Exhibit 10.12
===========================================================================
GUARANTEE AGREEMENT
between
MYSTIC FINANCIAL, INC.,
as Guarantor,
and
THE BANK OF NEW YORK,
as Guarantee Trustee
Dated as of February 14, 2003
MYSTIC FINANCIAL CAPITAL TRUST II
===========================================================================
TABLE OF CONTENTS
ARTICLE I Interpretation and Definitions 2
Section 1.1. Interpretation 2
Section 1.2. Definitions 2
ARTICLE II Reports 6
Section 2.1. List of Holders 6
Section 2.2. Periodic Reports to the Guarantee Trustee 6
Section 2.3. Event of Default; Waiver 6
Section 2.4. Event of Default; Notice 6
ARTICLE III Powers, Duties and Rights of the
Guarantee Trustee 7
Section 3.1. Powers and Duties of the Guarantee Trustee 7
Section 3.2. Certain Rights of the Guarantee Trustee 8
Section 3.3. Compensation 9
Section 3.4 Indemnity 10
Section 3.5. Securities 10
ARTICLE IV Guarantee Trustee 10
Section 4.1. Guarantee Trustee; Eligibility 10
Section 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee 11
ARTICLE V Guarantee 11
Section 5.1. Guarantee 11
Section 5.2. Waiver of Notice and Demand 12
Section 5.3. Obligations Not Affected 12
Section 5.4. Rights of Holders 13
Section 5.5. Guarantee of Payment 13
Section 5.6. Subrogation 13
Section 5.7. Independent Obligations 13
Section 5.8. Enforcement 14
ARTICLE VI Covenants and Subordination 14
Section 6.1. Dividends, Distributions and Payments 14
Section 6.2. Subordination 15
Section 6.3. Pari Passu Guarantees 15
ARTICLE VII Termination 15
Section 7.1. Termination 15
ARTICLE VIII Miscellaneous 16
Section 8.1. Successors and Assigns 16
i
Section 8.2. Amendments 16
Section 8.3. Notices 16
Section 8.4. Benefit 17
Section 8.5. Governing Law 17
Section 8.6. Submission to Jurisdiction 17
Section 8.7. Counterparts 18
ii
Guarantee Agreement, dated as of February 14, 2003, executed and
delivered by Mystic Financial, Inc., a Delaware corporation (the
"Guarantor") having its principal office at 00 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, the "Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of Mystic Financial Capital Trust
II, a Delaware statutory trust (the "Issuer").
W i t n e s s e t h :
Whereas, pursuant to an Amended and Restated Trust Agreement, dated
as of the date hereof (the "Trust Agreement"), among the Guarantor, as
Depositor, the Property Trustee, the Delaware Trustee and the
Administrative Trustees named therein and the holders from time to time of
the Preferred Securities (as hereinafter defined), the Issuer is issuing
$7,000,000 aggregate Liquidation Amount (as defined in the Trust Agreement)
of its Floating Rate Preferred Securities (Liquidation Amount $1,000 per
preferred security) (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Issuer and having the
terms set forth in the Trust Agreement;
Whereas, the Preferred Securities will be issued by the Issuer and
the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Notes (as defined in the Trust Agreement) of the Guarantor; and
Whereas, as incentive for the Holders to purchase Preferred
Securities the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth herein, 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 Guarantee
Agreement to provide as follows for the benefit of the Holders from time to
time of the Preferred Securities:
ARTICLE I
Interpretation and Definitions
SECTION 1.1. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings
assigned to them in Section 1.2;
(b) he words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) the words "hereby", "herein", "hereof" and "hereunder"
and other words of similar import refer to this Guarantee Agreement
as a whole and not to any particular Article, Section or other
subdivision;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 1.2. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person; provided, that
the Issuer shall not be deemed to be an Affiliate of the Guarantor.
For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Beneficiaries" means any Person to whom the Issuer is or
hereafter becomes indebted or liable.
2
"Board of Directors" means either the board of directors of the
Guarantor or any duly authorized committee of that board.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Debt" means with respect to any Person, whether recourse is to
all or a portion of the assets of such Person, whether currently
existing or hereafter incurred, and whether or not contingent and
without duplication, (i) every obligation of such Person for money
borrowed; (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every
obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable
arising in the ordinary course of business); (v) every capital lease
obligation of such Person; (vi) all indebtedness of such Person,
whether incurred on or prior to the date of this Guarantee Agreement
or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward
contracts, options, swaps and similar arrangements; (vii) every
obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of
which, in either case, such Person has guaranteed or is responsible
or liable for, directly or indirectly, as obligor or otherwise; and
(viii) any renewals, extensions, refundings, amendments or
modifications of any obligation of the type referred to in clauses
(i) through (vii).
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement;
provided, that except with respect to a default in payment of any
Guarantee Payments, the Guarantor shall have received notice of
default from the Guarantee Trustee and shall not have cured such
default within thirty (30) days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions (as defined in
the Trust Agreement) required to be paid on the Preferred Securities,
to the extent the Issuer shall have funds on hand available therefor
at such time, (ii) the Redemption Price with respect to any Preferred
Securities to the extent the Issuer shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding up or liquidation of the Issuer,
unless Notes are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount of $1,000 per Preferred Security
plus accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent that the Issuer shall have
funds available therefor at such time and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to
creditors of the Issuer in accordance with applicable law (in either
case, the "Liquidation Distribution").
3
"Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee, as defined below, has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee
Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, that,
in determining whether the holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor, the
Guarantee Trustee or any Affiliate of the Guarantor or the Guarantee
Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as
of the date hereof, as supplemented and amended, between the
Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 2.1.
"Majority in Liquidation Amount of the Preferred Securities"
means a vote by the Holder(s), voting separately as a class, of more
than fifty percent (50%) of the aggregate Liquidation Amount of all
then outstanding Preferred Securities issued by the Issuer.
"Obligations" means any costs, expenses or liabilities (but not
including liabilities related to taxes) of the Issuer, other than
obligations of the Issuer to pay to holders of any Trust Securities
the amounts due such holders pursuant to the terms of the Trust
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, Chief Financial
Officer, President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee.
Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement (other
than the certificate provided pursuant to Section 2.4) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each officer has made such examination
or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
officer, such condition or covenant has been complied with.
4
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, government or any agency or political subdivision
thereof or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, any Trust Officer or Assistant
Trust Officer or any other officer of the Corporate Trust Department
of the Guarantee Trustee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with
the particular subject.
"Senior Debt" means the principal of and any premium and
interest on (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the
Guarantor whether or not such claim for post-petition interest is
allowed in such proceeding) all Debt of the Guarantor, whether
incurred on or prior to the date of the Indenture or thereafter
incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding,
that such obligations are not superior in right of payment to the
Preferred Securities; provided, however, that if the Guarantor is
subject to the regulation and supervision of an "appropriate Federal
banking agency" within the meaning of 12 U.S.C. 1813(q), the
Guarantor shall have received the approval of such appropriate
Federal banking agency prior to issuing any such obligation;
provided further, that Senior Debt shall not include any other debt
securities, and guarantees in respect of such debt securities, issued
to any trust other than the Issuer (or a trustee of such trust),
partnership or other entity affiliated with the Guarantor that is a
financing vehicle of the Guarantor (a "financing entity"), in
connection with the issuance by such financing entity of equity
securities or other securities that are treated as equity capital for
regulatory capital purposes guaranteed by the Guarantor pursuant to
an instrument that ranks pari passu with or junior in right of
payment to this Guarantee Agreement, including, without limitation,
securities issued by Mystic Financial Capital Trust I.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended and as in effect on the date of this Guarantee Agreement.
Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust
Agreement as in effect on the date hereof.
5
ARTICLE II
Reports
SECTION 2.1. List of Holders.
The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee at such times as the Guarantee Trustee may request in writing,
within thirty (30) days after the receipt by the Guarantor of any such
request, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders (the "List of Holders")
as of a date not more than fifteen (15) days prior to the time such list is
furnished, in each case to the extent such information is in the possession
or control of the Guarantor and is not identical to a previously supplied
list of Holders or has not otherwise been received by the Guarantee Trustee
in its capacity as such. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
SECTION 2.2. Periodic Reports to the Guarantee Trustee.
