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EXHIBIT 4.7
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
PROSPERITY BANCSHARES, INC.
AND
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
DATED AS OF __________, 1999
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TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INTERPRETATION............................................ 1
Section 1.1. Definitions and Interpretation............................... 1
ARTICLE II
TRUST INDENTURE ACT....................................................... 5
Section 2.1. Trust Indenture Act; Application............................. 5
Section 2.2. Lists of Holders of Securities............................... 5
Section 2.3. Reports by the Trust Preferred Guarantee Trustee............. 5
Section 2.4. Periodic Reports to Trust Preferred Guarantee Trustee........ 5
Section 2.5. Evidence of Compliance with Conditions Precedent............. 6
Section 2.6. Events of Default; Waiver.................................... 6
Section 2.7. Event of Default; Notice..................................... 6
Section 2.8. Conflicting Interests........................................ 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUST PREFERRED
GUARANTEE TRUSTEE......................................................... 7
Section 3.1. Powers and Duties of the Trust Preferred Guarantee Trustee... 7
Section 3.2. Certain Rights of Trust Preferred Guarantee Trustee.......... 8
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee........ 10
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE......................................... 10
Section 4.1. Trust Preferred Guarantee Trustee; Eligibility............... 10
Section 4.2. Appointment, Removal and Resignation of Trust
Preferred Guarantee Trustees................................. 11
ARTICLE V
GUARANTEE................................................................. 12
Section 5.1. Guarantee.................................................... 12
Section 5.2. Waiver of Notice and Demand.................................. 12
Section 5.3. Obligations not Affected..................................... 12
Section 5.4. Rights of Holders............................................ 13
Section 5.5. Guarantee of Payment......................................... 14
Section 5.6. Subrogation.................................................. 14
Section 5.7. Independent Obligations...................................... 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION................................. 14
Section 6.1. Limitation of Transactions................................... 14
Section 6.2. Ranking...................................................... 15
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ARTICLE VII
TERMINATION............................................................... 15
Section 7.1. Termination.................................................. 15
ARTICLE VIII
INDEMNIFICATION........................................................... 15
Section 8.1. Exculpation.................................................. 15
Section 8.2. Indemnification.............................................. 16
ARTICLE IX
MISCELLANEOUS............................................................. 16
Section 9.1. Successors and Assigns....................................... 16
Section 9.2. Amendments................................................... 16
Section 9.3. Notices...................................................... 16
Section 9.4. Benefit...................................................... 17
Section 9.5. Governing Law................................................ 17
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CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
---------------- --------------
310(a)............................................................. 1(a)
310(b)............................................................. 1(c), 2.8
310(c)............................................................. Not Applicable
311(a)............................................................. 2.2(b)
311(b)............................................................. 2.2(b)
311(c)............................................................. Not Applicable
312(a)............................................................. 2.2(a)
312(b)............................................................. 2.2(b)
313................................................................ 2.3
314(a)............................................................. 2.4
314(b)............................................................. Not Applicable
314(c)............................................................. 2.5
314(d) ............................................................ Not Applicable
314(e)............................................................. 1.1, 2.5, 3.2
314(f)............................................................. 2.1, 3.2
315(a)............................................................. 3.1(d)
315(b)............................................................. 2.7
315(c)............................................................. 3.1
315(d)............................................................. 3.1(d)
316(a)............................................................. 1.1, 2.6, 5.4
316(b)............................................................. 5.3
317(a)............................................................. 3.1
317(b)............................................................. Not Applicable
318(a)............................................................. 1(a)
318(b)............................................................. 1
318(c)............................................................. 2.1(b)
Note: This Cross-Reference Table does not constitute part of this
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Trust
Preferred Securities Guarantee"), dated as of __________, 1999, is executed and
delivered by PROSPERITY BANCSHARES, INC., a Texas corporation (the "Guarantor"),
and FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association, as trustee (the "Trust Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Trust
Preferred Securities (as defined herein) of Prosperity Capital Trust I, a
Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 1999, among the trustees of the
Trust named therein, the Guarantor, as depositor, and the holders from time to
time of undivided beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof up to 1,200,000 preferred securities, having an
aggregate liquidation amount of $12,000,000, designated the ____% Cumulative
Trust Preferred Securities (the "Trust Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Preferred Securities Guarantee, to pay to the
Holders of the Trust Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Trust Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Trust Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Trust Agreement as at the date of execution of
this Trust Preferred Securities Guarantee have the same meaning when used in
this Trust Preferred Securities Guarantee, unless otherwise defined in this
Trust Preferred Securities Guarantee;
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(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Trust Preferred Securities Guarantee" or
"this Trust Preferred Securities Guarantee" are to this Trust Preferred
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Trust Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Trust Preferred Securities Guarantee, unless otherwise defined in
this Trust Preferred Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday, a day on
which federal or state banking institutions in New York, New York or Wilmington,
Delaware are authorized or required by law, executive order or regulation to
close or a day on which the Corporate Trust Office of the Trust Preferred
Guarantee Trustee is closed for business.
"Trust Preferred Guarantee Trustee" means First Union Trust Company,
National Association, until a Successor Trust Preferred Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Trust Preferred Securities Guarantee and thereafter means each such Successor
Trust Preferred Guarantee Trustee.
"Corporate Trust Office" means the office of the Trust Preferred
Guarantee Trustee at which the corporate trust business of the Trust Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at One Xxxxxx
Square, 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate
Trust Administration.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Debentures" means the ____% Subordinated Debentures due __________,
2029, of the Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means Prosperity Bancshares, Inc., issuer of the
Debentures under the Indenture.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Preferred Securities Guarantee.
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"Guarantor" means Prosperity Bancshares, Inc., a Texas corporation.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) that are required to be paid
on such Trust Preferred Securities, to the extent the Trust shall have funds
available therefor, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), to the
extent the Trust has funds available therefor, with respect to any Trust
Preferred Securities called for redemption by the Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Debentures to the Holders in
exchange for Trust Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Trust Preferred Securities to the date of payment,
to the extent the Trust shall have funds available therefor (the "Liquidation
Distribution"), and (b) the amount of assets of the Trust remaining available
for distribution to Holders in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Trust Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Trust Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Trust Preferred Guarantee Trustee or any of
their respective Affiliates.
"Indemnified Person" means the Trust Preferred Guarantee Trustee, any
Affiliate of the Trust Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Trust Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of __________, 1999, among the
Debenture Issuer and First Union Trust Company, National Association, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Property Trustee of the Trust.
"Liquidation Amount" means the stated value of $10 per Trust Preferred
Security.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"List of Holders" has the meaning provided therefor in Section 2.2(a)
hereof.
"Majority in liquidation amount of the Trust Preferred Securities"
means the Holders of more than 50% of the Liquidation Amount of all of the Trust
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person, at least one of
whom shall be the principal executive officer, principal financial officer,
principal accounting officer, treasurer or any vice president of such
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Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"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.
"Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Trust Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
Preferred Guarantee Trustee with direct responsibility for the administration of
this Trust Preferred Securities Guarantee, including any vice-president, any
assistant vice-president, any assistant secretary or other officer or assistant
officer of the Trust Preferred 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.
"Successor Trust Preferred Guarantee Trustee" means a successor Trust
Preferred Guarantee Trustee possessing the qualifications to act as Trust
Preferred Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this Trust
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.
(b) If and to the extent that any provision of this Trust Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) In the event the Trust Preferred Guarantee Trustee is not also
acting in the capacity of the Property Trustee under the Trust Agreement, the
Guarantor shall cause to be provided to the Trust Preferred Guarantee Trustee
with a list, in such form as the Trust Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Trust
Preferred Securities ("List of Holders") as of the date (i) within five (5)
Business Days after the last day of March, June, September and December, 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 15 days before such List
of Holders is given to the Trust Preferred 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 caused to
have been given to the Trust Preferred Guarantee Trustee by the Guarantor. The
Trust Preferred Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Trust Preferred 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 TRUST PREFERRED GUARANTEE TRUSTEE.
On or before July 15 of each year, the Trust Preferred Guarantee
Trustee shall provide to the Holders of the Trust Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Trust Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO TRUST PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Trust Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required
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by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Trust Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Trust Preferred Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Trust Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Trust Preferred Guarantee Trustee shall, within five (5)
Business Days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Trust Preferred Securities,
notices of all Events of Default actually known to a Responsible Officer of the
Trust Preferred Guarantee Trustee, unless such defaults have been cured before
the giving of such notice; provided, that, except in the case of a default by
Guarantor on any of its payment obligations, the Trust Preferred Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trust Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Trust Preferred Securities.
