Exhibit 4.6
-----------
Form of Guarantee Agreement for New South Capital Trust I
========================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
New South Bancshares, Inc.
Dated as of __________, 1998
========================================
1
TABLE OF CONTENTS
-----------------
[Table of Contents Omitted]
2
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of __________, 1998, is executed and delivered by New South Bancshares, Inc.,
a Delaware corporation (the "Guarantor"), and Bankers Trust Company as trustee
(the "Preferred Securities Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Preferred Securities (as defined
herein) of New South Capital Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 1998, among the trustees of the
Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer (i) is
issuing on the date hereof __________ preferred securities, having an aggregate
liquidation amount of $30,000,000, such preferred securities being designated
the _____% Preferred Securities (collectively 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 below).
The Guarantor agrees to make certain other payments on the terms and conditions
set forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Preferred Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Trust Agreement) has occurred and is continuing, the rights
of holders of the Common Securities to receive Guarantee Payments under the
Common Securities Guarantee are subordinated, to the extent and in the manner
set forth in the Common Securities Guarantee, to the rights of holders of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby acknowledges 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;
3
(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
---------
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
------------
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Securities
----------------------
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at _________________________.
"Covered Person" means any Holder or beneficial owner of Preferred
--------------
Securities.
"Debentures" means the series of subordinated debt securities of the
----------
Guarantor designated the _____% Junior Subordinated Deferrable Interest
Debentures due __________ held by the Property Trustee (as defined in the Trust
Agreement) of the Issuer.
"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 Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds on hand legally available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds on hand legally available therefor at such time, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary termination and liquidation of the Issuer
(other than in connection with the distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer. If an Event of Default has occurred and is
continuing, no Guarantee Payments under the Common Securities Guarantee with
respect to the Common Securities or any guarantee payment under any Other Common
Securities Guarantees shall be made until the Holders of Preferred Securities
shall be paid in full the Guarantee Payments to which they are entitled under
this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of
4
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indemnified Person" means the Preferred Securities Guarantee Trustee,
------------------
any Affiliate of the Preferred Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of __________, 1998, among
---------
the Guarantor (the "Debenture Issuer") and Bankers Trust Company, as trustee,
pursuant to which the Debentures are to be issued to the Property Trustee of the
Issuer.
"Majority in liquidation amount of the Preferred Securities" means,
----------------------------------------------------------
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means, with respect to any person, a
---------------------
certificate signed by two of the following: the Chairman, a Vice Chairman, the
Chief Executive Officer, the President, a Vice President, the Controller, the
Secretary, an Assistant Secretary, the Treasurer or Assistant Treasurer of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) 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
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
----------------------------------
"Other Guarantees" as the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by
----------------
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees hereafter issued by the
----------------
Guarantor with respect to preferred securities (if any) similar to the Preferred
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"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 Securities Guarantee Trustee" means Bankers Trust Company,
--------------------------------------
until a Successor Preferred Securities 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 Securities
Guarantee Trustee.
5
"Responsible Officer" means, with respect to the Preferred
-------------------
Securities Guarantee Trustee, any officer of the Preferred Securities Guarantee
Trustee, with responsibility for the administration of this Preferred Securities
Guarantee and also mean, 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.
"Successor Preferred Securities Guarantee Trustee" means a
------------------------------------------------
successor Preferred Securities Guarantee Trustee possessing the qualifications
to act as Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Securities" means the Common Securities and the Preferred
----------------
Securities.
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; and
(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 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of
such date, (i) within one Business Day after December 15 and June 15 of 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 14 days before
such List of Holders is given to the Preferred Securities 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 Securities Guarantee Trustee by the
Guarantor. The Preferred Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Securities 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 Securities Guarantee Trustee
-----------------------------------------------------
Within 60 days after [July 1] of each year, commencing [July 1],
1998, the Preferred Securities 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 Securities Guarantee Trustee shall
also comply with the requirements of section 313(d) of the Trust Indenture Act.
6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
----------------------------------------------------------
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as required by Section 314 (if
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Preferred Securities Guarantee Trustee is for informational
purposes only and the Preferred Securities Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Preferred
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Securities 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 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 Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Preferred Securities
Guarantee known to a Responsible Officer of the Preferred Securities Guarantee
Trustee, mail by first class postage prepaid, to all Holders of the Preferred
Securities, notices of all defaults actually known to a Responsible Officer of
the Preferred Securities Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of default
in the payment of any Guarantee Payment, the Preferred Securities 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 Preferred Securities 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 Securities Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Securities
Guarantee Trustee shall have received written notice, or a Responsible Officer
of the Preferred Securities 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.
7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee
---------------------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Securities 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 Securities Guarantee Trustee on acceptance by such
Successor Preferred Securities Guarantee Trustee of its appointment to act as
Successor Preferred Securities Guarantee Trustee. The right, title and interest
of the Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Securities Guarantee Trustee has occurred and is continuing,
the Preferred Securities Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Securities 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 Securities 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 Securities Guarantee Trustee,
the Preferred Securities 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 Securities 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 Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Preferred Securities Guarantee, and the Preferred Securities
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 Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Securities Guarantee Trustee, the Preferred Securities 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 Securities
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
8
Securities Guarantee Trustee, the Preferred Securities Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Preferred
Securities Guarantee;
(ii) the Preferred Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of the
Preferred Securities Guarantee Trustee, unless it shall be proved that the
Preferred Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Securities 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 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 Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Securities Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Securities 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 Securities 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 Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
--------------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Securities 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 may be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Securities Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Preferred Securities 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 Securities Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any
9
of its Affiliates and may include any of its employees. The Preferred
Securities 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 Securities 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 Securities Guarantee
Trustee such security and indemnity, reasonably satisfactory to the
Preferred Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Preferred
Securities 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 Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Preferred Securities
Guarantee Trustee, upon the occurrence 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 Securities 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 Securities
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 Securities 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 Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
(ix) Any action taken by the Preferred Securities Guarantee Trustee or
its agents hereunder shall bind the Holders of the Preferred Securities,
and the signature of the Preferred Securities Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Preferred Securities 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 Securities
Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Securities 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 Securities Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Preferred Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Preferred
Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities 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 Securities 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
10
authority available to the Preferred Securities Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Preferred Securities
----------------------------------------------------------------
Guarantee
---------
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
---------------------------------------------------
(a) There shall at all times be a Preferred Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities
and Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Preferred Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
------------------------------------------------------------
Guarantee Trustee
-----------------
(a) Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Preferred Securities Guarantee
Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold office
until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Securities
Guarantee Trustee and delivered to the Guarantor,
11
which resignation shall not take effect until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Securities Guarantee
Trustee and delivered to the Guarantor and the resigning Preferred Securities
Guarantee Trustee.
(d) If no Successor Preferred Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Preferred Securities Guarantee Trustee resigning or being removed may petition
any court of competent jurisdiction for appointment of a Successor Preferred
Securities Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Preferred Securities
Guarantee Trustee.
(e) No Preferred Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Capital securities Guarantee
Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Preferred Securities Guarantee
Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full
on a subordinated basis to the extent set forth in this Preferred Securities
Guarantee to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
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 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 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 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, 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
12
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the 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;
(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 with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of 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 any proceeding for any remedy available to the Preferred Securities
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Securities Guarantee Trustee fails to enforce
such Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Preferred Securities Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Preferred Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
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 Preferred Securities against the Issuer 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.
13
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 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 of Transactions
--------------------------
So long as any Preferred Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on, or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Debentures (other than (a) dividends or distributions in
shares of, or options, warrants, rights to subscribe for or purchase shares of,
common stock of the Guarantor, (b) any declaration of a dividend in connection
with the implementation of a stockholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Preferred Securities Guarantee,
(d) as a result of a reclassification of the Guarantor's capital stock or the
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (e) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases or issuances of common
stock in connection with any of the Guarantor's stock option, stock purchase,
stock loan or other benefit plans for its directors, officers or employees or
any of the Guarantor's dividend reinvestment plans, in each case as now existing
or hereafter established or amended), if at such time (i) there shall have
occurred any event of which the Guarantor has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would be an Event of
Default and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (ii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or (iii) the Guarantor
shall have given notice of its election of the exercise of its right to extend
the interest payment period pursuant to Section 16.01 of the Indenture and any
such extension shall be continuing.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Debt (as defined in the Indenture), to the same extent and in
the same manner that the Debentures are subordinated to Senior Debt pursuant to
the Indenture (except as indicated below), it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Preferred Securities Guarantee as if (x) such Article XV were set
forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XV, except that with respect to Section
15.03 of the Indenture only, the term "Senior Debt" shall mean all liabilities
of the Guarantor, whether or not for money borrowed (other than obligations in
respect of Other Guarantees), (ii) pari passu with any Other Guarantee (as
defined herein) and any Other Common Securities Guarantee and (iii) senior to
any obligations in respect of any class of the Guarantor's capital stock.
14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate and be of no
further force and effect (i) upon full payment of the Redemption Price (as
defined in the Trust Agreement) of all Preferred Securities, or (ii) upon
liquidation of the Issuer, the full payment of the amounts payable in accordance
with the Trust Agreement or the distribution of the Debentures to the Holders of
all of the Preferred Securities. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will 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 Holders of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim 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.
15
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 materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in liquidation amount of the
Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined). The provisions of Section 12.2 of
the Trust Agreement with respect to meetings of Holders of the 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 first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):
New South Capital Trust I
c/o New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention:
Telecopy: (205)951-
----
(b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give notice
of to the Holders of the Preferred Securities):
Bankers Trust Company
-----------------------
-----------------------
Attention:
-----------
Telecopy: ( )
--- ----------
(c) 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):
New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention:
16
Telecopy: (205) 951-
----
(d) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 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 NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
17
THIS Preferred Securities Guarantee is executed as of the day and year
first above written.
NEW SOUTH BANCSHARES, INC., as
Guarantor
By:
-----------------------------
Name:
Title:
BANKERS TRUST COMPANY, as
Preferred Securities Guarantee Trustee
By:
-----------------------------
Name:
Title:
18
