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EXHIBIT 4.6
FORM OF
EXCHANGE GUARANTEE AGREEMENT
BETWEEN
PROVIDENT BANKSHARES CORPORATION
AS GUARANTOR,
AND
BANKERS TRUST COMPANY
AS GUARANTEE TRUSTEE,
DATED AS OF ________, 1998
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PROVIDENT TRUST I
Certain Sections of this Exchange Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Guarantee Agreement
Act Section Section
------------------- ---------------------------
Section 310(a) (1)................................4.1 (a)
(a) (2)...........................4.1 (a)
(a) (3)...........................Not Applicable
(a) (4)...........................Not Applicable
(b)...............................2.8, 4.1 (c)
Section 311(a)....................................Not Applicable
(b)...............................Not Applicable
Section 312(a)....................................2.2 (a)
(b)...............................2.2 (b)
(c)...............................Not Applicable
Section 313(a)....................................2.3
(a) (4)...........................2.3
(b)...............................2.3
(c)...............................2.3
(d)...............................2.3
Section 314(a)....................................2.4
(b)...............................2.4
(c) (1)...........................2.5
(c) (2)...........................2.5
(c) (3)...........................2.5
(e)...............................1.1, 2.5, 3.2
Section 315(a)....................................3.1 (d)
(b)...............................2.7
(c)...............................3.1 (c)
(d)...............................3.1 (d)
(e)...............................Not Applicable
Section 316(a)....................................1.1, 2.6, 5.4
(a) (1) (A).......................5.4
(a) (1) (B).......................5.4
(a) (2)...........................Not Applicable
(b)...............................5.3
(c)...............................Not Applicable
Section 317(a) (1)................................Not Applicable
(a) (2)...........................Not Applicable
(b)...............................Not Applicable
Section 318(a)....................................2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Exchange Guarantee Agreement.
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS
Section 1.1. Definitions................................... 1
ARTICLE II. TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application ................. 4
Section 2.2 List of Holders .................................. 5
Section 2.3 Reports by the Guarantee Trustee ................. 5
Section 2.4 Periodic Reports to the Guarantee Trustee ........ 5
Section 2.5 Evidence of Compliance with Conditions Precedent.. 5
Section 2.6 Events of Default; Waiver ........................ 6
Section 2.7 Event of Default; Notice ......................... 6
Section 2.8 Conflicting Interests ............................ 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1.Powers and Duties of the Guarantee Trustee........ 6
Section 3.2 Certain Rights of Guarantee Trustee .............. 8
Section 3.3 Indemnity ........................................ 9
Section 3.4 Expenses ......................................... 9
ARTICLE IV GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee; Eligibility ................... 10
Section 4.2 Appointment, Removal and Resignation
of the Guarantee Trustee ................... 10
ARTICLE V. GUARANTEE
Section 5.1 Exchange Guarantee ............................... 11
Section 5.2 Waiver of Notice and Demand ...................... 11
Section 5.3 Obligations Not Affected ......................... 11
Section 5.4 Rights of Holders ................................ 12
Section 5.5 Guarantee of Payment ............................. 12
Section 5.6 Subrogation ...................................... 13
Section 5.7 Independent Obligations .......................... 13
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1 Subordination .................................... 13
Section 6.2 Pari Passu Guarantees ............................ 13
ARTICLE VII. TERMINATION
Section 7.1. Termination ......... ........................... 14
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ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns...............................14
Section 8.2. Amendments...........................................14
Section 8.3. Notices..............................................14
Section 8.4. Benefit..............................................16
Section 8.5. Interpretation.......................................16
Section 8.6. Governing Law........................................16
Section 8.7. Counterparts.........................................16
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GUARANTEE AGREEMENT
This EXCHANGE GUARANTEE AGREEMENT, dated as of ________, 1998
is executed and delivered by PROVIDENT BANKSHARES CORPORATION, a Maryland
corporation (the "Guarantor") having its principal office at 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Provident Trust I, a Delaware statutory business trust (the
"Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of April 17, 1998, among Provident Bankshares
Corporation, as Depositor, Bankers Trust Company, as Property Trustee (the
"Property Trustee"), Bankers Trust (Delaware), as Delaware Trustee (the
"Delaware Trustee") (collectively, the "Issuer Trustees"), the Administrators
named therein and the Holders from time to time of preferred undivided
beneficial ownership interests in the assets of the Issuer Trust, intends to
issue capital securities designated the "8.29% Exchange Capital Securities"
(each an "Exchange Capital Security") in exchange for its outstanding 8.29%
Original Capital Securities (collectively, the "8.29% Capital Securities") upon
consummation of the Exchange Offer (as defined in the Trust Agreement) and such
Exchange Capital Securities to be issued in a number, up to 40,000, in exchange
for the 8.29% Original Capital Securities tendered in exchange for such 8.29%
Exchange Capital Securities, each having a liquidation amount of $1,000 per
Exchange Capital Security, pursuant to the Exchange Offer;
WHEREAS, the Guarantor has executed and delivered a Capital
Securities Guarantee Agreement, dated as of April 17, 1998, between the
Guarantor and the Capital Securities Guarantee Trustee (the "Capital Securities
Guarantee"), in each case with terms substantially identical to this Exchange
Capital Securities Guarantee and for the benefit of the holder(s) of the Capital
Securities, except that if an Event of Default (as defined in the Amended and
Restated Trust Agreement) has occurred and is continuing, the rights of
holder(s) 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 the
Exchange Capital Securities and the Capital Securities to receive Guarantee
Payments under this Exchange Capital Securities Guarantee and the Capital
Securities Guarantee, respectively;
WHEREAS, the Issuer Trust has issued the Common Securities,
the Original Capital Securities and the Capital Security Guarantee, and used the
proceeds thereof for the purchase of the Junior Subordinated Deferrable Interest
Debentures;
WHEREAS, in connection with such issuance, under the terms of
the Registration Rights Agreement, the Guarantor and the Issuer Trust are
obligated to undertake an Exchange Offer whereby the Exchange Capital Securities
and the Exchange Guarantee Agreement will be exchanged for the Original Capital
Securities and the Guarantee Agreement, respectively; and
WHEREAS, as incentive for the Holders of Exchange Capital
Securities to exchange the Capital Securities for the Exchange Capital
Securities in the Exchange Offer, the Guarantor desires irrevocably and
unconditionally to pay to the Holders of the Exchange Capital Securities the
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Guarantee Payments (as defined below) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the return by each Holder,
which return the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Exchange Capital Securities Guarantee for
the benefit of the Holders of the Exchange Capital Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Exchange Guarantee Agreement, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Capital Securities" means the Exchange Capital Securities and
the Original Capital Securities.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Distributions" means preferential cumulative cash
distributions accumulating from April 17, 1998 and payable semiannually in
arrears on April 15 and October 15 of each year, commencing October 15, 1998, at
an annual rate of 8.29% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in any
of its payment obligations under this Guarantee Agreement, or (ii) a default by
the Guarantor in any other obligation hereunder that remains unremedied for 30
days.
"Exchange Capital Securities" shall have the meaning specified
in the first recital of this Guarantee Agreement.
"Exchange Guarantee Agreement" or "Guarantee Agreement" means
this Guarantee Agreement, as modified, amended or supplemented from time to
time.
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"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Exchange Capital
Securities, to the extent not paid or made by or on behalf of the Issuer Trust:
(i) any accumulated and unpaid Distributions (as defined in the Trust Agreement)
required to be paid on the Exchange Capital Securities, to the extent the Issuer
Trust shall have funds on hand available therefor at such time, (ii) the
Redemption Price, with respect to the Exchange Capital Securities called for
redemption by the Issuer Trust to the extent that the Issuer Trust shall have
funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer Trust, unless
the Exchange Junior Subordinated Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the Liquidation Amount and all accumulated and
unpaid Distributions to the date of payment to the extent the Issuer Trust shall
have funds on hand available to make such payment at such time and (b) the
amount of assets of the Issuer Trust remaining available for distribution to
Holders on liquidation of the Issuer Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Bankers Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first
paragraph of this Exchange Guarantee Agreement.
"Holder" means any holder, as registered on the books and
records of the Issuer Trust, 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, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of April 17, 1998, between Provident Bankshares Corporation and Bankers Trust
Company, as trustee, as may be modified, amended or supplemented from time to
time.
"Issuer Trust" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Junior Subordinated Debentures" means the Original Junior
Subordinated Deferrable Interest Debentures and the Exchange Junior Subordinated
Deferrable Interest Debentures.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Exchange Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Exchange Junior Subordinated Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Issuer Trust, Exchange
Junior Subordinated Debentures having a principal amount
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equal to the Liquidation Amount of the Trust Securities of the Holder to whom
such Junior Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per
Capital Security.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, Capital Securities
representing more than 50% of the aggregate Liquidation Amount of all then
outstanding Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Executive Vice President, Senior Vice President or Vice President, and
by the Secretary or an Assistant Secretary of the Guarantor, and delivered to
the Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;
(c) 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
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Redemption Date" means, with respect to any Capital Security
to be redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Exchange Junior Subordinated Debentures shall be a
Redemption Date for a Like Amount of Exchange Capital Securities.
"Redemption Price" shall have the meaning specified in the
Trust Agreement.
"Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer assigned to the Corporate Trust Office, including
any managing director, vice president, principal, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above
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designated officers and having direct responsibility for the administration of
this Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated April 17, 1998, executed by Provident Bankshares Corporation,
as Depositor, Bankers Trust (Delaware), as Delaware Trustee, Bankers Trust
Company, as Property Trustee, the Administrators named therein and the Holders
defined therein.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the
Exchange Capital Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Exchange Guarantee Agreement, the provision of the Trust
Indenture Act shall control. If any provision of this Exchange Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Exchange Guarantee Agreement as so modified or excluded, as the case may
be.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) semiannually, as soon as practicable after April
1 and October 1 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of April 1 and
October 1; and
(ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished.
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(b) The Guarantee Trustee shall comply with the requirements
of Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January 31,
1999, the Guarantee Trustee shall provide to the Holders such reports, if any,
as are required by Section 313 of the Trust Indenture Act in the form and in the
manner provided by Section 313 of the Trust Indenture Act. If this Guarantee
Agreement shall have been qualified under the Trust Indenture Act, the Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act 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
documents, reports and information shall be required to be provided to the
Securities and Exchange Commission only if this Guarantee Agreement shall have
been qualified under the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement 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 the Capital
Securities may, by vote, on behalf of 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 Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notice of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of such
notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the
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Board of Directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice of
such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement 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 THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, 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 Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
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(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the Guarantee Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including pursuant to
Section 2.1); and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than 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 Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel, and the advice or written opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel may be
legal counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security and indemnity
as would satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee.
(vi) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any negligence or wilful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (C) shall be fully
protected in acting in accordance with such instructions.
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(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee
Trustee for its expenses and costs (including reasonable attorneys' or agents'
fees) incurred in connection with the performance of its duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000, and shall be a corporation meeting the requirements of
Section 310(c) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2.
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(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a
Guarantee Trustee may resign at any time by giving written notice thereof to the
Holders. The Guarantee Trustee shall appoint a successor by requesting from at
least three Persons meeting the eligibility requirements such Person's expenses
and charges to serve as the Guarantee Trustee, and selecting the Person who
agrees to the lowest expenses and charges. If the instrument of acceptance by
the Successor Guarantee Trustee shall not have been delivered to the Guarantee
Trustee within 60 days after the giving of such notice of resignation, the
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any time
by Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders
of at least a Majority in Liquidation Amount of the Capital Securities,
delivered to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder, on
behalf of himself and all others similarly situated, may petition any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
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 or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
Trust may have or assert, except the defense of payment. 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 Trust
to pay such amounts to the Holders. The Guarantor
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shall give prompt written notice to the Guarantee Trustee in the event it makes
any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement 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 Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;
(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 Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer Trust or any of
the assets of the Issuer Trust;
(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) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it
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being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) 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
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer Trust) or upon the distribution of Exchange
Junior Subordinated Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if at the time of
any such payment, any amounts are due and unpaid under this Guarantee Agreement.
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 Trust 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 Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
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ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Guarantor to the extent and in the
manner set forth in the Indenture with respect to the Junior Subordinated
Debentures, and the provisions of Article XIII of the Indenture will apply,
mutatis mutandis, to the obligations of the Guarantor hereunder. The obligations
of the Guarantor hereunder do not constitute Senior Indebtedness of the
Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with any similar guarantee agreements issued by
the Guarantor on behalf of the holders of preferred or capital securities issued
by the Issuer Trust and with any other security, guarantee or other obligation
that is expressly stated to rank pari passu with the obligations of the
Guarantor under this Guarantee Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Exchange
Capital Securities, (ii) the distribution of Exchange Junior Subordinated
Debentures to the Holders in exchange for all of the Exchange Capital Securities
or (iii) full payment of the amounts payable in accordance with Article IX of
the Trust Agreement upon liquidation of the Issuer Trust. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder is required to restore
payment of any sums paid under the Exchange Capital Securities or this Guarantee
Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Exchange Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's
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obligations hereunder, the Guarantor shall not assign its obligations hereunder,
and any purported assignment that is not in accordance with these provisions
shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of the Holders (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Exchange Capital Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied (confirmed by delivery of the
original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantor may give notice to the Holders:
Provident Bankshares Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address set forth
below or such other address or telecopy number or to the attention of such other
Person as the Guarantee Trustee on behalf of the Issuer Trust may give notice to
the Holders:
Provident Trust I
c/o Provident Bankshares Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
with a copy to:
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Bankers Trust Company
Four Xxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer Trust.
All notices hereunder 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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Exchange Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
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(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS EXCHANGE GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
PROVIDENT BANKSHARES CORPORATION
as Guarantor
By:
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President and Chief Financial
Officer
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BANKERS TRUST COMPANY,
as Guarantee Trustee, and not
in its individual capacity
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
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