Draft
LRW
6/5/97
TRUST CAPITAL SECURITIES GUARANTEE AGREEMENT
COMMERCE BANCORP, INC.
DATED AS OF JUNE [ ], 1997
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.................................................
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...............................................
SECTION 2.2 Lists of Holders of Securities.................................................
SECTION 2.3 Reports by the Trust Capital Securities Guarantee Trustee
SECTION 2.4 Periodic Reports to Trust Capital Securities Guarantee Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Events of Default; Waiver......................................................
SECTION 2.7 Event of Default; Notice.......................................................
SECTION 2.8 Conflicting Interests..........................................................
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Capital Securities Guarantee Trustee............
SECTION 3.2 Certain Rights of Trust Capital Securities Guarantee Trustee...................
SECTION 3.3 Not Responsible for Recitals or Issuance of
Trust Capital Securities Guarantee.............................................
ARTICLE IV
TRUST CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Trust Capital Securities Guarantee Trustee; Eligibility........................
SECTION 4.2 Appointment, Removal and Resignation of Trust Capital Securities
Securities Guarantee Trustee...................................................
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.......................................................................
SECTION 5.2 Waiver of Notice and Demand.....................................................
SECTION 5.3 Obligations Not Affected........................................................
SECTION 5.4 Rights of Holders...............................................................
SECTION 5.5 Guarantee of Payment............................................................
SECTION 5.6 Subrogation.....................................................................
SECTION 5.7 Independent Obligations.........................................................
i
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions......................................................
SECTION 6.2 Ranking..........................................................................
ARTICLE VII
TERMINATION
SECTION 7.1 Termination......................................................................
ARTICLE VII
INDEMNIFICATION
SECTION 8.1 Exculpation......................................................................
SECTION 8.2 Indemnification..................................................................
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns...........................................................
SECTION 9.2 Amendments.......................................................................
SECTION 9.3 Notices..........................................................................
SECTION 9.4 Benefit..........................................................................
SECTION 9.5 Governing Law....................................................................
ii
TRUST CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Trust Capital Securities Guarantee"), dated as of
June [ ], 1997, is executed and delivered by Commerce Bancorp, Inc., a New
Jersey corporation (the "Guarantor"), and Wilmington Trust Company, a Delaware
banking corporation, as trustee (the "Trust Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Trust Capital Securities (as defined herein) of Commerce Capital Trust I,
a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June [ ], 1997, among the trustees of the Issuer,
the Guarantor, as Sponsor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof 2,000,000 Trust Capital Securities, having an aggregate liquidation
amount of $50,000,000 such trust capital securities being designated the [ ]%
Trust Capital Securities (collectively the "Trust Capital Securities"), which
may be increased to 2,300,000 Trust Capital Securities having an aggregate
liquidation amount of $57,500,000 if an over allotment option granted to the
underwriters pursuant to the Underwriting Agreement for the public offering of
the Trust Capital Securities is exercised in full; and
WHEREAS, as incentive for the Holders to purchase the Trust Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Trust Capital Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder, which purchase
the Guarantor hereby acknowledges shall benefit the Guarantor, the Guarantor
executes and delivers this Trust Capital Securities Guarantee for the benefit of
the Holders.
1
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION I Definitions and Interpretation
In this Trust Capital Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Trust Capital Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Trust Capital Securities Guarantee have the
same meaning when used in this Trust Capital Securities
Guarantee unless otherwise defined in this Trust Capital
Securities Guarantee;
(c) A term defined anywhere in this Trust Capital Securities
Guarantee has the same meaning throughout;
(d) All references to "the Trust Capital Securities Guarantee"
or "this Trust Capital Securities Guarantee" are to this Trust
Capital Securities Guarantee as modified, supplemented or
amended from time to time;
(e) All references in this Trust Capital Securities Guarantee
to Articles and Sections are to Articles and Sections of this
Trust Capital Securities Guarantee, unless otherwise
specified;
(f) A term defined in the Trust Indenture Act has the same
meaning when used in this Trust Capital Securities Guarantee,
unless otherwise defined in this Trust Capital Securities
Guarantee or unless the context otherwise requires; and
(g) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405 under the
Securities Act of 1933, as amended, or any successor rule thereunder,
"Business Day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in the City of New York or Philadelphia, Pennsylvania
are authorized or required by law to transact business.
"Trust Capital Securities Guarantee Trustee" means Wilmington Trust Company, a
Delaware banking corporation, until a Successor Trust Capital Securities
Guarantee Trustee (as defined therein) has been appointed and has accepted such
appointment pursuant to the terms of this Trust Capital Securities Guarantee and
thereafter means each such Successor Trust Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Trust Capital Securities
Guarantee Trustee at which the corporate trust business of the Trust Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
"Covered Person" means any Holder of Trust Capital Securities.
2
"Debentures" means the series of subordinated debt securities of the Guarantor
designated the [ ]% Junior Subordinated Debentures due June 30, 2027 held by the
Property Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment or
other obligations under this Trust Capital Securities Guarantee, provided,
however, that except with respect to a default in payment of any Guarantee
Payment, the Guarantor shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Trust Capital Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Trust Capital
Securities to the extent the Issuer has funds on hand legally available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds on hand legally available therefor at such time, with
respect to any Trust Capital Securities called for redemption by the Issuer and
(iii) upon a voluntary or involuntary dissolution winding-up or liquidation of
the Issuer (other than in connection with the distribution of the Debentures to
the Holders or the redemption of all Trust Capital Securities), the lesser of
(a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Trust Capital Securities to the date of payment (the
"Liquidation Distribution") to the extent the Issuer has funds on hand legally
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer.
"Holder" shall mean any holder, as registered on the books and records of the
Issuer, of any Trust Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Trust Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Person known to a Responsible Officer of the Trust
Capital Securities Guarantee Trustee to be an Affiliate of the Guarantor.
"Indemnified Person" means the Trust Capital Securities Guarantee Trustee, any
Affiliate of the Trust Capital Securities Guarantee Trustee, or any officers,
directors, stockholders, members, partners, employees, representatives,
nominees, custodians or agents of the Trust Capital Securities Guarantee
Trustee.
"Indenture" means the Indenture dated as of June [ ], 1997, among the Guarantor
(the "Debenture Issuer") and Wilmington Trust Company, as trustee (the
"Indenture Trustee"), pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in Section
[ ] of the Indenture.
"Majority in liquidation amount of the Trust Capital Securities" means, except
as provided by the Declaration or by the Trust Indenture Act, a vote by
Holder(s) of more than 50% of the aggregate liquidation amount of all Trust
Capital Securities.
"Officers' Certificate" means, with respect to the Guarantor, a certificate
signed by any of the Chairman, a Vice Chairman, the Chief Executive Officer, the
President, a Vice President, the Comptroller, the Clerk or an Assistant Clerk of
the Guarantor. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Capital Securities
Guarantee (other than pursuant to Section 314(d)(4) of the Trust Indenture Act)
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
3
(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 Debentures" means all junior subordinated debentures issued by the
Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor with
respect to trust capital securities (if any) similar to the Trust Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Trust Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
Capital Securities Guarantee Trustee with direct responsibility for the
administration of this Trust Capital Securities Guarantee 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.
"Successor Trust Capital Securities Guarantee Trustee" means a successor Trust
Capital Securities Guarantee Trustee possessing the qualifications to act as
Trust Capital Securities Guarantee Trustee under Section 4. 1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Common Securities and the Trust Capital Securities,
collectively.
4
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Trust Capital Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Trust Capital
Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Trust Capital Securities Guarantee
Trustee (unless the Trust Capital Securities Guarantee Trustee is
otherwise the registrar of the Trust Capital Securities) with a list,
in such form as the Trust Capital Securities Guarantee Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such date, (i) within one Business Day after January 15
and July 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 Trust Capital Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of
Holders given to the Trust Capital Securities Guarantee Trustee by the
Guarantor. The Trust Capital Securities Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Trust Capital Securities Guarantee Trustee shall comply with
its obligations under Sections 31 l(a), 31 l(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Capital Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15, 1998, the Trust
Capital Securities 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 Trust
Capital Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Trust Capital Securities Guarantee Trustee
The Guarantor shall provide to the Trust Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, 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 Trust Capital Securities
Guarantee Trustee is for informational purposes only and the Trust Capital
Securities Guarantee Trustee's receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Guarantor's compliance with any of its
covenants hereunder (as to which the Trust Capital Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
5
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Trust Capital Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust 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 Trust Capital Securities Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Trust Capital Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Trust
Capital Securities Guarantee, mail by first class postage prepaid, to
all Holders, notices of all defaults 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 Trust Capital Securities Guarantee Trustee
shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors and/or a Responsible Officer in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Trust Capital Securities Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Trust Capital
Securities Guarantee Trustee shall have received written notice from
the Guarantor, or a Responsible Officer charged with the administration
of this Trust Capital Securities Guarantee 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 Trust
Capital Securities Guarantee for the purposes of clause (i) of the first proviso
contained in Section 3 1 0(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Capital Securities Guarantee Trustee
(a) This Trust Capital Securities Guarantee shall be held by the Trust
Capital Securities Guarantee Trustee for the benefit of the Holders,
and the Trust Capital Securities Guarantee Trustee shall not transfer
this Trust Capital Securities Guarantee to any Person except a Holder
exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Trust Capital Securities Guarantee Trustee on acceptance by
such Successor Trust Capital Securities Guarantee Trustee of its
appointment to act as Successor Trust Capital Securities Guarantee
Trustee. The right, title and interest of the Trust Capital Securities
Guarantee Trustee shall automatically vest in any Successor Trust
Capital Securities Guarantee Trustee, and such vesting and succession
of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such
6
Successor Trust Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer has
occurred and is continuing, the Trust Capital Securities Guarantee
Trustee shall enforce this Trust Capital Securities Guarantee for the
benefit of the Holders.
(c) The Trust Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events
of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Capital Securities
Guarantee, and no implied covenants shall be read into this Trust
Capital Securities Guarantee against the Trust Capital Securities
Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known
to a Responsible Officer, the Trust Capital Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by
this Trust Capital Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her
own affairs.
(d) No provision of this Trust Capital Securities Guarantee shall be
construed to relieve the Trust Capital Securities Guarantee Trustee
from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Trust Capital
Securities Guarantee Trustee shall be determined
solely by the express provisions of this Trust
Capital Securities Guarantee, and the Trust Capital
Securities Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Trust Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this
Trust Capital Securities Guarantee against the Trust
Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Trust Capital Securities Guarantee Trustee, the Trust
Capital Securities Guarantee Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trust
Capital Securities Guarantee Trustee and conforming
to the requirements of this Trust Capital Securities
Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are
specifically required to be furnished to the Trust
Capital Securities Guarantee Trustee, the Trust
Capital Securities Guarantee Trustee shall be under a
duty to examine the same to determine whether or not
they conform to the requirements of this Trust
Capital Securities Guarantee;
(ii) the Trust Capital Securities 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 Trust
Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Trust Capital Securities Guarantee Trustee shall not
be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of
the Holders of a Majority in liquidation amount of the Trust
Capital Securities relating to the
7
time, method and place of conducting any proceeding for any
remedy available to the Trust Capital Securities Guarantee
Trustee, or exercising any trust or power conferred upon the
Trust Capital Securities Guarantee Trustee under this Trust
Capital Securities Guarantee; and
(iv) no provision of this Trust Capital Securities Guarantee
shall require the Trust Capital Securities Guarantee Trustee
to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if the Trust
Capital Securities Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of
this Trust Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Trust Capital Securities
Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Trust Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust Capital
Securities Guarantee, the Trust Capital Securities Guarantee
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Trust Capital Securities Guarantee Trustee
(unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Trust Capital Securities Guarantee Trustee shall have
no duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or reregistration
thereof).
(v) The Trust Capital Securities Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of
such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Trust Capital Securities
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust
Capital Securities Guarantee from any court of competent
jurisdiction.
8
(vi) The Trust Capital Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers
vested in it by this Trust Capital Securities Guarantee at the
request or direction of any Holder, unless such Holder shall
have provided to the Trust Capital Securities Guarantee
Trustee such security and indemnity, reasonably satisfactory
to the Trust Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and
the expenses of the Trust Capital Securities Guarantee
Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be
requested by the Trust Capital Securities Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Trust Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in
it by this Trust Capital Securities Guarantee.
(vii) The Trust Capital Securities Guarantee Trustee shall not
be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trust Capital Securities Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Trust Capital Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents,
nominees, custodians or attorneys, and the Trust Capital
Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Trust Capital Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders, and the signature of the Trust Capital Securities
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Trust Capital
Securities Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Trust Capital
Securities Guarantee, both of which shall be conclusively
evidenced by the Trust Capital Securities Guarantee Trustee's
or its agent's taking such action.
(x) Whenever in the administration of this Trust Capital
Securities Guarantee the Trust Capital Securities Guarantee
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other
action hereunder, the Trust Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Trust 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 Trust Capital Securities Guarantee Trustee shall not
be liable for any action taken, suffered, or omitted to be
taken by it in good faith, without negligence, and reasonably
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Capital
Securities Guarantee.
(b) No provision of this Trust Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Trust Capital Securities
Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in
9
which it shall be illegal, or in which the Trust Capital Securities
Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Trust Capital Securities Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Capital
Securities Guarantee
The recitals contained in this Trust Capital Securities Guarantee shall be taken
as the statements of the Guarantor, and the Trust Capital Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Trust
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Trust Capital Securities Guarantee.
ARTICLE IV
TRUST CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Trust Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to
act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trust Capital Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Trust Capital
Securities Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Trust Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 3.1(b)
of the Trust Indenture Act, the Trust Capital Securities Guarantee
Trustee and Guarantor shall in all respects comply with the provisions
of Section 3.1(b) of the Trust Indenture Act, subject to the
penultimate paragraph thereof.
10
SECTION 4.2 Appointment, Removal and Resignation of Trust Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Capital Securities Guarantee
Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Trust Capital Securities Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Trust Capital
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Trust
Capital Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Capital Securities Guarantee Trustee shall hold office
until a Successor Trust Capital Securities Guarantee Trustee shall have
been appointed or until its removal or resignation. The Trust Capital
Securities Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by
the Trust Capital Securities Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Trust Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such
Successor Trust Capital Securities Guarantee Trustee and delivered to
the Guarantor and the resigning Trust Capital Securities Guarantee
Trustee.
(d) If no Successor Trust Capital Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of removal
or resignation, the Trust Capital Securities Guarantee Trustee
resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Trust Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Trust
Capital Securities Guarantee Trustee.
(e) No Trust Capital Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Trust Capital Securities
Guarantee Trustee.
(f) Upon termination of this Trust Capital Securities Guarantee or
removal or resignation of the Trust Capital Securities Guarantee
Trustee pursuant to this Section 4.2, the Guarantor shall pay to the
Trust Capital Securities Guarantee Trustee all amounts due to the Trust
Capital Securities Guarantee Trustee accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
11
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust Capital
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under this
Trust Capital Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Trust Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation
Distribution (as defined in the Declaration) or any other sums payable
under the terms of the Trust Capital Securities or the extension of
time for the performance of any other obligation under, arising out of,
or in connection with, the Trust 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 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 Trust
Capital 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 Trust Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred;
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense 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 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.
12
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Trust
Capital Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trust
Capital Securities Guarantee Trustee in respect of this Trust Capital
Securities Guarantee or exercising any trust or power conferred upon
the Trust Capital Securities Guarantee Trustee under this Trust Capital
Securities Guarantee.
(b) If the Trust Capital Securities Guarantee Trustee fails to enforce
such Trust Capital Securities Guarantee, any Holder may institute a
legal proceeding directly against the Guarantor to enforce the Trust
Capital Securities Guarantee Trustee's rights under this Trust Capital
Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Trust Capital Securities Guarantee Trustee or
any other person or entity. The Guarantor waives any right or remedy to
require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Capital Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders against
the Issuer in respect of any amounts paid to such Holders by the Guarantor under
this Trust Capital Securities Guarantee; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Trust Capital Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this Trust
Capital Securities Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Trust 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 Trust Capital Securities
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Capital Securities remain outstanding, the Guarantor shall
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Guarantor's
capital stock (which includes common and preferred stock), (ii) make any payment
of principal of or interest 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 Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu with or junior in right of
13
payment to the Debentures (other than (a) dividends or distributions in shares
of, or options, warrants, rights to subscribe for or purchase shares of, common
stock of the Guarantor, (b) any declaration of a dividend in connection with the
implementation of a 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 Trust Capital Securities Guarantee, (d)
the purchase of fractional shares resulting from a reclassification 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 related to the issuance of 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
(i) there shall have occurred any event of which the Guarantor has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would be an Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) if such Debentures
are held by the Property Trustee, the Guarantor shall be in default with respect
to its payment of any obligations under this Trust Capital Securities Guarantee
or (iii) the Guarantor shall have given notice of its election of the exercise
of its right to extend the interest payment period pursuant to Section 16.01 of
the Indenture and any such extension shall be continuing.
SECTION 6.2 Ranking
This Trust Capital Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
Senior and Subordinated Indebtedness (as defined in the Indenture), to the same
extent and in the same manner that the Debentures are subordinated to Senior and
Subordinated Indebtedness pursuant to the Indenture, (ii) pari passu with the
Debentures, the Other Debentures and any Other Guarantee, and (iii) senior to
the Guarantor's capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Capital Securities Guarantee shall terminate (i) upon full payment of
the Redemption Price (as defined in the Declaration) of all Trust Capital
Securities or (ii) upon liquidation of the Issuer, the full payment of the
amounts payable in accordance with the Declaration or (iii) the distribution of
the Debentures to the Holders and the holders of Common Securities.
Notwithstanding the foregoing, this Trust Capital Securities 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 Trust Capital
Securities or under this Trust Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in
accordance with this Trust Capital Securities Guarantee and in a manner
that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Trust
Capital Securities Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
14
(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 Trust Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust Capital Securities
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
Trust Capital Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the Trust Capital
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 Trust Capital Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
faxed or mailed by first class mail, as follows:
15
(a) If given to the Issuer, in care of the Administrative Trustee, at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders and the Trust Capital
Securities Guarantee Trustee):
Commerce Capital Trust I c/o Commerce Bancorp, Inc., Commerce
Atrium, 0000 Xxxxx 00 Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: C. Xxxxxx Xxxxxx, Xx., Executive Vice President -
Fax: (000) 000-0000
(b) If given to the Trust Capital Securities Guarantee Trustee, at the
Trust Capital Securities Guarantee Trustee's mailing address set forth
below (or such other address as the Trust Capital Securities Guarantee
Trustee may give notice of to the Holders and the Issuer):
Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 Attention: Xxxxxx
Xxxxxx, Vice President - Fax: (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 Trust Capital Securities Guarantee Trustee):
Commerce Bancorp, Inc., Commerce Atrium, 0000 Xxxxx 00 Xxxx,
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000 Attention: C. Xxxxxx Xxxxxx,
Xx., Executive Vice President - Fax: (000) 000-0000
(d) If given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in person,
faxed 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.
16
SECTION 8.4 Benefit
This Trust Capital Securities Guarantee is solely for the benefit of the Holders
and, subject to Section 3.1(a), is not separately transferable from the Trust
Capital Securities.
SECTION 8.5 Governing Law
THIS TRUST CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS TRUST CAPITAL SECURITIES GUARANTEE is executed as of the day and year first
above written.
COMMERCE BANCORP, INC., as Guarantor
By: ____________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Trust Capital Securities Guarantee Trustee
By: _____________________________
Name:
Title:
17