(b) The Trust Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Trust Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Trust Preferred Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in
this Trust Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE TRUST PREFERRED GUARANTEE TRUSTEE.
(a) This Trust Preferred Securities Guarantee shall be held by the
Trust Preferred Guarantee Trustee for the benefit of the Holders of the Trust
Preferred Securities, and the Trust Preferred Guarantee Trustee shall not
transfer this Trust Preferred Securities Guarantee to any Person except a Holder
of Trust Preferred Securities exercising his or her rights pursuant to Section
5.4(b) or to a Successor Trust Preferred Guarantee Trustee on acceptance by such
Successor Trust Preferred Guarantee Trustee of its appointment to act as
Successor Trust Preferred Guarantee Trustee. The right, title and interest of
the Trust Preferred Guarantee Trustee shall automatically vest in any Successor
Trust Preferred Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Trust Preferred
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Trust Preferred Guarantee Trustee has occurred and is continuing, the Trust
Preferred Guarantee Trustee shall enforce this Trust Preferred Securities
Guarantee for the benefit of the Holders of the Trust Preferred Securities.
(c) The Trust Preferred 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 Preferred Securities Guarantee, and no implied covenants
shall be read into this Trust Preferred Securities Guarantee against the Trust
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Trust Preferred Guarantee Trustee, the Trust
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Trust Preferred Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Trust Preferred Securities Guarantee shall be
construed to relieve the Trust Preferred 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 Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Trust Preferred Securities Guarantee, and
the Trust Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Trust Preferred Securities
Guarantee, and no implied covenants or obligations shall
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be read into this Trust Preferred Securities Guarantee against
the Trust Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Trust Preferred Guarantee Trustee, the Trust Preferred
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 Preferred Guarantee Trustee and conforming to the
requirements of this Trust Preferred Securities Guarantee; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Trust Preferred Guarantee Trustee, the Trust Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of
this Trust Preferred Securities Guarantee;
(ii) the Trust Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer
of the Trust Preferred Guarantee Trustee, unless it shall be proved
that the Trust Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Trust Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Trust Preferred Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trust Preferred Guarantee Trustee, or
exercising any trust or power conferred upon the Trust Preferred
Guarantee Trustee under this Trust Preferred Securities Guarantee; and
(iv) no provision of this Trust Preferred Securities Guarantee
shall require the Trust Preferred 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 Preferred 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
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Trust Preferred Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF TRUST PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Trust Preferred 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;
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(ii) any direction or act of the Guarantor contemplated by
this Trust Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Preferred Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Trust Preferred
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 Preferred 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 Trust Preferred Guarantee Trustee may consult with
counsel, and the written 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 Preferred Guarantee
Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Preferred Securities
Guarantee from any court of competent jurisdiction;
(vi) the Trust Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Trust Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Trust Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Trust Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Trust
Preferred 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 Preferred Guarantee Trustee; provided that, nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve the Trust
Preferred 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 Preferred Securities Guarantee;
(vii) the Trust Preferred 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 Preferred 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 Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees,
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custodians or attorneys, and the Trust Preferred 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 Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Trust Preferred
Securities, and the signature of the Trust Preferred 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 Preferred Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this Trust
Preferred Securities Guarantee, both of which shall be conclusively
evidenced by the Trust Preferred Guarantee Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Preferred
Securities Guarantee the Trust Preferred 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
Preferred Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Trust Preferred
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Trust Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Trust Preferred 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 Trust Preferred 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 Preferred Guarantee Trustee shall be construed
to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The Recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Trust Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Trust Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this Trust
Preferred Securities Guarantee.
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. TRUST PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Trust Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Trust Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Trust Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Trust Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Trust Preferred 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 TRUST PREFERRED GUARANTEE
TRUSTEES.
(a) Subject to Section 4.2(b), the Trust Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Trust Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Trust Preferred Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Trust Preferred Guarantee Trustee and
delivered to the Guarantor.
(c) The Trust Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Trust Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Trust Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trust Preferred Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take effect until a
Successor Trust Preferred Guarantee Trustee has been appointed and has accepted
such appointment by instrument in writing executed by such Successor Trust
Preferred Guarantee Trustee and delivered to the Guarantor and the resigning
Trust Preferred Guarantee Trustee.
(d) If no Successor Trust Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Trust Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Trust Preferred Guarantee Trustee.
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Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trust Preferred Guarantee Trustee.
(e) No Trust Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Trust Preferred Guarantee Trustee.
(f) Upon termination of this Trust Preferred Securities Guarantee or
removal or resignation of the Trust Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Trust Preferred Guarantee Trustee
all amounts 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 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 Trust
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the 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 Trust Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Trust Preferred 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
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of the Trust Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with, the Trust
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
or any extension of the maturity date of 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 Preferred
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 Trust Preferred
Securities;
(f) any failure or omission to receive any regulatory approval or
consent required in connection with the Trust Preferred Securities (or the
common equity securities issued by the Trust), including the failure to receive
any approval of the Board of Governors of the Federal Reserve System required
for the redemption of the Trust Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; 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 hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) Subject to Section 5.4(b), the Holders of a Majority in liquidation
amount of the Trust Preferred Securities have the right to direct the time,
method and place of conducting of any proceeding for any remedy available to the
Trust Preferred Guarantee Trustee in respect of this Trust Preferred Securities
Guarantee or exercising any trust or power conferred upon the Trust Preferred
Guarantee Trustee under this Trust Preferred Securities Guarantee.
(b) Any Holder of Trust Preferred Securities may institute and
prosecute a legal proceeding directly against the Guarantor to enforce its
rights under this Trust Preferred Securities Guarantee without first instituting
a legal proceeding against the Trust, the Trust Preferred Guarantee Trustee or
any other Person.
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SECTION 5.5. GUARANTEE OF PAYMENT.
This Trust Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Trust Preferred Securities against the Trust in respect of any amounts paid
to such Holders by the Guarantor under this Trust Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Trust
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Trust Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Trust
Preferred Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Trust Preferred Securities remain outstanding, if there
shall have occurred an Event of Default under this Trust Preferred Securities
Guarantee, an event of default under the Indenture, an event of default under
the Trust Agreement or during an Extended Interest Payment Period (as defined in
the Indenture), then (a) the Guarantor shall not, and will not permit any
Subsidiary to, declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) as a result of a
reclassification of its capital stock for another class of its capital stock or
(ii) declarations of payments of dividends or distributions of capital stock by
a Subsidiary of the Guarantor to the Guarantor); (b) the Guarantor shall not,
and will not permit any Subsidiary to, make any payment of interest or principal
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Debentures; (c) the Guarantor shall
not make any guarantee payments with respect to any guarantee by the Guarantor
of the debt securities of any Subsidiary of the Guarantor if such guarantee
ranks pari passu with or junior in interest to the
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Debentures; and (d) the Guarantor shall not redeem, purchase or acquire less
than all of the outstanding Debentures or any of the Trust Preferred Securities.
SECTION 6.2. RANKING.
This Trust Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior Obligations,
as defined in the Indenture, of the Guarantor, to the extent and in the manner
set forth in the Indenture, and the applicable provisions of the Indenture will
apply, in all relevant respects, to the obligations of the Guarantor hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION.
This Trust Preferred Securities Guarantee shall terminate (a) upon full
payment of the Redemption Price of all Trust Preferred Securities, (b) upon full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust, or (c) upon distribution of the Debentures to the
Holders of the Trust Preferred Securities. Notwithstanding the foregoing, this
Trust Preferred Securities Guarantee shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Holder of Trust Preferred
Securities must restore payment of any sums paid under the Trust Preferred
Securities or under this Trust Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Trust Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Trust Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such
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other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Trust Preferred
Securities might properly be paid.
SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability 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 Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Trust Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Trust Preferred Securities then outstanding.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Trust Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in Liquidation Amount
of the Trust Preferred Securities. The provisions of Article VI of the Trust
Agreement with respect to meetings of Holders of the Trust Preferred Securities
apply to the giving of such approval.
SECTION 9.3. NOTICES.
All notices provided for in this Trust Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Trust Preferred Guarantee Trustee, at the Trust
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Trust Preferred Guarantee Trustee may give notice of to the
Holders of the Trust Preferred Securities):
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First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Trust Preferred Securities):
Prosperity Bancshares, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx, Vice President
(c) If given to any Holder of Trust Preferred Securities, 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 Trust Preferred Securities Guarantee is solely for the benefit of
the Holders of the Trust Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Trust Preferred Securities.
SECTION 9.5. GOVERNING LAW.
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS.
[SIGNATURE PAGE FOLLOWS]
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This Trust Preferred Securities Guarantee is executed as of the day and
year first above written.
PROSPERITY BANCSHARES, INC., as Guarantor
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as
Trust Preferred Guarantee Trustee
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
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