The Guarantor shall deliver to the Guarantee Trustee, within one
hundred and twenty (120) days after the end of each fiscal year of the
Guarantor ending after the date of this Guarantee Agreement, an Officers'
Certificate covering the preceding fiscal year, stating whether or not to
the knowledge of the signers thereof the Guarantor is in default in the
performance or observance of any of the terms or provisions or any of the
conditions of this Guarantee Agreement (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Guarantor
shall be in default thereof, specifying all such defaults and the nature
and status thereof of which they have knowledge.
SECTION 2.3. Event of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders, waive any past Event of Default
and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
SECTION 2.4. Event of Default; Notice.
(a) The Guarantee Trustee shall, within ninety (90) days after the
occurrence of a default, transmit to the Holders notices of all defaults
actually known to the Guarantee Trustee, unless such defaults have been
cured or waived before the giving of such notice, provided, that, except in
the case of a default in the payment of a Guarantee Payment, the Guarantee
Trustee shall be protected in withholding such notice if and so long as the
Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good
faith determine that the withholding of such notice is in the interests of
the Holders. For the purpose of this Section 2.4, the term "default" means
any event that is, or after notice or lapse of time or both would become,
an Event of Default.
6
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration of
this Guarantee Agreement shall have obtained written notice, of such Event
of Default from the Guarantor or a Holder.
ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising
its rights pursuant to Section 5.4(d) or to a Successor Guarantee Trustee
upon acceptance by such Successor Guarantee Trustee of its appointment to
act as Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) The rights, immunities, duties and responsibilities of the
Guarantee Trustee shall be as provided by this Guarantee Agreement and
there shall be no other duties or obligations, express or implied, of the
Guarantee Trustee. Notwithstanding the foregoing, no provisions of this
Guarantee Agreement shall require the Guarantee Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not herein expressly so provided,
every provision of this Guarantee Agreement relating to the conduct or
affecting the liability of or affording protection to the Guarantee Trustee
shall be subject to the provisions of this Section 3.1. To the extent
that, at law or in equity, the Guarantee Trustee has duties and liabilities
relating to the Guarantor or the Holders, the Guarantee Trustee shall not
be liable to any Holder for the Guarantee Trustee's good faith reliance on
the provisions of this Guarantee Agreement. The provisions of this
Guarantee Agreement, to the extent that they restrict the duties and
liabilities of the Guarantee Trustee otherwise existing at law or in
equity, are agreed by the Guarantor and the Holders to replace such other
duties and liabilities of the Guarantee Trustee.
(c) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
negligent failure to act or own willful misconduct, except that:
(i) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made; and
7
(ii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Preferred Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee
Agreement.
SECTION 3.2. Certain Rights of the Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting in good faith and
in accordance with the terms hereof upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein;
(iii) the Guarantee Trustee may consult with counsel, and the
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in reliance thereon and in
accordance with such advice. Such counsel may be counsel to the
Guarantee Trustee, the Guarantor or any of its Affiliates and may be
one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee reasonable
security or indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Guarantee Trustee; provided, that, nothing contained in this Section
3.2(a)(iv) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement;
(v) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee,
in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and if the Guarantee
Trustee shall determine to make such inquiry or investigation, it
8
shall be entitled to examine the books, records and premises of the
Guarantor, personally or by agent or attorney;
(vi) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through its agents, attorneys, custodians or nominees and the
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(vii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right hereunder,
the 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 acting in accordance with such instructions;
(viii) except as otherwise expressly provided by this Guarantee
Agreement, the Guarantee Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Guarantee Agreement; and
(ix) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting
to take any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee Trustee, shall
be promptly delivered by the Guarantor.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a duty to act
in accordance with such power and authority.
SECTION 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to
time reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provisions of law in regard
to the compensation of a trustee of an express trust) and to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements
and advances (including the reasonable fees and expenses of its attorneys
and agents) incurred or made by the Guarantee Trustee in accordance with
any provisions of this Guarantee Agreement.
9
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify and hold harmless the Guarantee
Trustee and any of its Affiliates and any of their officers, directors,
shareholders, employees, representatives or agents from and against any
loss, damage, liability, tax (other than income, franchise or other taxes
imposed on amounts paid pursuant to Section 3.3), penalty, expense or claim
of any kind or nature whatsoever incurred without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under
this Guarantee Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Guarantee Trustee.
In no event shall the Guarantee Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Guarantee Trustee
has been advised of the likelihood of such loss or damage and regardless of
the form of action.
In no event shall the Guarantee Trustee be liable for any failure or
delay in the performance of its obligations hereunder because of
circumstances beyond its control, including, but not limited to, acts of
God, flood, war (declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations,
governmental action or the like which delay, restrict or prohibit the
providing of the services contemplated by this Guarantee Agreement.
SECTION 3.5. Securities.
The Guarantee Trustee or any other agent of the Guarantee Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Common or Preferred Securities.
ARTICLE IV
Guarantee Trustee
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States or of any State thereof, authorized to
exercise corporate trust powers, having a combined capital and
surplus of at least fifty million dollars ($50,000,000), subject to
supervision or examination by Federal or State authority and having
an office within the United States. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining
10
authority, then, for the purposes of this Section 4.1, the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee shall either eliminate such interest or resign in the
manner and with the effect set out in Section 4.2(c).
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor, except
during an Event of Default.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within thirty (30)
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor,
any court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.
ARTICLE V
Guarantee
SECTION 5.1. Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense (except for the defense of payment by the
Issuer), right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required
11
amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders. The Guarantor shall give prompt written
notice to the Guarantee Trustee in the event it makes any direct payment to
the Holders hereunder.
(b) The Guarantor hereby also agrees to assume any and all
Obligations of the Issuer, and, in the event any such Obligation is not so
assumed, subject to the terms and conditions hereof, the Guarantor hereby
irrevocably and unconditionally guarantees to each Beneficiary the full
payment, when and as due, of any and all Obligations to such Beneficiaries.
This Guarantee is intended to be for the Beneficiaries who have received
notice hereof.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Guarantee Trustee, Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Notes as provided in the
Indenture), 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;
(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
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
12
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (a) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (b) the Guarantee Trustee has the right to enforce
this Guarantee Agreement on behalf of the Holders; (c) the Holders of a
Majority in Liquidation Amount of the Preferred Securities have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and (d) any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Guarantee Agreement, without first instituting a legal proceeding
against the Guarantee Trustee, the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon distribution of Notes to Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement and shall have the right to
waive payment by the Issuer pursuant to Section 5.1; provided, that, the
Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at the
time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be
13
liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3.
SECTION 5.8. Enforcement.
A Beneficiary may enforce the Obligations of the Guarantor contained
in Section 5.1(b) directly against the Guarantor, and the Guarantor waives
any right or remedy to require that any action be brought against the
Issuer or any other person or entity before proceeding against the
Guarantor.
ARTICLE VI
Covenants and Subordination
SECTION 6.1. Dividends, Distributions and Payments.
So long as any Preferred Securities remain outstanding, if there
shall have occurred and be continuing an Event of Default or the Guarantor
shall have entered into an Extension Period as provided for in the
Indenture and such period, or any extension thereof, shall have commenced
and be continuing, then the Guarantor may not (a) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make
liquidation payment with respect to, any of the Guarantor's capital stock
or (b) make any payment of principal of or any interest or premium on or
repay, repurchase or redeem any debt securities of the Guarantor that rank
pari passu in all respects with or junior in interest to the Preferred
Securities (other than (i) repurchases, redemptions or other acquisitions
of shares of capital stock of the Guarantor in connection with any
employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or stockholder
stock purchase plan or in connection with the issuance of capital stock of
the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the occurrence of such Event of Default or the applicable
Extension Period, (ii) as a result of an exchange or conversion of any
class or series of the Guarantor's capital stock (or any capital stock of a
subsidiary of the Guarantor) for any class or series of the Guarantor's
capital stock or any class of series of the Guarantor's indebtedness for
any class or series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to
the conversions or exchange provisions of such capital stock or the
security being converted or exchanged, (iv) any declaration of a dividend
in connection with any rights plan, the issuance of rights, stock or other
property under any rights plan or the redemption or repurchase of rights
pursuant thereto, or (v) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior
to such stock).
