EXHIBIT 4.5
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CAPITAL SECURITIES GUARANTEE AGREEMENT
LIFE FINANCIAL CORPORATION
DATED AS OF ____________, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION........................ 1
SECTION 1.1 Definitions and Interpretation........................ 2
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 Capital Securities Guarantee Trustee... 5
SECTION 2.4. Periodic Reports to Capital Securities Guarantee...... 6
Trustee
SECTION 2.5. Evidence of Compliance with Condition Precedent....... 6
SECTION 2.6. Events of Default; Waiver............................. 6
SECTION 2.7. Events of Default; Notice............................. 6
SECTION 2.8. Conflicting Interests................................. 7
ARTICLE III POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES
GUARANTEE TRUSTEE..................................... 7
SECTION 3.1. Powers and Duties of the Capital Securities Guarantee
Trustee.............................................. 7
SECTION 3.2. Certain Rights of Capital Securities Guarantee
Trustee.............................................. 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Capital
Securities Guarantee.................................. 11
ARTICLE IV CAPITAL SECURITIES GUARANTEE TRUSTEE.................. 11
SECTION 4.1. Capital Securities Guarantee Trustee; Eligibility..... 11
SECTION 4.2. Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee.......................... 12
ARTICLE V GUARANTEE............................................. 13
SECTION 5.1. Guarantee............................................. 13
SECTION 5.2. Waiver of Notice and Demand........................... 13
SECTION 5.3. Obligations Not Affected.............................. 13
SECTION 5.4. Rights of Holders..................................... 14
SECTION 5.5. Guarantee of Payment.................................. 15
SECTION 5.6 Subrogation........................................... 15
SECTION 5.7. Independent Obligations............................... 15
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ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION............ 15
SECTION 6.1. Limitation of Transactions........................... 15
SECTION 6.2. Ranking.............................................. 16
ARTICLE VII TERMINATION.......................................... 17
ARTICLE VIII COMPENSATION AND EXPENSES OF CAPITAL SECURITIES
GUARANTEE TRUSTEE.................................... 17
ARTICLE IX INDEMNIFICATION...................................... 17
SECTION 9.1. Exculpation.......................................... 17
SECTION 9.2. Indemnification...................................... 18
ARTICLE X MISCELLANEOUS........................................ 18
SECTION 10.1. Successors and Assigns............................... 18
SECTION 10.2. Amendments........................................... 18
SECTION 10.3. Notices.............................................. 19
SECTION 10.4. Benefit.............................................. 20
SECTION 10.5. Governing Law........................................ 20
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CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated as of
____________, 1997, is executed and delivered by LIFE Financial Corporation, a
Delaware corporation (the "Guarantor"), LIFE Financial Capital Trust, a Delaware
statutory business trust (the "Issuer") and State Street Bank and Trust Company,
a Massachusetts trust company, as trustee (the "Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of the Issuer.
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"; and capitalized terms used herein not otherwise defined shall
have the meanings ascribed thereto in the Declaration), dated as of
____________, 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 ____________ capital securities,
having an aggregate liquidation amount of $____________, such capital securities
being designated the ____% Convertible Trust Preferred Securities (collectively
the "Capital Securities").
WHEREAS, as incentive for the Holders to purchase the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Capital Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined herein). The Guarantor agrees to make certain
other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee agreement
(the "Common Securities Guarantee"), with substantially identical terms to this
Capital Securities Guarantee, for the benefit of the holders of the Common
Securities (as defined herein), except that if an Event of Default 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 Capital Securities to receive Guarantee Payments under
this Capital Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation
In this Capital Securities Guarantee, unless the context otherwise
requires:
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(a) Capitalized terms used in this Capital Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) all references to "the Capital Securities Guarantee" or "this Capital
Securities Guarantee" are to this Capital Securities Guarantee as modified,
supplemented or amended from time to time;
(c) all references in this Capital Securities Guarantee to Articles and
Sections are to Articles and Sections of this Capital Securities Guarantee,
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning when
used in this Capital Securities Guarantee, unless otherwise defined in this
Capital Securities Guarantee or unless the context otherwise requires; and
(e) 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 California or Massachusetts are authorized or
required by law or executive order to close.
"Capital Securities Guarantee Trustee" means State Street Bank and Trust
Company, a Massachusetts trust company, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this 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 Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the ____% Junior Convertible Subordinated Debentures due
__________, 2027 held by the Property Trustee of the Issuer.
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"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by the Issuer: (i) any accumulated and unpaid Distributions that are
required to be paid on such 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 Capital Securities
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Capital Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the 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 Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of 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 ____________, 1997, between the
Guarantor (the "Debenture Issuer") and State Street Bank and Trust Company, as
trustee, pursuant to which the Debentures are to be issued to the Property
Trustee of the Issuer.
"Majority in liquidation amount of the Capital Securities" means, except as
provided by the Trust Indenture Act, a vote by Holders 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 Capital
Securities.
