided,
that the Preferred Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible
Officer of the Preferred Guarantee Trustee charged with the
administration of the Trust Agreement shall have obtained actual
knowledge of such Event of Default.
Section 2.8 Conflicting Interests. The Trust Agreement shall be deemed
to be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS
OF THE PREFERRED GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee.
-----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and
7
the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Preferred Guarantee Trustee on acceptance by such
Successor Preferred Guarantee Trustee of its appointment to act as
Successor Preferred Guarantee Trustee. The right, title and interest of
the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred 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 Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall enforce this
Preferred Securities Guarantee for the benefit of the Holders of the
Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred
Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(d) No provision of this Preferred Securities Guarantee shall
be construed to relieve the Preferred 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
Preferred Guarantee Trustee shall be determined
solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations
shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee;
and
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(B) in the absence of bad faith on the part
of the Preferred Guarantee Trustee, the Preferred
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 Preferred Guarantee Trustee
and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be conclusively
determined by a court of competent jurisdiction that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred 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 Preferred Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
Section 3.2 Certain Rights of the Preferred Guarantee Trustee.
--------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) the Preferred 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;
9
(ii) any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Guarantee
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any
instrument (or any re-recording, refiling or registration
thereof);
(v) the Preferred Guarantee Trustee may consult with
counsel, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates. The
Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent
jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested
in it by this Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Preferred Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including reasonable
attorneys' fees and expenses and the expenses of the Preferred
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 Preferred Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Preferred Guarantee Trustee,
upon the occurrence and during the continuance of an Event of
Default, of its obligation to exercise the rights and powers
vested in it by this Preferred Securities Guarantee;
(vii) the Preferred 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,
10
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit;
(viii) the Preferred 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 Preferred Guarantee Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent, nominee, custodian or attorney
appointed with due care by it hereunder;
(ix) no third party shall be required to inquire as
to the authority of the Preferred Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions
of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or
its agent's taking such action; and
(x) whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall
deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action
hereunder, the Preferred Guarantee Trustee (A) may request
instructions from the Holders of a Majority in Liquidation
Amount of the Preferred Securities, (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 conclusively relying on or acting in accordance
with such instructions.
(b) No provision of this Preferred Securities Guarantee shall
be deemed to impose any duty or obligation on the Preferred 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 Preferred 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
Preferred Guarantee Trustee shall be construed to be a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Guarantee. The
Recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
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ARTICLE IV
THE PREFERRED GUARANTEE TRUSTEE
Section 4.1 The Preferred Guarantee Trustee; Eligibility.
---------------------------------------------
(a) There shall at all times be a Preferred 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 or any state or
territory thereof or of the District of Columbia, or
a corporation or Person permitted by the Securities
and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least
$5,000,000, and subject to supervision or examination
by federal, state, territorial or District of
Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to
law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and the 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 Preferred
-----------------------------------------------------
Guarantee Trustee.
------------------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have
been appointed or until its removal or resignation. The Preferred
Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the
Preferred Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee
Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2
within sixty (60) days after delivery to the Guarantor of an instrument
of resignation, the resigning Preferred Guarantee Trustee may petition
any court of competent jurisdiction for appointment of a Successor
Preferred Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Preferred Guarantee
Trustee all fees and expenses accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full on a subordinated basis as set forth in Section 6.2 hereof
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Trust), as and when due, regardless of
any defense, right of set-off or counterclaim that the 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 Trust to pay such amounts to the
Holders. The Guarantor shall give prompt notice to the Preferred Guarantee
Trustee if it makes any direct payment hereunder.
Section 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a
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proceeding first against the Trust or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 5.3 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) any failure or omission to receive any regulatory approval
or consent required in connection with the Preferred Securities (or the
common equity securities issued by the Trust), including the failure to
receive any regulatory approval required for the redemption of the
Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this
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Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4 Rights of the Holders.
----------------------
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities have the right to direct the time, method and
place of conducting of any proceeding for any remedy available to the
Preferred Guarantee Trustee in respect of this Preferred Securities
Guarantee or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee.
(b) Any Holder of Preferred Securities may institute and
prosecute a legal proceeding directly against the Guarantor to enforce
its rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred
Guarantee Trustee or any other Person.
Section 5.5 Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection.
Section 5.6 Subrogation. The Guarantor shall be subrogated to all
rights (if any) of the Holders of the Preferred Securities against the Trust in
respect of any amounts paid to such Holders by the Guarantor under this
Preferred Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
Section 5.7 Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (h), inclusive, of Section 5.3
hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation on Transactions. So long as any of the Preferred
Securities remain outstanding, if any of the circumstances described in Section
5.6 of the Indenture shall have occurred, then (a) neither the Guarantor nor any
of its Subsidiaries (as defined in the Indenture) shall declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
other than (i) dividends or distributions in common stock of the Guarantor or
any declaration of a non-cash dividend in connection with the implementation of
a shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(ii) purchases of common stock of the Guarantor related to the rights under any
of the Guarantor's benefit plans for its directors, officers or employees, (iii)
as a result of a reclassification of its capital stock, (iv) dividends or
distributions made by a Subsidiary to the Guarantor, or (v) dividends or
distributions made by a Subsidiary to a Subsidiary, and (b) neither the
Guarantor nor any Subsidiary shall make any payment of principal or interest on
or repay, repurchase or redeem any debt securities issued by the Guarantor or
any Subsidiary which rank pari passu with or junior to the Debentures or make
any guarantee payments with respect to any guarantee by the Guarantor of any
debt securities if such guarantee ranks pari passu or junior in interest to the
Debentures, other than payments under this Preferred Securities Guarantee.
Section 6.2 Ranking. This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (a)
subordinate and junior in right of payment to all Senior Debt, Subordinated Debt
and Additional Senior Obligations (as each such term is defined in the
Indenture) of the Guarantor, (b) pari passu with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred securities or
preference stock of any Affiliate of the Guarantor and (c) senior to the most
senior preferred securities or preference stock now or hereafter issued by the
Guarantor and senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Preferred Securities Guarantee shall
terminate upon (a) full payment of the Redemption Price of all the Preferred
Securities, (b) full payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of the Trust, or (c) distribution of the Debentures
to the Holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation.
------------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith
in accordance with this Preferred Securities Guarantee and in a manner
that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Preferred
Securities Guarantee or by law, except that an Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor
by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the
Guarantor, including information, opinions, reports or statements as to
the value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets from
which Distributions to the Holders of the Preferred Securities might
properly be paid.
Section 8.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee or the earlier resignation or removal of the
Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders
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of the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted by
Article XII of the Indenture and pursuant to which the assignee agrees in
writing to perform Guarantor's obligations hereunder, the Guarantor shall not
assign its obligations hereunder.
Section 9.2 Amendments. Except with respect to any changes that do not
materially adversely affect the rights of the Holders (in which case no consent
of the Holders will be required), this Preferred Securities Guarantee may only
be amended by the Guarantor and the Preferred Guarantee Trustee with the prior
approval of the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Article VI of the Trust Agreement with
respect to meetings of the Holders of the Preferred Securities apply to the
giving of such approval.
Section 9.3 Notices. All notices provided for in this Preferred
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by registered or certified
mail, with return receipt requested or by reputable overnight courier with
confirmation of receipt, as follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such
other address as the Preferred Guarantee Trustee may give notice of to
the Holders of the Preferred Securities): Christiana Bank & Trust
Company, 0000 Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attention: Corporate
Trust Administration.
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Preferred Securities): National
Penn Bancshares, Inc., Philadelphia and Xxxxxxx Xxxxxxx, Xxxxxxxxx, XX
00000, Attention: Corporate Secretary.
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given, for all purposes,
if given or served by U.S. mail, first class postage prepaid with return receipt
requested or by reputable overnight courier with confirmation of receipt, 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 9.4 Benefit. This Preferred Securities Guarantee is solely for
the benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
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Section 9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
Section 9.6 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 of such counterparts shall together constitute but one and the same
instrument.
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This Preferred Securities Guarantee is executed as of the day and year first
above written.
NATIONAL PENN BANCSHARES, INC.,
as Guarantor
By:_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
CHRISTIANA BANK & TRUST COMPANY,
as Preferred Guarantee Trustee
By:_________________________________
Name:
Title:
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