EXHIBIT 4.7
================================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
OLD SECOND BANCORP, INC.
AND
WILMINGTON TRUST COMPANY
Dated as of ________________, 2003
================================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION......................................................1
Section 1.1. Definitions and Interpretation......................................................1
ARTICLE II TRUST INDENTURE ACT.................................................................5
Section 2.1. Trust Indenture Act; Application....................................................5
Section 2.2. The List of Holders of the Securities...............................................5
Section 2.3. Reports by the Preferred Guarantee Trustee..........................................5
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...........................................................6
Section 2.7. Event of Default; Notice............................................................6
Section 2.8. Conflicting Interests...............................................................6
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE PREFERRED
GUARANTEE TRUSTEE...................................................................7
Section 3.1. Powers and Duties of the Preferred Guarantee Trustee................................7
Section 3.2. Certain Rights of the Preferred Guarantee Trustee...................................8
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee..............................10
ARTICLE IV THE PREFERRED GUARANTEE TRUSTEE....................................................10
Section 4.1. The Preferred Guarantee Trustee; Eligibility.......................................10
Section 4.2. Appointment, Removal and Resignation of the Preferred
Guarantee Trustee...............................................................11
ARTICLE V GUARANTEE..........................................................................12
Section 5.1. Guarantee..........................................................................12
Section 5.2. Waiver of Notice and Demand........................................................12
Section 5.3. Obligations not Affected...........................................................12
Section 5.4. Rights of the Holders..............................................................13
Section 5.5. Guarantee of Payment...............................................................13
Section 5.6. Subrogation........................................................................13
Section 5.7. Independent Obligations............................................................14
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION..........................................14
Section 6.1. Limitation on Transactions.........................................................14
Section 6.2. Ranking............................................................................14
ARTICLE VII TERMINATION .......................................................................14
Section 7.1. Termination........................................................................14
ARTICLE VIII INDEMNIFICATION....................................................................15
Section 8.1. Exculpation........................................................................15
Section 8.2. Indemnification....................................................................15
ARTICLE IX MISCELLANEOUS......................................................................15
Section 9.1. Successors and Assigns.............................................................15
Section 9.2. Amendments.........................................................................16
Section 9.3. Notices............................................................................16
Section 9.4. Benefit............................................................................16
Section 9.5. Governing Law......................................................................16
-ii-
CROSS-REFERENCE TABLE
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
310(a)....................................................................4.1(a)
310(b)...............................................................4.1(c), 2.8
310(c)............................................................Not Applicable
311(a)....................................................................2.2(b)
311(b)....................................................................2.2(b)
311(c)............................................................Not Applicable
312(a)................................................................... 2.2(a)
312(b)................................................................... 2.2(b)
313......................................................................... 2.3
314(a).......................................................................2.4
314(b)............................................................Not Applicable
314(c).......................................................................2.5
314(d)............................................................Not Applicable
314(e)..............................................................1.1, 2.5,3.2
314(f)..................................................................2.1, 3.2
315(a)....................................................................3.1(d)
315(b).......................................................................2.7
315(c).......................................................................3.1
315(d)....................................................................3.1(d)
316(a).............................................................1.1, 2.6, 5.4
316(b).......................................................................5.3
317(a).......................................................................3.1
317(b)............................................................Not Applicable
318(a)....................................................................2.1(a)
318(b).......................................................................2.1
318(c)....................................................................2.1(b)
Note: This Cross-Reference Table does not constitute part of this Agreement and
shall not affect the interpretation of any of its terms or provisions.
-iii
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS
PREFERRED SECURITIES GUARANTEE AGREEMENT (this "PREFERRED SECURITIES
GUARANTEE"), dated as of __________, 2003, is executed and delivered by OLD
SECOND BANCORP, INC., a Delaware corporation (the "GUARANTOR"), and WILMINGTON
TRUST COMPANY, a trust company organized and existing under the laws 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 OLD SECOND CAPITAL TRUST I, a Delaware statutory trust
(the "TRUST").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "TRUST
AGREEMENT"), dated as of ____________, 2003, 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 2,500,000 preferred securities, having an aggregate
liquidation amount of $25,000,000 designated the _____% Cumulative Trust
Preferred Securities (the "PREFERRED SECURITIES");
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
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 from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless otherwise defined
in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday, Sunday, a day on which
federal or state banking institutions in the Borough of Manhattan, The City of
New York are authorized or required by law, executive order or regulation to
close or a day on which the Corporate Trust Office of the Preferred Guarantee
Trustee is closed for business.
"CORPORATE TRUST OFFICE" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Preferred Securities Guarantee is located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DEBENTURES" means the ____% Subordinated Debentures due _____________,
2033, of the Debenture Issuer held by the Property Trustee of the Trust.
"DEBENTURE ISSUER" means Old Second Bancorp, Inc. issuer of the Debentures
under the Indenture.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Trust: (i) any accrued and unpaid Distributions that are required to
be paid on such Preferred Securities, to the extent the Trust shall have funds
available therefor, (ii) the redemption price, including all
-2-
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 Old Second Bancorp, Inc., a Delaware 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.
"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 ____________, 2003, among the
Debenture Issuer and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee of the Trust.
"LIQUIDATION AMOUNT" means the stated value of $10 per Preferred Security.
"LIQUIDATION DISTRIBUTION" has the meaning provided therefor in the
definition of Guarantee Payments.
"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 value
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 principal executive officer, principal financial officer, principal
accounting officer, treasurer or any vice president of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee shall include:
-3-
(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 a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PREFERRED GUARANTEE TRUSTEE" means Wilmington 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 of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"REDEMPTION PRICE" has the meaning provided therefor in the definition of
Guarantee Payments.
"RESPONSIBLE OFFICER" means, with respect to the 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, any assistant secretary, the treasurer, any assistant treasurer
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).
-4-
"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.
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
three Business Days after March 15, June 15, September 15 and December 15 in
each year, and (ii) at any other time within 30 days of receipt by the Guarantor
of a written request for a List of Holders as of a date no more than 15 days
before such List of Holders is given to the 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
August 15 of each year, commencing August 15, 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
-5-
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
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. 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 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, except in the case of a default by
Guarantor under the terms of this Preferred Securities Guarantee on any of its
payment obligations, 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 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
-6-
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
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the 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
(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;
-7-
(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 proved 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;
(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
rerecording, refiling or reregistration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal matters
shall be full and complete
-8-
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The 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,
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 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;
(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.
-9-
(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.
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 Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its 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 Person 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.
-10-
(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.
(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 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 to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Trust may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.
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 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.
-11-
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
or any extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) any failure or omission to receive any regulatory approval or
consent required in connection with the Preferred Securities (or the common
equity securities issued by the Trust), including the failure to receive
any approval of the Board of Governors of the Federal Reserve System
required for the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
-12-
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 and prosecuting 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 (if any)
rights 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.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION ON TRANSACTIONS. So long as any of the Preferred
Securities remain outstanding, if there shall have occurred and Event of Default
under this
Preferred Securities Guarantee Agreement, an event of default under
the Trust Agreement or during an Extension Period (as defined in the Indenture),
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 except as permitted in such circumstances
by the Indenture, (b) the Guarantor shall not make any payment of principal or
interest on or repay, repurchase or redeem any debt securities issued by the
Guarantor which rank PARI PASSU with or junior to the Debentures other than
payments under this Preferred Securities Guarantee, and (c) the Guarantor
-13-
shall not redeem, purchase or acquire less than all of the Outstanding
Debentures or any of the Preferred Securities.
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 defined in the Indenture) of the Guarantor, (b) PARI
PASSU with the most senior preferred securities now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred securities of any Affiliate of the Guarantor, and
(c) 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.
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.
-14-
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.
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 of the Preferred Securities then
outstanding.
SECTION 9.2. AMENDMENTS. Except with respect to any changes that do not
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 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, 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):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
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):
-00-
Xxx Xxxxxx Bancorp, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
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.
SECTION 9.5. GOVERNING LAW. This Preferred Securities Guarantee shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of
Illinois.
This Preferred Securities Guarantee is
executed as of the day and year first
above written.
OLD SECOND BANCORP, INC., as Guarantor
By: -------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
WILMINGTON TRUST COMPANY, as Preferred
Guarantee Trustee
By: -------------------------------------
Name:
-------------------------------
Title:
------------------------------
-16-