14
SECTION 6.2. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate
and junior in right of payment to all Senior Debt of the Guarantor.
SECTION 6.3. Pari Passu Guarantees.
(a) The obligations of the Guarantor under this Guarantee Agreement
shall rank pari passu with the obligations of the Guarantor under any
similar guarantee agreements issued by the Guarantor with respect to
preferred securities (if any) similar to the Preferred Securities, issued
by trusts other than the Issuer established or to be established by the
Guarantor (if any), in each case similar to the Issuer, including, without
limitation, the Guarantee Agreement, dated April 10, 2002 issued by the
Guarantor with respect to the preferred securities issued by Mystic
Financial Capital Trust I.
(b) The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation
or reorganization or otherwise is subject to the prior claims of creditors
of that subsidiary, except to the extent the Guarantor may itself be
recognized as a creditor of that subsidiary. Accordingly, the Guarantor's
obligations under this Guarantee will be effectively subordinated to all
existing and future liabilities of the Guarantor's subsidiaries, and
claimants should look only to the assets of the Guarantor for payments
thereunder. This Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Guarantor, including Senior Debt of
the Guarantor, under any indenture or agreement that the Guarantor may
enter into in the future or otherwise.
ARTICLE VII
Termination
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (a) full payment of the Redemption Price of all Preferred
Securities, (b) the distribution of Notes to the Holders in exchange for
all of the Preferred Securities or (c) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred
Securities or this Guarantee Agreement. The obligations of the Guarantor
under Sections 3.3 and 3.4 shall survive any such termination or the
resignation and removal of the Guarantee Trustee.
15
ARTICLE VIII
Miscellaneous
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives
of the Guarantor and shall inure to the benefit of the Holders of the
Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted
under Article VIII of the Indenture and pursuant to which the successor or
assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its rights or delegate its
obligations hereunder without the prior approval of the Holders of a
Majority in Liquidation Amount of the Preferred Securities.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of
the Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Guarantor, the Guarantee Trustee and the
Holders of not less than a Majority in Liquidation Amount of the Preferred
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings or consents of the Holders shall apply to the giving of such
approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to
be given hereunder shall be in writing, duly signed by the party giving
such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address or facsimile
number set forth below or such other address, facsimile number or to
the attention of such other Person as the Guarantor may give notice
to the Guarantee Trustee and the Holders:
Mystic Financial, Inc.
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
16
(b) if given to the Issuer, at the Issuer's address or
facsimile number set forth below or such other address, facsimile
number or to the attention of such other Person as the Issuer may
give notice to the Guarantee Trustee and the Holders:
Mystic Financial Capital Trust II
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
(c) if given to the Guarantee Trustee, at the address or
facsimile number set forth below or such other address, facsimile
number or to the attention of such other Person as the Guarantee
Trustee may give notice to the Guarantor and the Holders:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.
SECTION 8.5. Governing Law.
This Guarantee Agreement and the rights and obligations of each party
hereto, shall be construed and enforced in accordance with and governed by
the laws of the State of New York without reference to its conflict of laws
provisions (other than Section 5-1401 of the General Obligations Law).
SECTION 8.6. Submission to Jurisdiction.
ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT IN OR
REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF
NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF
NEW YORK (IN EACH CASE SITTING IN THE
00
XXXXXXX XX XXXXXXXXX). BY EXECUTION AND DELIVERY OF THIS GUARANTEE
AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS
(AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS GUARANTEE AGREEMENT.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
18
In Witness Whereof, the undersigned have executed this Guarantee
Agreement as of the date first above written.
MYSTIC FINANCIAL, INC.
By:
--------------------------------
Name
Title:
THE BANK OF NEW YORK, not in its
individual capacity, but solely as
Guarantee Trustee
By:
--------------------------------
Name
Title:
