Exhibit 4.16
FORM OF
GUARANTEE AGREEMENT
between
COMMERCE BANCORP, INC.,
as Guarantor
and
THE BANK OF NEW YORK,
as Guarantee Trustee
Dated as of [ ]
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COMMERCE CAPITAL TRUST [___]
---------------------------------------
COMMERCE BANCORP, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND GUARANTEE,
DATED AS OF [____________ ]
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
----------- -------
310(a)(1) 4.1(a)
310(a)(2) 4.1(a)
310(a)(3) N/A
310(a)(4) N/A
310(a)(5) 4.1(a)
310(b) 2.8; 4.1(c)
310(c) N/A
311(a) 2.2(b)
311(b) 2.2(b)
311(b)(2) 2.2(b)
311 N/A
312(a) 2.2(a)
312(b) 2.2(b)
312(c) N/A
313(a) 2.3
313(b) 2.3
313(c) 2.3
313(d) 2.3
314(a)(1), (2) and (3) 2.4
314(a)(4) 2.4
314(b) N/A
314(c)(1) 2.5
314(c)(2) 2.5
314(c)(3) 2.5
314(d) N/A
314(e) 1.2; 2.4; 3.2
314(f) N/A
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
315(d)(1) 3.1(d)
315(d)(2) 3.1(d)
315(d)(3) 3.1(d)
315(e) N/A
316(a) 1.2; 3.1(d); 5.4(a)
316(a)(1)(A) 5.4(d)
316(a)(1)(B) 2.6
316(a)(2) N/A
316(b) 5.3
316(c) N/A
317(a)(1) 2.10(a)
317(a)(2) 2.10
317(b) N/A
318(a) 2.1(b)
THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF
THE INDENTURE.
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS AND INTERPRETATION.....................................................................1
Section 1.1. Interpretation....................................................................1
Section 1.2. Definitions.......................................................................2
ARTICLE II. TRUST INDENTURE ACT ..............................................................................4
Section 2.1. Trust Indenture Act, Application..................................................4
Section 2.2. Lists of Holders of Securities....................................................5
Section 2.3. Reports by the Guarantee Trustee..................................................5
Section 2.4. Periodic Reports to the Guarantee Trustee.........................................5
Section 2.5. Evidence of Compliance with Conditions Precedent..................................5
Section 2.6. Events of Default; Waiver.........................................................6
Section 2.7. Event of Default; Notice..........................................................6
Section 2.8. Conflicting Interests 6
Section 2.9. Disclosure of Information.........................................................7
Section 2.10. Guarantee Trustee May File Proofs of Claim.......................................7
ARTICLE III. POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE...................................................7
Section 3.1. Powers and Duties of the Guarantee Trustee........................................7
Section 3.2. Certain Rights of Guarantee Trustee...............................................8
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee............................11
ARTICLE IV . GUARANTEE TRUSTEE .............................................................................11
Section 4.1. Guarantee Trustee: Eligibility...................................................11
Section 4.2. Appointment, Removal and Resignation of Guarantee Trustee........................11
ARTICLE V. GUARANTEE .......................................................................................12
Section 5.1. Guarantee .......................................................................12
Section 5.2. Waiver of Notice and Demand......................................................13
Section 5.3. Obligations Not Affected.........................................................13
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TABLE OF CONTENTS
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Page
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Section 5.4. Rights of Holders ...............................................................14
Section 5.5. Guarantee of Payment ............................................................14
Section 5.6. Subrogation......................................................................14
Section 5.7. Independent Obligations..........................................................15
ARTICLE VI. LIMITATION OF TRANSACTIONS; SUBORDINATION........................................................15
Section 6.1. Limitation of Transactions.......................................................15
Section 6.2. Ranking .........................................................................16
ARTICLE VII. TERMINATION ...................................................................................16
Section 7.1. Termination......................................................................16
ARTICLE VIII. INDEMNIFICATION ...............................................................................17
Section 8.1. Exculpation .....................................................................17
Section 8.2. Indemnification..................................................................17
ARTICLE IX. MISCELLANEOUS ..................................................................................17
Section 9.1. Successors and Assigns...........................................................17
Section 9.2. Amendments ......................................................................18
Section 9.3. Notices .........................................................................18
Section 9.4. Benefit..........................................................................19
Section 9.5. Governing Law....................................................................19
Section 9.6. Counterparts.....................................................................19
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This GUARANTEE AGREEMENT (the "Guarantee"), dated as of [ , 200__], is
executed and delivered by Commerce Bancorp, Inc., a New Jersey corporation, as
guarantor (the "Company"), and The Bank of New York, a New York banking
corporation as trustee (the "Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Securities (as defined herein) of
Commerce Capital Trust [___], a Delaware statutory trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of [ ], among the Company, as sponsor, [ ], [ ] and [
], as the initial Administrative Trustees, The Bank of New York, as the initial
Property Trustee, and The Bank of New York (Delaware), as the initial Delaware
Trustee, the Trust is issuing on the date hereof [ ] preferred securities,
stated liquidation amount of [$ ] per preferred security, having an aggregate,
stated liquidation amount of [$ ], such preferred securities being designated
the Preferred Securities (the "Preferred Securities") and [ ] common securities,
stated liquidation amount of [$ ] per common security, having an aggregate
stated liquidation amount of [$ ], such common securities being designated the
Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Securities"); and
WHEREAS, as incentive for the Holders to purchase the Securities, the
Company desires irrevocably and unconditionally to agree, to the extent set
forth in this Guarantee, to pay in full to the Holders the Guarantee Payments
(as defined below) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Company hereby acknowledges shall benefit the Company, the Company
executes and delivers this Guarantee for the benefit of the Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.1. Interpretation
In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in Section 1.2;
(b) terms defined in the Declaration as at the date of execution of
this Guarantee have the same meaning when used in this Guarantee unless
otherwise defined in this Guarantee;
(c) a term defined anywhere in this Guarantee has the same meaning
throughout;
(d) all references to "this Guarantee" are to this Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
Section 1.2. Definitions
The following terms have the following meanings:
"Affiliate" has the meaning set forth in the Declaration.
"Business Day" has the meaning set forth in the Indenture.
"Common Securities" has the meaning set forth in the Recitals.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at the address of the Guarantee Trustee
set forth in Section 9.3.
"Covered Person" means any Holder or beneficial owner of Securities.
"Debentures" means the [___]% Junior Subordinated Debentures due [ ] to
be issued by the Company pursuant to the Indenture and to be purchased by the
Trust.
"Declaration" has the meaning set forth in the Recitals.
"Event of Default" means a failure by the Company to perform any of its
payment or other obligations under this Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid or
made by the Trust:
(i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Securities to
the extent the Trust has funds legally available therefor; the
Redemption Price (as defined in the Declaration) plus all accrued
and unpaid Distributions, to the extent the Trust has funds
legally available therefor, relating to any Securities called for
redemption by the Trust; and
(ii) upon a voluntary or involuntary dissolution, winding-up,
termination and liquidation of the Trust (other than in
connection with the distribution of Debentures to the Holders in
exchange for Securities as provided in the Declaration or the
redemption of all of the Securities), the lesser of:
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(a) the aggregate Liquidation Amount (as defined in the Declaration) of
the Securities plus all accrued and unpaid Distributions on the Securities to
the date of payment; and
(b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust.
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" has the meaning given such term in the Declaration.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
"Indenture" means the Indenture, dated as of [ ], between the
Company, as debenture issuer, and The Bank of New York, as trustee, as amended
or supplemented from time to time.
"Indenture Event of Default" means any event specified in the
Indenture.
"Majority in Liquidation Amount" has the meaning set forth in the
Declaration.
