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SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
Patriot Bank Corp.
Dated as of _________, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............... 5
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............. 9
SECTION 2.2 Lists of Holders of Securities................ 9
SECTION 2.3 Reports by the Capital Securities Guarantee
Trustee....................................... 10
SECTION 2.4 Periodic Reports to Capital Securities Guarantee
Trustee....................................... 10
SECTION 2.5 Evidence of Compliance with Conditions Precedent10
SECTION 2.6 Events of Default; Waiver...................... 10
SECTION 2.7 Event of Default; Notice....................... 11
SECTION 2.8 Conflicting Interests.......................... 11
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee.............................. 11
SECTION 3.2 Certain Rights of Capital Securities Guarantee
Trustee........................................ 13
SECTION 3.3. Not Responsible for Recitals or Issuance of Ser-
ies B Capital Securities Guarantee............. 16
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee;
Eligibility.....................................16
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee................... 17
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 18
SECTION 5.2 Waiver of Notice and Demand.................... 18
SECTION 5.3 Obligations Not Affected....................... 18
SECTION 5.4 Rights of Holders.............................. 19
SECTION 5.5 Guarantee of Payment........................... 19
SECTION 5.6 Subrogation.................................... 20
SECTION 5.7 Independent Obligations........................ 20
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.................... 20
SECTION 6.2 Ranking....................................... 21
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................... 22
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation................................... 22
SECTION 8.2 Indemnification............................... 22
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................ 23
SECTION 9.2 Amendments.................................... 23
SECTION 9.3 Notices....................................... 23
SECTION 9.4 Benefit....................................... 24
SECTION 9.5 Governing Law................................. 24
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital
Securities Guarantee"), dated as of _______, 1997, is executed
and delivered by PATRIOT BANK CORP., a Delaware corporation (the
"Guarantor"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Series B Capital Securities (as defined
herein) of Patriot Capital Trust I, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Trust Agreement"), dated as of June 5,
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 19,000 capital securities, having an
aggregate liquidation amount of $19,000,000, such capital
securities being designated the Series B 10.30% Capital
Securities (collectively the "Series B Capital Securities").
WHEREAS, as incentive for the Holders to exchange the
Series A Capital Securities (as defined herein) for the Series B
Capital Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Series B Capital Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth
herein.
WHEREAS, the Guarantor executed and delivered a
guarantee agreement dated June 5, 1997 (the "Common Securities
Guarantee"), with substantially identical terms to this Series B
Capital Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an
Event of Default (as defined in the Trust Agreement) has occurred
and is continuing, the rights of holders of the Common Securities
to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set
forth in the Common Securities Guarantee, to the rights of
holders of Series A Capital Securities and the Series B Capital
Securities to receive Guarantee Payments under this Series B
Capital Securities Guarantee and the Series A Capital Securities
Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the exchange by
each Holder of Series A Capital Securities for Series B Capital
Securities, which exchange the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers
this Series B Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Capital Securities Guarantee, unless
the context otherwise requires:
(a) Capitalized terms used in this Series B 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 Trust Agreement as at the
date of execution of this Series B Capital
Securities Guarantee have the same meaning when
used in this Series B Capital Securities Guarantee
unless otherwise defined in this Series B Capital
Securities Guarantee;
(c) A term defined anywhere in this Series B Capital
Securities Guarantee has the same meaning
throughout;
(d) All references to "the Series B Capital Securities
Guarantee" or "this Series B Capital Securities
Guarantee" are to this Series B Capital Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) All references in this Series B Capital Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Series B Capital Securities
Guarantee, unless otherwise specified;
(f) A term defined in the Trust Indenture Act has the
same meaning when used in this Series B Capital
Securities Guarantee, unless otherwise defined in
this Series B 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 are authorized or required by law or executive order to
close.
"Capital Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor
Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Series B
Capital Securities Guarantee and thereafter means each such
Successor 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
Capital Securities Guarantee Trustee at which the corporate trust
business of the 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 000 Xxxxxxx
Xxxxxx, 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covered Person" means any Holder or beneficial owner
of Series B Capital Securities.
"Debentures" means the series of subordinated debt
securities of the Guarantor designated the Series B 10.30% Junior
Subordinated Deferrable Interest Debentures due June 1, 2027 held
by the Property Trustee (as defined in the Trust Agreement) of
the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Series B
Capital Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Series B
Capital Securities, to the extent not paid or made by the Issuer:
(i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Series B
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 Series B Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involun-
tary termination and liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders in
exchange for Series B Capital 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
Series B Capital Securities to the date of payment, 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. If an
Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to
the Common Securities or any guarantee payment under any Other
Common Securities Guarantees shall be made until the Holders
shall be paid in full the Guarantee Payments to which they are
entitled under this Series B Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Series B Capital
Securities; provided, however, that, in determining whether the
holders of the requisite percentage of Series B Capital
Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities
Guarantee Trustee, any Affiliate of the Capital Securities
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of June 1,
1997, among the Guarantor (the "Debenture Issuer") and The Bank
of New York, as 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 5.01 of the Indenture.
"Majority in liquidation amount of the Series B Capital
Securities" means, except as provided by the Trust Indenture Act,
a vote by Holder(s) of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are
determined) of all Series B Capital Securities.
"Officers' Certificate" means, with respect to any
person, a certificate signed by the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Comptroller, the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Series B Capital Securities Guarantee (other than pursuant to
Section 314(a)(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;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(c) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Other Common Securities Guarantees" shall have the
same meaning as "Other Guarantees" as defined in the Common
Securities Guarantee.
"Other Debentures" means all junior subordinated
debentures issued by the Guarantor from time to time and sold to
any other trust, partnership or other entity affiliated with the
Guarantor that is a financing vehicle of the Guarantor (if any),
in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by
the Guarantor with respect to capital securities (if any) similar
to the Series B Capital Securities issued by any other trust,
partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor (if any), in each case
similar to the Issuer.
"Person" means a legal person, including any individu-
al, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of June 5, 1997, by and among the
Guarantor, the Issuer and the Initial Purchasers named therein as
such agreement may be amended, modified or supplemented from time
to time.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Capital Securities Guarantee
Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the
Capital Securities 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.
"Series A Capital Securities" means the Series A 10.30%
Capital Securities, having an aggregate liquidation amount of
$19,000,000, of the Issuer issued under the Trust Agreement.
"Successor Capital Securities Guarantee Trustee" means
a successor Capital Securities Guarantee Trustee possessing the
qualifications to act as 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
Series A Capital Securities and Series B Capital Securities,
collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Capital Securities Guarantee is
subject to the provisions of the Trust Indenture Act that are
required to be part of this Series B 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
Series B 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 Capital Securities
Guarantee Trustee (unless the Capital Securities Guarantee
Trustee is otherwise the registrar of the Capital Securities)
with a list, in such form as the 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 May 15 and November 15 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the 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 Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Capital Securities 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 Capital Securities Guarantee
Trustee
Within 60 days after December 15 of each year,
commencing December 15, 1997, the 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 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 Capital Securities Guarantee
Trustee
The Guarantor shall provide to the 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 Capital Securities Guarantee
Trustee is for informational purposes only and the 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 Capital Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Series B 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
Series B Capital Securities may, by vote, on behalf of all
Holders, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Series B 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 Capital Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to
this 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
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 Capital Securities Guarantee Trustee shall not
be deemed to have knowledge of any Event of Default unless the
Capital Securities Guarantee Trustee shall have received written
notice from the Guarantor, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Series B Capital Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee
(a) This Series B Capital Securities Guarantee shall
be held by the Capital Securities Guarantee Trustee for the
benefit of the Holders, and the Capital Securities Guarantee
Trustee shall not transfer this Series B Capital Securities
Guarantee to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Capital
Securities Guarantee Trustee on acceptance by such Successor
Capital Securities Guarantee Trustee of its appointment to act as
Successor Capital Securities Guarantee Trustee. The right, title
and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor 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
Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this Series B Capital
Securities Guarantee for the benefit of the Holders.
(c) The 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
Series B Capital Securities Guarantee, and no implied covenants
shall be read into this Series B Capital Securities Guarantee
against the 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 Capital Securities Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Series B
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 Series B Capital Securities
Guarantee shall be construed to relieve the 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 Capital
Securities Guarantee Trustee shall be determined solely
by the express provisions of this Series B Capital
Securities Guarantee, and the Capital Securities
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Series B Capital
Securities Guarantee, and no implied covenants or
obligations shall be read into this Series B Capital
Securities Guarantee against the Capital Securities
Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Capital Securities Guarantee Trustee, the 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 Capital Securities
Guarantee Trustee and conforming to the requirements of
this Series B 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 Capital Securities Guarantee Trustee,
the 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 Series B
Capital Securities Guarantee;
(ii) the 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
Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
(iii) the 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 Series B Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Series B Capital
Securities Guarantee; and
(iv) no provision of this Series B Capital Securities
Guarantee shall require the 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 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 Series B Capital Securities
Guarantee or indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee
Trustee
(a) Subject to the provisions of Section 3.1:
(i) The 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 Series B Capital Securities Guarantee
may be sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Series B
Capital Securities Guarantee, the Capital Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the 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 Capital Securities 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 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 Capi-
tal Securities Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of
this Series B Capital Securities Guarantee from any court of
competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers
vested in it by this Series B Capital Securities Guarantee
at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Securities Guaran-
tee Trustee such security and indemnity, reasonably satis-
factory to the Capital Securities Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses
and the expenses of the 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 Capital Securities Guarantee Trustee; pro-
vided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the 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 Series B Capital Securities Guarantee.
(vii) The 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 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 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 Capital Securiti-
es Guarantee Trustee shall not be responsible for any mis-
conduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guar-
xxxxx Trustee or its agents hereunder shall bind the Hold-
ers, and the signature of the Capital Securities Guarantee
Trustee or its agents alone shall be sufficient and effec-
tive to perform any such action. No third party shall be
required to inquire as to the authority of the Capital
Securities Guarantee Trustee to so act or as to its compli-
ance with any of the terms and provisions of this Series B
Capital Securities Guarantee, both of which shall be conclu-
sively evidenced by the Capital Securities Guarantee Truste-
e's or its agent's taking such action.
(x) Whenever in the administration of this Series B
Capital Securities Guarantee the Capital Securities Guaran-
tee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Series B Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The 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 rea-
sonably believed by it to be authorized or within the dis-
cretion or rights or powers conferred upon it by this Seri-
es B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities
Guarantee shall be deemed to impose any duty or obligation on the
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 which it shall be illegal,
or in which the 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 Capital Securities Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Ser-
ies B Capital Securities Guarantee
The recitals contained in this Series B Capital Securi-
ties Guarantee shall be taken as the statements of the Guarantor,
and the Capital Securities Guarantee Trustee does not assume any
responsibility for their correctness. The Capital Securities
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a 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 Ex-
change 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 authori-
ty. 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 com-
bined 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) Trustee shall cease to be eligible to so act under
Section
4.1(a), the Capital Securities Guarantee Trustee shall imme-
diately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or
shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Capital Securities
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 Capital
Securities Guarantee Trustee
(a) Subject to Section 4.2(b), the 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 Capital Securities Guarantee Trustee shall not
be removed in accordance with Section 4.2(a) until a Successor
Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such
Successor Capital Securities Guarantee Trustee and delivered to
the Guarantor.
(c) The Capital Securities Guarantee Trustee shall
hold office until a Successor Capital Securities Guarantee
Trustee shall have been appointed or until its removal or resig-
nation. The Capital Securities Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guaran-
tee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such ap-
pointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guaran-
tor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor 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 Capital Securities
Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
Capital Securities Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper,
appoint a Successor Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Capital
Securities Guarantee Trustee.
(f) Upon termination of this Series B Capital Securi-
ties Guarantee or removal or resignation of the Capital Securiti-
es Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Capital Securities Guarantee Trustee all amounts
due to the 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 counter-
claim 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.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of
this Series B Capital Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for pay-
ment, 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 Series B Capital Securities Guarantee
shall in no way be affected or impaired by reason of the happen-
ing 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 relat-
ing to the Series B Capital Securities to be performed or ob-
served by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption
Price, Liquidated Damages or any other sums payable under the
terms of the Series B Capital Securities or the extension of time
for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital Securities (other
than an extension of time for payment of Distributions,
Redemption Price, Liquidated Damages 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 Series B Capital Securities, or any
action on the part of the Issuer granting indulgence or extension
of any kind;
(d) the voluntary or involuntary liquidation, dissolu-
tion, sale of any collateral, receivership, insolvency, bank-
ruptcy, 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
Series B Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee
Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of
the Series B Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Capital Securities Guarantee Trustee in
respect of this Series B Capital Securities Guarantee or exer-
cising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guaran-
tee.