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"Officer's Certificate" means, with respect to any Person, a certificate
signed by the Chairman, the Co-Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary of such Person. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this Capital
Securities Guarantee (other than pursuant to Section 314(a)(4) of the Trust
Indenture Act) shall include:
(a) a statement that the officer signing the Officer's Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a statement that 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 such officer, such
condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as "Other
Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by the
Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor with
respect to capital securities (if any) similar to the Capital Securities, issued
by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
"Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, any assistant treasurer, any trust officer,
any senior trust officer or other officer in 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.
"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.
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"Trust Securities" means the Common Securities and the Capital Securities,
collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application
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(a) This Capital Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Capital Securities
Guarantee and, to the extent applicable, shall be governed by such provisions;
and
(b) if and to the extent that any provision of this 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
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(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") (i) within 14 days after each record date for
payment of Distributions (which shall list the Holders as of such dates), and
(ii) at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders by a Holder for a purpose reasonably related to
such Holder's interest as a Holder as of a date no more than 14 days before such
List of Holders is given to the Capital Securities Guarantee Trustee; provided,
however, 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 and the Capital Securities Guarantee Trustee should be entitled to
rely on such most recent List of Holders. The determination of what constitutes
a purpose reasonably related to a Holder's interest as a Holder shall be in the
sole discretion of the Administrators of the Issuer. 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
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Within 60 days after May 15 of each year, commencing May 15, 1998, the
Capital Securities Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313(a) 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.
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SECTION 2.4. Periodic Reports to Capital Securities Guarantee Trustee
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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(a)(4) of the
Trust Indenture Act, such compliance certificate to be delivered on or before
120 days after the end of each fiscal year of the Guarantor; provided, that any
such information, documents or reports required to be filed with the Securities
and Exchange Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, shall be filed with the Capital Securities
Guarantee Trustee within 15 days after the same is required to be filed with the
Securities and Exchange Commission. 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 Officer's
Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent
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The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this 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 Officer's Certificate.
SECTION 2.6. Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Capital Securities may,
by vote, on behalf of all the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this 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. Events of Default; Notice
-------------------------
(a) The Capital Securities Guarantee Trustee, within 90 days after the
occurrence of a default with respect to this Capital Securities Guarantee, shall
mail by first class postage prepaid, to all Holders, notices of all defaults
actually known to a Responsible Officer of the Capital Securities Guarantee
Trustee, 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 a
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Responsible Officer of the Capital Securities Guarantee Trustee 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 of the Capital Securities Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8. Conflicting Interests
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The Declaration shall be deemed to be specifically described in this
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 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 Capital Securities
Guarantee to any Person except a Holder exercising such Holder's 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 of the
Capital Securities Guarantee Trustee has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this 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 Capital Securities Guarantee, and no implied covenants shall be
read into this 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) of which a Responsible Officer of the
Capital Securities Guarantee Trustee has actual knowledge, the Capital
Securities Guarantee Trustee shall exercise such of the rights and
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powers vested in it by this 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 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:
(1) 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:
(i) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the
express provisions of this 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 Capital
Securities Guarantee, and no implied covenants or
obligations shall be read into this Capital Securities
Guarantee against the Capital Securities Guarantee
Trustee; and
(ii) 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 Capital Securities
Guarantee; provided, however, that 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 Capital Securities Guarantee;
(2) the Capital Securities Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Capital Securities Guarantee Trustee, unless it shall be proved that the
Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(3) 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 Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Capital
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Securities Guarantee Trustee, or exercising any trust or power conferred
upon the Capital Securities Guarantee Trustee under this Capital Securities
Guarantee; and
(4) no provision of this 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 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
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(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
Capital Securities Guarantee may be sufficiently evidenced by
an Officer's Certificate;
(iii) Whenever, in the administration of this 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), in the absence of bad faith on its
part, may request and conclusively rely upon an Officer's
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.
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Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Capital Securities Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this 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 Capital Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Capital Securities Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Capital
Securities Guarantee Trustee, against the costs, expenses
(including reasonable 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; provided 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 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 Securities Guarantee Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder;
(ix) Any action taken by the Capital Securities Guarantee Trustee
or its agents hereunder shall bind the Holders, and the
signature of the Capital Securities Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any
such action. No third party shall be required to inquire as to
the authority of the Capital Securities Guarantee Trustee to
so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities
Guarantee Trustee's or its agent's taking such action;
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(x) Whenever in the administration of this Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Capital Securities Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation
amount of the 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; and
(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 reasonably believed by
it to be authorized or within the discretion or rights or
powers conferred upon it by this Capital Securities Guarantee.
(b) No provision of this 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 Capital
---------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Capital Securities 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 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 Exchange Commission to act as an
institutional trustee under the Trust
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Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
___ million U.S. dollars ($__________), 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 Capital Securities Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately 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, subject to the penultimate paragraph thereof.
SECTION 4.2. Appointment, Removal and Resignation of Capital Securities
----------------------------------------------------------
Guarantee Trustee
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(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 resignation. 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 Guarantee 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 appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor 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
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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 Capital Securities Guarantee or removal or
resignation of the Capital Securities 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 hereby irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Capital Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor under
this Capital Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities (as such terms are
defined therein) or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital Securities
(other than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension of
any interest payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) except as set forth in Article VII hereof, 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 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 Capital Securities Guarantee or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Capital
Securities Guarantee; provided, however, that, subject to Section 3.1, the
Capital Securities Guarantee Trustee shall have the right to decline to follow
any such direction if the Capital Securities Guarantee Trustee, upon advice of
counsel, shall determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction or if the Capital
Securities Guarantee Trustee, upon advice of counsel, determines that the action
or proceeding so directed may
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not lawfully be taken or if the Capital Securities Guarantee Trustee in good
faith by its board of directors or trustees, executive committee, or a trust
committee of directors or trustees and/or Responsible Officers shall determine
that the action or proceedings so directed would involve the Capital Securities
Guarantee Trustee in personal liability.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
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 Capital Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Capital Securities
Guarantee Trustee or any other Person. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
Person before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment
--------------------
This Capital Securities Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6. Subrogation
-----------
The Guarantor shall be subrogated to all rights of the Holders against the
Issuer in respect of any amounts paid to such Holders by the Guarantor under
this Capital Securities Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any right that it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Capital Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Capital Securities Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the 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 Capital Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions
--------------------------
If (i) an Event of Default (as defined in the Indenture) shall have
occurred and be continuing (other than solely an Event of Default as described
in Section 5.1(c) of the Indenture), (ii) there shall
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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 Event of
Default (as defined in the Indenture), other than solely an Event of Default as
described in Section 5.1(c) of the Indenture, and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (iii) in the event the
Debentures are held by the Property Trustee and the Guarantor shall be in
default with respect to its payment of any obligations under this Capital
Securities Guarantee or (iv) the Guarantor shall have given notice of its
election of the exercise of its right to extend the interest payment period
pursuant to Section 16.1 of the Indenture and any such extension shall be
continuing, then, in each such case, 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 liquidation payment
with respect to, any of the Guarantor's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay or 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 any
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu 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
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a direct result of, and
only to the extent required in order to avoid the issuance of fractional shares
of capital stock following, 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 employees.
SECTION 6.2. Ranking
-------
This Capital Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
Senior Indebtedness (as defined in the Indenture), to the same extent and in the
same manner that the Debentures are subordinated to Senior Indebtedness pursuant
to the Indenture, it being understood that the terms of Article XV of the
Indenture shall apply to the obligations of the Guarantor under this Capital
Securities Guarantee as if (x) such Article XV were set forth herein in full and
(y) such obligations were substituted for the term "Securities" appearing in
such Article XV, (ii) pari passu with the Debentures, the Other Debentures and
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor and with any Other Guarantee and any Other Common Securities
Guarantee and any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any Affiliate of the Guarantor,
and (iii) senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
This Capital Securities Guarantee shall terminate (i) upon full payment of
the Redemption Price of all of the Capital Securities, or (ii) upon liquidation
of the Issuer and the full payment of the amounts payable in accordance with the
Declaration or the distribution of the Debentures to the Holders of all of the
Capital Securities. 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
Capital Securities or under this Capital Securities Guarantee.
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor agrees:
(a) to pay to the Capital Securities Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision or law in regard to the
compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse the Capital
Securities Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Capital Securities Guarantee
Trustee in accordance with any provision of this Capital Securities Guarantee
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to their respective negligence or bad faith.
The provisions of this Article VIII shall survive the dissolution of the
Issuer and the termination of this Capital Securities Guarantee and the removal
or resignation of the Capital Securities Guarantee Trustee.
The Capital Securities Guarantee Trustee may not claim any lien or charge
on any property of the Issuer as a result of any amount due pursuant to this
Article VIII.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1. 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
17
with this Capital Securities Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Capital Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(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, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 9.2. 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 9.2
shall survive the dissolution of the Issuer, the termination of this Capital
Securities Guarantee and the removal or resignation of the Capital Securities
Guarantee Trustee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Successors and Assigns
----------------------
All guarantees and agreements contained in this 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 10.2. 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 Capital Securities Guarantee may only be amended with the prior approval of
the Holders of a Majority in liquidation amount of the Capital Securities
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages
18
are determined). The provisions of the Declaration with respect to consents to
amendments thereof (whether at a meeting or otherwise) shall apply to the giving
of such approval.
SECTION 10.3. Notices
-------
All notices provided for in this 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 Administrator 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):
LIFE Financial Capital Trust
c/o LIFE Financial Corporation
00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxx X
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
(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):
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Administration
(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
of the Capital Securities and the Capital Securities Guarantee Trustee):
LIFE Financial Corporation
00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxx X
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
(d) If given to any Holder of Capital Securities, at the address set forth
on the books and records of the Issuer.
19
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 10.4. Benefit
-------
This Capital Securities Guarantee is solely for the benefit of the Holders
and, subject to Section 3.1(a), is not separately transferable from the Capital
Securities.
SECTION 10.5. Governing Law
-------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
20
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year first
above written.
LIFE Financial Corporation, as
Guarantor
By: ________________________
Xxxxxx X. Perl
President and Chief
Executive Officer
LIFE Financial Capital Trust
By: ________________________
Xxxxxx X. Perl
Administrator
State Street Bank and Trust Company, as
Capital Securities Guarantee
Trustee
By: ________________________
________________________
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