"Officers' Certificate" means, with respect to any person, a
certificate signed by any two of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Chief Financial Officer,
the Treasurer, the Chief Accounting Officer, the Secretary or an Assistant
Secretary. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee, shall include, where
applicable:
(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 such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to any other trust, partnership or other
entity affiliated with the Company that is a financing vehicle of the Company,
if any, in each case similar to the Trust.
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"Other Guarantees" means all guarantees to be issued by the Company
with respect to capital securities, if any, similar to the Securities issued by
any other trust, partnership or other entity affiliated with the Company that is
a financing vehicle of the Company, if any, in each case similar to the Trust.
"Person" has the meaning set forth in the Declaration.
"Preferred Securities" has the meaning set forth in the Recitals.
"Property Trustee" has the meaning set forth in the Declaration.
"Pro Rata" has the meaning set forth in the Declaration.
"Redemption Price" has the meaning set forth in the Declaration.
"Repurchase Price" has the meaning set forth in the Declaration.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee who shall
have direct responsibility for the administration of this Guarantee, and also
means, with respect to a particular corporate trust matter, any officer within
the Corporate Trust Office of the Guarantee Trustee to whom any corporate trust
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Securities" has the meaning set forth in the Recitals.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust" has the meaning set forth in the Recitals.
"Trust Enforcement Event" has the meaning set forth in the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time-to-time, or any successor legislation, and the rules and regulations
promulgated thereunder.
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act, Application
(a) This Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Guarantee and shall be governed, to the
extent applicable, by such provisions; and
(b) if and to the extent that any provision of this 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.
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Section 2.2. Lists of Holders of Securities
(a) The Company shall provide the Guarantee Trustee (unless the
Guarantee Trustee is otherwise the registrar of the Securities)
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of
Holders"):
(i) as of the record date relating to the payment of any
Guarantee Payment, at least 15 Business Days prior to the
date for payment of such Guarantee Payment, except while the
Preferred Securities are represented by one or more Global
Preferred Securities; and
(ii) at any other time, within 30 days of receipt by the Company
of a written request from the Guarantee Trustee for a List
of Holders as of a date no more than fifteen days before
such List of Holders is given to the Guarantee Trustee.
If at any time the List of Holders does not differ from the most recent
List of Holders provided to the Guarantee Trustee by the Company, the Company
shall not be obligated to provide such List of Holders. The Guarantee Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it; provided that the
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee
Within 60 days after May 15 of each year (commencing with the first
anniversary of the issuance of the Preferred Securities), the 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 Guarantee
Trustee shall also comply with the other requirements of Section 313 of the
Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee
The Company shall provide to the Guarantee Trustee such documents,
reports and information as are required by Section 314 of the Trust Indenture
Act, if any, and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act.
Section 2.5. Evidence of Compliance with Conditions Precedent
The Company shall provide to the Guarantee Trustee annually such
evidence of compliance with any conditions precedent provided for in this
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required
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to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture
Act may be given in the form of an Officers' Certificate.
Section 2.6. Events of Default; Waiver
(a) Except as set forth in the Declaration and the Indenture, the
Holders of a Majority in Liquidation Amount of the Securities may waive, by vote
or written consent, on behalf of all Holders, 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, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
(b) Notwithstanding the provisions of subsection (a) of this Section
2.6, the right of any Holder of Securities to receive payment of the Guarantee
Payments in accordance with this Guarantee, or to institute suit for the
enforcement of any such payment, shall not be impaired without the consent of
each such Holder.
Section 2.7. Event of Default; Notice
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default actually known to a Responsible Officer, transmit by mail,
first class postage prepaid, to all Holders, notice of such Event of Default,
unless such Event of Default has been cured before the giving of such notice;
provided that except for a default in the payment of any Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written notice
from the Company, or a Responsible Officer charged with the administration of
the Declaration shall have obtained actual knowledge, of such Event of Default.
Section 2.8. Conflicting Interests
The Declaration and the Indenture shall be deemed to be specifically
described in this Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
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Section 2.9. Disclosure of Information
The disclosure of information as to the names and addresses of the
Holders of the Securities in accordance with Section 312 of the Trust Indenture
Act, regardless of the source from which such information was derived, shall not
be deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.
Section 2.10. Guarantee Trustee May File Proofs of Claim
Upon the occurrence of an Event of Default, the Guarantee Trustee is
hereby authorized, but shall not be obligated, to:
(a) recover judgment, in its own name and as trustee of an express
trust, against the Company for the whole amount of any Guarantee Payments
remaining unpaid; and
(b) file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have its claims and those of the Holders
allowed in any judicial proceedings relative to the Company, its creditors or
its property.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee
(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee pursuant to Section 4.2. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor 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 Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer has
occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee
for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the cure or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the 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, the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this 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.
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(d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee, and no implied
covenants or obligations shall be read into this Guarantee
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
on their face to the requirements of this Guarantee;
provided, however, that in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same
only to determine whether or not on their face they conform
to the requirements of this Guarantee.
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it without negligence, in good faith
in accordance with the direction of the Holders of a Majority in
Liquidation Amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this Guarantee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers.
Section 3.2. Certain Rights of Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
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(i) the Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
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 Company contemplated by this
Guarantee may be sufficiently evidenced by an Officers'
Certificate;
(iii)whenever, in the administration of this Guarantee, the Guarantee
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may request and, in the absence of bad
faith on its part, conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Company;
(iv) the Guarantee Trustee shall have no duty to record, file or
register any instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any duty
to rerecord, refile or reregister such instrument;
(v) the Guarantee Trustee may consult with counsel or other experts
of its selection, and the advice or opinion of such counsel with
respect to legal matters or advice within the scope of such
experts' area of expertise 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 Company or any of its Affiliates and may include
any of its employees. The Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of
this Guarantee from any court of competent jurisdiction;
(vi) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including reasonable attorneys' fees and
expenses and the expenses of the 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 Guarantee Trustee;
provided that nothing contained in this Section 3.2(a)(vi) 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;
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(vii)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 at the sole cost of the Company and shall incur no liability
or additional liability of any kind by reason of such inquiry or
investigation;
(viii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys, and the
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 Guarantee Trustee or its agents hereunder
shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action, and no third party shall be required to
inquire as to the authority of the Guarantee Trustee to so act or
as to its compliance with any of the terms and provisions of this
Guarantee, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action;
(x) whenever in the administration of this Guarantee the Guarantee
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee:
(A) may request instructions from the Holders of a Majority in
Liquidation Amount of the Preferred Securities;
(B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received; and
(C) shall be protected in conclusively relying on or acting in
accordance with such instructions; and
(xi) the 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, rights or powers conferred upon it by this
Guarantee; and
(xii)the rights, privileges, protections, immunities and benefits
given to the Guarantee Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be
enforceable by, the Guarantee Trustee in each of its capacities
hereunder, and to each agent, custodian or other Person employed
by it to act hereunder.
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(b) No provision of this Guarantee 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.
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Company, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
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 Company; 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
$50,000,000, 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 Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Company 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 Guarantee Trustee
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Company except during an Event of
Default. Subject to the
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provisions of this Section 4.2, if an Event of Default shall have occurred and
be continuing, the Guarantee Trustee may be appointed or removed by the Holders
of a Majority in Liquidation Amount.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) 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 Company.
(c) The Guarantee Trustee 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 a written instrument executed by the Guarantee Trustee and
delivered to the Company, 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 Company 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 30 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may, at the expense of the Company, petition 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.
(e) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of the
Guarantee Trustee pursuant to this Section 4.2, the Company shall pay to the
Guarantee Trustee all amounts due to the Guarantee Trustee accrued to the date
of such termination, removal or resignation.
ARTICLE V.
GUARANTEE
Section 5.1. Guarantee
To the extent set forth in this Guarantee, the Company irrevocably and
unconditionally agrees to pay in full to all Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Trust) on a Pro Rata
basis and all amounts due to the Guarantee Trustee, as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust may have or
assert. The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the Holders or by
causing the Trust to pay such amounts to the Holders. If a Trust Enforcement
Event has occurred and is continuing, the rights of the Holders of the Common
Securities to receive Guarantee Payments shall be subordinated to the rights of
the Holders of Preferred Securities to receive Guarantee Payments.
Notwithstanding anything to the contrary herein, the Company, in its capacity as
issuer of the Debentures, retains all of its rights under the Indenture to:
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(i) extend the interest payment period on the Debentures and the
Company shall not be obligated hereunder to make any
Guarantee Payments during any Extended Period (as defined in
the Indenture) with respect to the Distributions on the
Securities; and
(ii) change the maturity date of the Debentures to the extent
permitted by the Indenture.
Section 5.2. Waiver of Notice and Demand
The Company hereby waives notice of acceptance of this Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Trust or any other Person
before proceeding against the Company, 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 Company under
this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Trust;
(b) the extension of time for the payment by the Trust of all or a
portion of the Distributions, Redemption Price or any other sums payable under
the terms of the Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Securities
(other than an extension of time for payment of Distributions, Redemption Price
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 Securities, or any action
on the part of the Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed or
incurred in this Guarantee; or
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(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of the Company, it being the intent of
this Section 5.3 that the obligations of the Company 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 Company with respect to the happening of any of the
foregoing.
No setoff, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature that the Company has or may have against any
Holder (except the defense of payment to such Holder) shall be available
hereunder to the Company against such Holder to reduce the payments to it under
this Guarantee.
Section 5.4. Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the 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
or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, subject
to the subordination provisions of Section 6.2, any Holder may institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights under this Guarantee, without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. In
addition, if the Company has failed to make a Guarantee Payment, a Holder,
subject to the subordination provisions of Section 6.2, may institute a legal
proceeding directly against the Company for enforcement of the Guarantee for
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Securities
of such Holder. The Company waives any right or remedy to require that any
action be brought first against the Trust or any other Person before proceeding
directly against the Company.
Section 5.5. Guarantee of Payment
This Guarantee creates a guarantee of payment and not of collection.
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Trust)
or upon distribution to the Holders of the Securities of the Debentures in
accordance with the terms of the Declaration and the Indenture.
Section 5.6. Subrogation
The Company shall be subrogated to all, if any, rights of the Holders
against the Trust in respect of any amounts paid to such Holders by the Company
under this Guarantee; provided, however, that the Company 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
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee. If any amount shall be paid to the Company in violation of
the preceding sentence,
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the Company agrees to hold such amount in trust for the Holders and to pay over
such amount to the Guarantee Trustee for the benefit of the Holders.
Section 5.7. Independent Obligations
The Company acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Securities, and that the
Company shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions
So long as any Securities remain outstanding, if an Event of Default
occurs under the Guarantee or a Trust Enforcement Event occurs under the
Declaration and written notice of such event has been given to the Company, or
if the Company has exercised its option under the Indenture to defer interest
payments and that period or extension of that period is continuing, the Company
shall not:
(a) declare or pay any dividend on, make any distributions relating
to, or redeem, purchase, acquire or make a liquidation payment
relating to, any of the Company's capital stock or any warrants,
options or other rights to acquire capital stock (but excluding
any debt security that is convertible into or exchangeable for
capital stock);
(b) make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company
(including any Other Debentures) that rank on a parity with or
junior in interest to the Debentures or make any payments with
respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company (including Other Guarantees) if
such guarantee ranks on a parity with or junior in interest to
the Debentures in each case, other than:
(i) dividends or distributions in capital stock (or rights
to acquire capital stock) of the Company;
(ii) payments under this Guarantee;
(iii)any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or
the redemption or repurchase of any such rights
pursuant to a rights agreement;
(iv) repurchases or acquisitions of shares of capital stock
of the Company in connection with the satisfaction by
the Company of its obligations under any employee
benefit plans or any other contractual obligation of
the Company; or
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(v) as a result of an exchange or conversion of the
Company's capital stock for another class or series of
the Company's capital stock;
(vi) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the
security being converted or exchanged; and
(vii)repurchases of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations pursuant to any acquisitions of businesses
made by the Company (which repurchases are made in
connection with the satisfaction of indemnification
obligations of the sellers of such businesses).
Section 6.2. Ranking
This Guarantee will constitute an unsecured obligation of the Company
and will rank:
(i) subordinate and junior in right of payment to Senior
Indebtedness (as defined in the Indenture), to the same
extent and in the same manner that the Debentures are
subordinated to Senior Indebtedness pursuant to the
Indenture;
(ii) pari passu with the most senior preferred or preference
stock now or hereafter issued by the Company, any
guarantee now or hereafter entered into by the Company
in respect of any preferred or preference stock of any
Affiliate of the Company, and any Other Guarantees; and
(iii) senior to the Company's capital stock.
ARTICLE VII.
TERMINATION
Section 7.1. Termination
This Guarantee shall terminate upon:
(i) full payment of the Redemption Price of all Securities;
(ii) distribution of the Debentures held by the Trust to the
Holders; or
(iii)liquidation of the Trust and the full payment of the
amounts payable in accordance with the Declaration or
the distribution of the Debentures to the Holders.
Notwithstanding the foregoing, this Guarantee 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 under the Securities or under
this Guarantee.
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ARTICLE VIII.
INDEMNIFICATION
Section 8.1. Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Company 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 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 Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by a Holder 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 Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and, if selected by the Indemnified Person,
who has been selected with reasonable care, 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 might properly be paid.
Section 8.2. Indemnification
To the fullest extent permitted by law, the Company 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
a breach by the Guarantee Trustee hereunder, or 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
Guarantee and shall survive the removal or resignation of the Guarantee Trustee.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. Successors and Assigns
All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the Holders then outstanding.
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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 Guarantee may only be amended with the prior approval of the
Holders of a Majority in Liquidation Amount of the Securities. The provisions of
the Declaration with respect to consents to amendments thereof, whether at a
meeting or otherwise, shall apply to the giving of such approval.
Section 9.3. Notices
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered by hand or
express courier, telecopied or mailed by first class mail, as follows:
(a) If given to the Trust, at the Trust's mailing address set forth
below (or such other address as the Trust may give notice of to
the Holders and the Guarantee Trustee):
Commerce Capital Trust [___]
c/o Commerce Bancorp, Inc.
Commerce Atrium 0000
Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Chief Financial Officer and
Senior Vice President
Fax: 000.000.0000
(b) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders and the
Trust):
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Fax: 000.000.0000
(c) If given to the Company, at the Company's mailing address set
forth below (or such other address as the Company may give notice
of to the Holders and the Guarantee Trustee):
Commerce Capital Trust [___]
c/o Commerce Bancorp, Inc.
Commerce Atrium 0000
Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Chief Financial Officer and
Senior Vice President
Fax: 000.000.0000
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(d) If given to any Holder, at such Holder's address set forth on the
books and records of the Trust. All such notices shall be deemed to have been
given when received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
Section 9.4. Benefit
This Guarantee is solely for the benefit of the Holders and, subject to
Section 3.1(a), is not separately transferable from the Securities.
Section 9.5. Governing Law
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.
Section 9.6. Counterparts
This Guarantee may contain more than one counterpart of the signature
page, and this Guarantee may be executed by affixing of the signature of each of
the parties to one of such counterpart signature pages. All such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
IN WITNESS WHEREOF, this Guarantee Agreement has been entered into as
of the day and year first written above.
Commerce Bancorp, Inc., as Company The Bank of New York, as Guarantee
Trustee
By: By:
--------------------------------- -------------------------------
Name: Name:
-------------------------------- ------------------------------
Title: Title:
------------------------------- -----------------------------