(b) If the Capital Securities Guarantee Trustee fails
to enforce such Series B Capital Securities Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor
to enforce the Capital Securities Guarantee Trustee's rights
under this Series B Capital Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the 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 Series B 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 Series B
Capital Securities Guarantee; provided, however, that the Guaran-
tor shall not (except to the extent required by mandatory provi-
sions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, xxxx-
bursement or other agreement, in all cases as a result of payment
under this Series B Capital Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this
Series B 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 hereun-
der are independent of the obligations of the Issuer with respect
to the Series B Capital Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Series B Capital Securi-
ties 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 Capital Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liqui-
dation payment with respect to, any of the Guarantor's capital
stock (which includes common and preferred stock) or (ii) make
any payment of principal of or premium, if any, 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 (in-
cluding Other Guarantees) if such guarantee ranks pari passu with
or junior in right of 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 this Series B Capital Securities Guarantee or the
Series A Capital Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange
or the conversion of one class or series of the Guarantor's
capital stock for another class or series of the Guarantor's
capital stock, (e) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or employ-
ees 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
Series B 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 continu-
ing.
SECTION 6.2 Ranking
This Series B Capital Securities Guarantee will con-
stitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to Senior Indebt-
edness (as defined in the Indenture), to the same extent and in
the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture (except as indicated
below), it being understood that the terms of Article XV of the
Indenture shall apply to the obligations of the Guarantor under
this Common Securities Guarantee as if (x) such Article XV were
set forth herein in full and (y) such obligations were substitut-
ed for the term "Securities" appearing in such Article XV, except
that with respect to Section 15.03 of the Indenture only, the
term "Senior Indebtedness" shall mean all liabilities of the
Guarantor, whether or not for money borrowed (other than obliga-
tions in respect of Other Guarantees), (ii) pari passu with the
most senior preferred or preference stock now or hereafter issued
by the Guarantor, any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, any Other Guarantee and any Other
Common Securities Guarantee, and (iii) senior to the Guarantor's
capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Capital Securities Guarantee shall termi-
nate (i) upon full payment of the Redemption Price (as defined in
the Trust Agreement) of all Series B Capital Securities, or (ii)
upon liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the distribu-
tion of the Debentures to the Holders. Notwithstanding the
foregoing, this 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
Series B Capital Securities or under this Series B 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 Series B Capital
Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority con-
ferred on such Indemnified Person by this Series B 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 miscon-
duct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts perti-
nent to the existence and amount of assets from which Distribu-
tions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Series B Capital Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Se-
xxxx B 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 materi-
ally adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Series B Capital
Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the Securi-
ties (including the stated amount that would be paid on redemp-
tion, liquidation or otherwise, plus accrued and unpaid Distribu-
tions to the date upon which the voting percentages are deter-
mined). The provisions of the Trust Agreement with respect to
consents to amendments thereof (whether at a meeting or other-
wise) shall apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Series B Capital
Securities Guarantee shall be in writing, duly signed by the
party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administra-
tive 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 Capital Securities Guarantee Trustee):
Patriot Capital Trust I
c/o Patriot Bank Corp.
High and Hanover Streets
Pottstown, PA 19464
Attention: Administrative Trustee
Telecopy: (000) 000-0000
(b) If given to the Capital Securities Guarantee
Trustee, at the Capital Securities Guarantee Trustee's mailing
address set forth below (or such other address as the Capital
Securities Guarantee Trustee may give notice of to the Holders
and the Issuer):
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee
Administration
Telecopy: (000) 000-0000
(c) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders and the Capital
Securities Guarantee Trustee):
Patriot Bank Corp.
High and Hanover Streets
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telecopy: (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, 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 deliv-
ered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Series B Capital Securities Guarantee is solely
for the benefit of the Holders and, subject to Section 3.1(a), is
not separately transferable from the Series B Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed
as of the day and year first above written.
PATRIOT BANK CORP., as Guarantor
By________________________________
Name:
Title:
THE BANK OF NEW YORK, as Capital
Securities Guarantee Trustee
By________________________________
Name:
Title: Authorized Signatory
