EXHIBIT 4.6
Form of New Guarantee of the Corporation relating to the New Capital Securities
====================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
MainStreet BankGroup Incorporated
Dated as of , 1998
====================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................................. 2
------------------------------
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................ 6
--------------------------------
SECTION 2.2 Lists of Holders of Securities.................................................. 6
------------------------------
SECTION 2.3 Reports by the Guarantee Trustee................................................ 6
--------------------------------
SECTION 2.4 Periodic Reports to Guarantee Trustee........................................... 7
-------------------------------------
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................ 7
------------------------------------------------
SECTION 2.6 Events of Default; Waiver....................................................... 7
-------------------------
SECTION 2.7 Event of Default; Notice........................................................ 7
------------------------
SECTION 2.8 Conflicting Interests........................................................... 8
---------------------
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee...................................... 8
------------------------------------------
SECTION 3.2 Certain Rights of Guarantee Trustee............................................. 10
-----------------------------------
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B
----------------------------------------------------
Guarantee....................................................................... 12
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.................................................. 12
------------------------------
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee....................... 13
---------------------------------------------------------
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee....................................................................... 14
---------
SECTION 5.2 Waiver of Notice and Demand..................................................... 14
---------------------------
SECTION 5.3 Obligations Not Affected........................................................ 14
------------------------
SECTION 5.4 Rights of Holders............................................................... 16
-----------------
SECTION 5.5 Guarantee of Payment............................................................ 16
--------------------
SECTION 5.6 Subrogation..................................................................... 16
-----------
SECTION 5.7 Independent Obligations......................................................... 16
-----------------------
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions...................................................... 17
--------------------------
SECTION 6.2 Ranking......................................................................... 17
-------
ARTICLE VII
TERMINATION
SECTION 7.1 Termination..................................................................... 18
-----------
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation..................................................................... 18
-----------
SECTION 8.2 Indemnification................................................................. 19
---------------
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.......................................................... 19
----------------------
SECTION 9.2 Amendments...................................................................... 19
----------
SECTION 9.3 Notices......................................................................... 20
-------
SECTION 9.4 Benefit......................................................................... 21
-------
SECTION 9.5 Governing Law................................................................... 21
-------------
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Guarantee"), dated as
of , 1998, is executed and delivered by MAINSTREET BANKGROUP INCORPORATED,
a Virginia corporation (the "Guarantor"), 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 Series B Capital
Securities (as defined herein) issued by MAINSTREET CAPITAL TRUST I, a Delaware
statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of November 19, 1997, among the trustees of
the Trust, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trustee intends
to issue capital securities designated the Series B 8.90% Capital Securities
(collectively the "Series B Capital Securities") in exchange for its outstanding
Series A 8.90% Capital Securities (collectively the "Series A Capital
Securities") upon consummation of the Exchange Offer (as defined in the
Declaration), such Series B Capital Securities to be issued in a number, up to
50,000, and with an aggregate liquidation amount, up to $50,000,000, equal to
the number and aggregate liquidation amount of the Series A Capital Securities
exchanged for Series B Capital Securities pursuant to the Exchange Offer; and
WHEREAS, as incentive for the Holders to exchange the Series A
Capital Securities for the Series B Capital Securities in the Exchange Offer,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Series B Guarantee, to pay to the Holders of the Series B
Capital Securities the Guarantee Payments (as defined below). The Guarantor
agrees to make certain other payments on the terms and conditions set forth
herein.
WHEREAS, the Guarantor has executed and delivered (i) a Common
Securities Guarantee Agreement, dated as of November 19, 1997 (the "Common
Securities Guarantee"), and (ii) a Series A Capital Securities Guarantee
Agreement, dated as of November 19, 1997 (the "Series A Guarantee"), in each
case with terms substantially similar to this Series B Guarantee, and for the
benefit of the holders of the Common Securities (as defined herein) and the
Series A Capital Securities, respectively, except that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of holders of Series B Capital
Securities and the Series A Capital Securities to receive Guarantee Payments
under this Series B Guarantee and the Series A Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each
Holder, which purchase the Guarantor hereby acknowledges shall benefit the
Guarantor, the Guarantor executes and delivers this Series B Guarantee for the
benefit of the Holders of the Series B Capital Securities.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Series B Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Series B Guarantee have the same meaning when used in this
Series B Guarantee unless otherwise defined in this Series B Guarantee;
(c) a term defined anywhere in this Series B Guarantee has the
same meaning throughout;
(d) all references to "the Series B Guarantee" or "this Series
B Guarantee" are to this Series B Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Series B Guarantee to Articles and
Sections are to Articles and Sections of this Series B Guarantee, unless
otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Series B Guarantee, unless otherwise defined in this
Series B Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in New York, New York or Martinsville,
Virginia are authorized or required by law or executive order to remain closed.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"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 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, Xxx
Xxxx 00000.
"Covered Person" means any Holder or beneficial owner of
Series B Capital Securities.
"Debenture Event of Default" shall mean any event specified in
Section 5.01 of the Indenture.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Series B Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Series B Capital
Securities, to the extent not paid or made by the Trust: (i) any accumulated and
unpaid Distributions (as defined in the Declaration) required to be paid on the
Series B Capital Securities, to the extent that the Trust has funds on hand
legally available therefor at such time; (ii) the applicable redemption price,
including all accumulated and unpaid Distributions to the date of redemption
(the "Redemption Price") with respect to the Series B Capital Securities called
for redemption, to the extent that the Trust has funds on hand legally available
therefor at such time; and (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Trust (other than in connection with the
distribution of the Junior Subordinated Debentures to Holders or the redemption
of all Series B Capital Securities), the lesser of (a) the aggregate of the
liquidation amount and all accumulated and unpaid Distributions on the Series B
Capital Securities to the date of payment, to the extent the Trust has funds
legally available therefor at the time, and (b) the amount of assets of the
Trust remaining available for distribution to Holders after satisfaction of
liabilities to creditors of the Trust as required by applicable law. If an Event
of Default has occurred and is continuing, no Guarantee Payments under the
Common Securities Guarantee with respect to the Common Securities or any
guarantee payment under any Other Common Securities Guarantees shall be made
until the Holders shall be paid in full the Guarantee Payments to which they are
entitled under this Series B Guarantee.
"Guarantee Trustee" means The Bank of New York, a New York
banking corporation, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Series B Guarantee
and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Series B Capital Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Series B
Capital Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Person actually known to a
Responsible Officer of the Guarantee Trustee to be an Affiliate of the
Guarantor.
"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 November 19, 1997,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, pursuant to which the Junior Subordinated Debentures are to be issued
to the Property Trustee of the Trust.
"Junior Subordinated Debentures" means the series of
subordinated debt securities of the Guarantor designated the Series B 8.90%
Junior Subordinated Deferrable Interest Debentures due 2027 held by the Property
Trustee (as defined in the Declaration).
"Majority in liquidation amount of the Series B Capital
Securities" means, except as provided in the terms of the Declaration or by the
Trust Indenture Act, Holder(s), voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Series B Capital Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, the Chief Executive Officer, the President,
a Vice President, the Chief Financial Officer, the Secretary or an Assistant
Secretary. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Series B Guarantee (other than
pursuant to Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same
meaning as "Other Guarantees" as defined in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to any other trust,
partnership or other entity affiliated with the Guarantor that is a financing
vehicle of the Guarantor (if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees to be issued by the
Guarantor with respect to capital securities (if any) similar to the Series B
Capital Securities issued by other trusts to be established by the Guarantor (if
any), in each case similar to the Trust.
"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.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November 19, 1997, by and among the Guarantor, the Trust
and the initial purchaser named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means any officer within the Corporate
Trust Office of the Guarantee Trustee, including any Vice President, any
Assistant Vice President, any Assistant Secretary, the Treasurer, any Assistant
Treasurer or other officer the Corporate Trust Office of the Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Subsidiary" shall have the same meaning as "Subsidiary" as
defined in the Indenture.
"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.
"Trust Securities" means the Common Securities and the Series
A Capital Securities and Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Series B Guarantee
and shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Series B
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Guarantee Trustee (unless
the Guarantee Trustee is otherwise the registrar of the Capital 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") as of such date, (i)
within three Business Days after May 15 and November 15 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Guarantee Trustee, provided, that the Guarantor shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor. 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 Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
Within 60 days after December 15 of each year, commencing
December 15, 1997, the Guarantee Trustee shall provide to the Holders 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 Guarantee Trustee
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information as are required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act provided that such compliance certificate shall be delivered on or
before 120 days after the end of each fiscal year of the Guarantor. 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 or
determinable from 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 the conditions precedent, if any, provided for in
this Series B Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Event of Default; Waiver
The Holders of a Majority in liquidation amount of Series B
Capital Securities may, by vote, on behalf of all 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 Series B Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default hereunder, transmit by mail, first class
postage prepaid, to all Holders, notices of all Events of Default actually known
to a Responsible Officer, unless such defaults have been cured before the giving
of such notice, provided, that, except in the case of default in the payment of
any Guarantee Payment, the 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 Guarantor, 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 shall be deemed to be specifically described
in this Series B Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
(a) This Series B Guarantee shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Series B 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. 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
Series B Guarantee 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 Series B Guarantee, and no implied covenants or obligations shall be read
into this Series B Guarantee against the Series B 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 Series
B Guarantee, and use the same degree of care and skill in its exercise thereof,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(d) No provision of this Series B 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 Series B 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 Series B
Guarantee, and no implied covenants or obligations shall be
read into this Series B 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 to
the requirements of this Series B Guarantee; but 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 to determine whether or not they conform
to the requirements of this Series B 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 in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Series B Capital 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 Series B Guarantee; and
(iv) no provision of this Series B 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, 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 Series B Guarantee or indemnity, reasonably satisfactory
to the Guarantee Trustee, 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 conclusively rely, and shall be
fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Series B Guarantee may be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Series B
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, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel
may be counsel to the Guarantor or any 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 Series B 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 Series B
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 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 Series B Guarantee.
(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.
(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, nominees, custodians 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. 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 Series B
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 Series B 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 (i) may request instructions
from the Holders of a Majority in liquidation amount of the Series B
Capital Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Series B
Guarantee.
(b) No provision of this Series B 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 Series B Guarantee
The recitals contained in this Series B Guarantee shall be
taken as the statements of the Guarantor, 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 Series B 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 Guarantor; and
(ii) be a corporation or other Person 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
other Person permitted by the Securities and Exchange Commission to act
as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation or
other Person 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 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 Guarantee Trustee
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed 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 Guarantor.
(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 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 of an instrument of removal or resignation, the Guarantee
Trustee resigning or being removed may 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 Series B Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
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
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Guarantee Trustee for the benefit of the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by the Trust), as and
when due, regardless of any defense, right of set-off or counterclaim that the
Trust may have or assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Series B Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Series B 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 Series B Capital
Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Series B Capital Securities or
the extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Series B Capital Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Junior Subordinated 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 Series B Capital
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
Series B Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Series B Capital 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 Series B Guarantee or exercising any trust or power conferred
upon the Guarantee Trustee under this Series B Guarantee.
(b) If the Guarantee Trustee fails to enforce such Series B
Guarantee, any Holder may institute a legal proceeding directly against the
Guarantor to enforce the Guarantee Trustee's rights under this Series B
Guarantee, without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. The Guarantor waives any right
or remedy to require that any action be brought first against the Trust or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Series B Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Trust in respect of any amounts paid to such Holders by
the Guarantor under this Series B Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Series B Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Series B Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Series B Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Series B
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (h), inclusive, of Section 5.3 hereof.
RTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Series B Capital Securities remain outstanding, the
Guarantor will not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor (including any Other Debentures) that rank pari passu with or junior
in right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any Subsidiary of the Guarantor (including any Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Junior Subordinated Debentures (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Series A
Guarantee and Series B Guarantee, (d) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock, (e) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged and (f)
purchases of common stock of the Guarantor related to the issuance of such
common stock or rights under any of the Guarantor's benefit plans for its
directors, officers or employees or any of the Guarantor's dividend reinvestment
plans), if at such time (1) there shall have occurred any event of which the
Guarantor has actual knowledge that (a) is, or with the giving of notice or the
lapse of time, or both, would be, a Debenture Event of Default and (b) in
respect of which the Guarantor shall not have taken reasonable steps to cure,
(2) the Guarantor shall be in default with respect to its payment of any
obligations under this Series B Guarantee or (3) the Guarantor shall have given
notice of its election to exercise its right to extend the interest payment
period pursuant to Section 16.01 of the Indenture and such extension shall have
commenced and be continuing.
SECTION 6.2 Ranking
This Series B Guarantee will constitute an unsecured
obligation of the Guarantor 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 Junior Subordinated Debentures are subordinated
to Senior Indebtedness pursuant to the Indenture (except as indicated below), it
being understood that the terms of Article XV of the Indenture shall apply to
the obligations of the Guarantor under this Series B Guarantee as if (x) such
Article XV were set forth herein in full and (y) such obligations were
substituted for the term "Junior Subordinated Debentures" appearing in such
Article XV, except that with respect to Section 15.03 of the Indenture only, the
term "Senior Indebtedness" shall mean all liabilities of the Guarantor, whether
or not for money borrowed (other than obligations in respect of Other
Guarantees), (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Guarantor, any guarantee now or hereafter entered
into by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor and any Other Guarantee, and (iii) senior to the
Guarantor's capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Guarantee shall terminate (i) upon full payment
of the Redemption Price (as defined in the Declaration) of all Series B Capital
Securities, or (ii) upon liquidation of the Trust, following the full payment of
the amounts payable in accordance with the Declaration or the distribution of
the Junior Subordinated Debentures to the Holders. Notwithstanding the
foregoing, this Series B 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 Series B Capital Securities or under this Series B
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Series
B 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 Series B Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Series B Guarantee and shall survive the resignation or removal of the Guarantee
Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Series A
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Series B Guarantee may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of the Securities
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined). The provisions of 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 Series B Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Trust, in care of the Administrative
Trustee 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):
MainStreet Capital Trust I
c/o MainStreet BankGroup Incorporated
Church & Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Administrative Trustee
Telecopy: (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, 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Trustee Administration
Telecopy: (000) 000-0000
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders and the Guarantee Trustee):
MainStreet BankGroup Incorporated
Xxxxxx & Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Executive Vice President
Telecopy: (000) 000-0000
(d) If given to any Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Series B Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Series B Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES B GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS SERIES B GUARANTEE is executed as of the day and year
first above written.
MAINSTREET BANKGROUP INCORPORATED, as Guarantor
By:_______________________________________
Name: Xxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer and Treasurer
THE BANK OF NEW YORK, as
Guarantee Trustee
By:_______________________________________
Name:
Title:
