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EXHIBIT 4(h)(3)
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GUARANTEE AGREEMENT
BETWEEN
MBNA CORPORATION
(AS GUARANTOR)
AND
THE BANK OF NEW YORK
(AS TRUSTEE)
DATED AS OF
[_______] [__], 1997
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
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310(a)...................................................4.1(a)
310(b)...................................................4.1(c), 2.8
310(c)...................................................Inapplicable
311(a)...................................................2.2(b)
311(b)...................................................2.2(b)
311(c)...................................................Inapplicable
312(a)...................................................2.2(a)
312(b)...................................................2.2(b)
313......................................................2.3
314(a)...................................................2.4
314(b)...................................................Inapplicable
314(c)...................................................2.5
314(d)...................................................Inapplicable
314(e)...................................................1.1, 2.5, 3.2
314(f)...................................................2.1, 3.2
315(a)...................................................3.1(d)
315(b)...................................................2.7
315(c)...................................................3.1
315(d)...................................................3.1(d)
316(a)...................................................1.1, 2.6, 5.4
316(b)...................................................5.3
316(c)...................................................8.2
317(a)...................................................Inapplicable
317(b)...................................................Inapplicable
318(a)...................................................2.1(b)
318(b)...................................................2.1
318(c)...................................................2.1(a)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS..................................................... 1
Section 1.1. Definitions................................................................................................ 1
ARTICLE II. TRUST INDENTURE ACT................................................ 4
Section 2.1. Trust Indenture Act; Application .......................................................................... 4
Section 2.2. List of Holders............................................................................................ 4
Section 2.3. Reports by the Guarantee Trustee........................................................................... 4
Section 2.4. Periodic Reports to the Guarantee Trustee.................................................................. 4
Section 2.5. Evidence of Compliance with Conditions Precedent........................................................... 5
Section 2.6. Events of Default; Waiver.................................................................................. 5
Section 2.7. Event of Default; Notice................................................................................... 5
Section 2.8. Conflicting Interests...................................................................................... 5
ARTICLE III. POWERS, DUTIES AND RIGHTS
OF THE GUARANTEE TRUSTEE.............................................. 6
Section 3.1. Powers and Duties of the Guarantee Trustee................................................................. 6
Section 3.2. Certain Rights of Guarantee Trustee........................................................................ 7
Section 3.3. Indemnity.................................................................................................. 9
ARTICLE IV. GUARANTEE TRUSTEE................................................. 9
Section 4.1. Guarantee Trustee: Eligibility............................................................................. 9
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.............................................. 9
ARTICLE V. GUARANTEE.....................................................10
Section 5.1. Guarantee..................................................................................................10
Section 5.2. Waiver of Notice and Demand................................................................................10
Section 5.3. Obligations Not Affected...................................................................................10
Section 5.4. Rights of Holders..........................................................................................11
Section 5.5. Guarantee of Payment.......................................................................................11
Section 5.6. Subrogation................................................................................................12
Section 5.7. Independent Obligations....................................................................................12
ARTICLE VI. COVENANTS AND SUBORDINATION............................................12
Section 6.1. Subordination..............................................................................................12
Section 6.2. Pari Passu Guarantees......................................................................................12
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Page
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ARTICLE VII. TERMINATION...................................................13
Section 7.1. Termination................................................................................................13
ARTICLE VIII. MISCELLANEOUS..................................................13
Section 8.1. Successors and Assigns.....................................................................................13
Section 8.2. Amendments.................................................................................................13
Section 8.3. Notices....................................................................................................13
Section 8.4. Consolidation, Merger, Conveyance, Transfer or Lease.......................................................14
Section 8.5. Benefit....................................................................................................15
Section 8.6. Interpretation.............................................................................................15
Section 8.7. Governing Law..............................................................................................15
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of [__________], 1997, is
executed and delivered by MBNA CORPORATION, a Maryland corporation (the
"Guarantor") having its principal office at ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 Preferred Securities and Common Securities (each as defined
herein and together, the "Securities") of MBNA Capital C, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement,
dated as of [__________], 1997 (the "Trust Agreement"), among the Guarantor, as
Depositor, the Property Trustee and the Delaware Trustee named therein, the
Administrative Trustees named therein and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $[____________] aggregate Liquidation Amount (as defined in the Trust
Agreement) of its [____]% Trust Originated Preferred Securities, Liquidation
Amount $25 per preferred security) (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined herein), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
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"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; provided, however, that an Affiliate
of the Guarantor shall not be deemed to be an Affiliate of the Issuer. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means either the board of directors of
the Guarantor or any committee of that board duly authorized to act hereunder.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not
have cured such default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Securities, to the
extent not paid or made by or on behalf of the Issuer: (i) any accumulated and
unpaid Distributions (as defined in the Trust Agreement) required to be paid on
the Securities, to the extent the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accrued and
unpaid Distributions to the date of redemption (the"Redemption Price"), with
respect to any Securities called for redemption by the Issuer, to the extent
the Issuer shall have funds on hand available therefor at such time, and (iii)
upon a voluntary or involuntary termination, winding up or liquidation of the
Issuer, unless Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount plus accrued and unpaid Distributions to
the date of payment and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer after
satisfaction of liabilities to creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution").
"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 Agreement, and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Securities; provided, however, that in
determining whether the holders of the requisite percentage of Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of December 18, 1996, as supplemented and amended between the Guarantor and The
Bank of New York, as trustee.
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"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in aggregate Liquidation Amount of the Securities"
means, except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the aggregate Liquidation
Amount of all then outstanding Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of Directors
of such Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.
"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.
"Responsible Officer" when used with respect to the Guarantee
Trustee means any officer of the Guarantee Trustee assigned by the Guarantee
Trustee from time to time to administer its corporate trust matters.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
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ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee:
(i) semi-annually, not more than 15 days after
January 15 and July 15 in each year, a list, in such form as
the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders as of such January 1 and July 1, and
(ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the
Guarantor of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time
such list is furnished,
excluding from any such list names and addresses received by
the Guarantee Trustee in its capacity as Securities Registrar.
(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3. Reports by the Guarantee Trustee.
The Guarantee Trustee shall transmit to Holders such reports
concerning the Guarantee Trustee and its actions under this Guarantee Agreement
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Guarantee Trustee shall, within sixty days after each May 15
following the date of this Guarantee Agreement deliver to Holders a brief
report, dated as of such May 15, which complies with the provisions of such
Section 313(a).
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information, if any, as required by Section 314 of the Trust Indenture Act and
the compliance certificate required by Section 314
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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 Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein, including the
Guarantor's compliance with any of its covenants hereunder (as to which the
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 Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement 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 aggregate Liquidation Amount of
the Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of a default in the payment of
a Guarantee Payment, the Guarantee Trustee shall be protected in withholding
such notice if and so long as the Board of Directors, the executive committee
or a trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith 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, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice,
of such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The 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 Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, 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 Guarantee Agreement 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 Agreement, 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
Agreement; 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 to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
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(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in aggregate Liquidation Amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement 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, if the 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 Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to
it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may 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 reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officers' Certificate unless otherwise
prescribed herein.
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting to take any action hereunder,
the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel of its selection, and the advice or opinion of such
legal counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of
its Affiliates and may
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be one of its employees. The Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of
competent jurisdiction.
(v) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Guarantee Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the
Guarantee Trustee such adequate security and indemnity as
would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Guarantee Agreement.
(vi) 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.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through its agents or attorneys, and
the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it
desirable to receive written instructions with respect to
enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request written
instructions from the Holders, (B) may refrain from enforcing
such remedy or right or taking such other action until such
written instructions are received, and (C) shall be protected
in acting in accordance with such written instructions.
(ix) The Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
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SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Guarantee Trustee, arising
out of or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000, and shall be a
corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted
by the Trust Indenture Act, 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 Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor. If an instrument of acceptance by a Successor
Guarantee Trustee shall not have been delivered to the Guarantee Trustee within
30 days after such removal, the Guarantee Trustee being removed may petition
any court of competent jurisdiction for the appointment of a Successor
Guarantee Trustee.
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(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as
it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required 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 the
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Guarantee Trustee, Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures as provided in the Indenture), Redemption
Price, Liquidation Distribution 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;
(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 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
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 hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce
this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in liquidation preference 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 Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in
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full (without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee
Agreement will constitute unsecured obligations of the Guarantor and will rank
subordinate and junior in right of payment to all Senior Debt (as defined in
the Indenture) of the Guarantor, except those made pari passu or subordinate to
such obligations expressly by their terms. in the same manner as set forth in
Article XIII of the Indenture.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with the obligations of the Guarantor under any
similar Guarantee Agreements issued by the Guarantor on behalf of the holders
of preferred securities issued by any Trust (as defined in the Indenture).
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ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price of all Securities, (ii) the
distribution of Debentures to the Holders in exchange for all of the Securities
or (iii) full payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Securities or this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Securities then outstanding. Except in connection with a consolidation,
merger or sale involving the Guarantor that is permitted under Article VIII of
the Indenture and pursuant to which the successor or assignee agrees in writing
to perform the Guarantor's obligations hereunder, the Guarantor shall not
assign its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely
affect the rights of the Holders or the Guarantee Trustee in any material
respect (in which case no consent of the Holders or the Guarantee Trustee, as
the case may be, will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than a Majority in
Liquidation Amount of all the outstanding Securities and of the Guarantee
Trustee. The provisions of Article VI of the Trust Agreement concerning
meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below
or such other address, facsimile number or to the attention of such other
Person as the Guarantor may give notice to the Holders:
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MBNA Corporation
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
(b) if given to the Issuer, in care of the Guarantee Trustee,
at the Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give notice
to the Holders:
MBNA Capital C
c/o MBNA Corporation
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Consolidation, Merger, Conveyance, Transfer or
Lease.
The Guarantor shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Guarantor or convey, transfer or lease its properties
and assets substantially as an entirety to the Guarantor, unless it has
complied with the terms of Section 8.1 of the Indenture.
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SECTION 8.5. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Securities.
SECTION 8.6. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.7. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
MBNA CORPORATION
By:
--------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By:
--------------------------------
Name:
Title:
