Exhibit 10.1
GUARANTEE AGREEMENT
MYSTIC FINANCIAL, INC.
Dated as of April 10, 2002
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION 1
SECTION 1.1 Definitions and Interpretation. 1
ARTICLE II POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 4
SECTION 2.1 Powers and Duties of the Guarantee Trustee. 4
SECTION 2.2 Certain Rights of the Guarantee Trustee. 5
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee. 7
SECTION 2.4 Events of Default; Waiver. 7
SECTION 2.5 Events of Default; Notice. 8
ARTICLE III THE GUARANTEE TRUSTEE 8
SECTION 3.1 The Guarantee Trustee; Eligibility. 8
SECTION 3.2 Appointment, Removal and Resignation of
the Guarantee Trustee. 9
ARTICLE IV GUARANTEE 9
SECTION 4.1 Guarantee. 9
SECTION 4.2 Waiver of Notice and Demand. 10
SECTION 4.3 Obligations Not Affected. 10
SECTION 4.4 Rights of Holders. 11
SECTION 4.5 Guarantee of Payment. 11
SECTION 4.6 Subrogation. 11
SECTION 4.7 Independent Obligations. 11
SECTION 4.8 Enforcement. 12
ARTICLE V LIMITATION OF TRANSACTIONS; SUBORDINATION 12
SECTION 5.1 Limitation of Transactions. 12
SECTION 5.2 Ranking. 13
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TABLE OF CONTENTS
Page
ARTICLE VI TERMINATION 13
SECTION 6.1 Termination. 13
ARTICLE VII INDEMNIFICATION 13
SECTION 7.1 Exculpation. 13
SECTION 7.2 Indemnification. 14
SECTION 7.3 Compensation; Reimbursement of Expenses. 15
ARTICLE VIII MISCELLANEOUS 15
SECTION 8.1 Successors and Assigns. 15
SECTION 8.2 Amendments. 16
SECTION 8.3 Notices. 16
SECTION 8.4 Benefit. 17
SECTION 8.5 Governing Law. 17
SECTION 8.6 Counterparts. 17
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GUARANTEE AGREEMENT
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This GUARANTEE AGREEMENT (the "Guarantee"), dated as of April 10,
2002, is executed and delivered by Mystic Financial, Inc., a financial
holding company incorporated in Delaware (the "Guarantor"), and Wilmington
Trust Company, a Delaware 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 Mystic Financial
Capital Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of April 10, 2002, among the trustees named
therein of the Issuer, Mystic Financial, Inc., as sponsor, and the Holders
from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof securities, having an
aggregate liquidation amount of up to $5,000,000, designated the Floating
Rate TRUPS(R) (the "Capital Securities"); and
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 Guarantee, to pay to the Holders of Capital
Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
the Capital Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
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In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified;
(e) terms defined in the Declaration as at the date of
execution of this Guarantee have the same meanings when used in this
Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires; and
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(f) a reference to the singular includes the plural and vice
versa.
"Beneficiaries" means any Person to whom the Issuer is or hereafter
becomes indebted or liable.
"Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of Mystic
Financial, Inc., designated the Floating Rate Junior Subordinated Debt
Securities due 2032, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" has the meaning set forth in Section 2.4.
"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 accrued and unpaid Distributions
(as defined in the Declaration) which are required to be paid on such
Capital Securities to the extent the Issuer has funds available in the
Property Account (as defined in the Declaration) therefor at such time,
(ii) the Redemption Price (as defined in the Indenture) to the extent the
Issuer has funds available in the Property Account therefor at such time,
with respect to any Capital Securities called for redemption by the Issuer,
(iii) the Special Redemption Price (as defined in the Indenture) to the
extent the Issuer has funds available in the Property Account therefor at
such time, with respect to Capital Securities called for redemption upon
the occurrence of a Special Event (as defined in the Indenture), and (iv)
upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution
of Debentures to the Holders of the Capital Securities in exchange therefor
as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer has funds
available in the Property Account therefor at such time, and (b) the amount
of assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such
Successor Guarantee Trustee.
"Holder" means 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 Guarantee Trustee, any Affiliate of
the Guarantee Trustee (including in its individual capacity), or any
officers, directors, shareholders,
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members, partners, employees, representatives, nominees, custodians or
agents of the Guarantee Trustee.
"Indenture" means the Indenture, dated as of April 10, 2002, between
the Guarantor and Wilmington Trust Company, not in its individual capacity
but solely as trustee, and any indenture supplemental thereto pursuant to
which the Debentures are to be issued to the Institutional Trustee of the
Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class,
but separately from the holders of Common Securities, of more than 50% of
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to, but excluding, the date upon which the voting percentages
are determined) of all Capital Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but not
including liabilities related to taxes) of the Issuer, other than
obligations of the Issuer to pay to holders of any Trust Securities the
amounts due such holders pursuant to the terms of the Trust Securities.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officer's
Certificate 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 each officer in rendering
the Officer's Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee with
direct responsibility for the administration of any matters relating to
this Guarantee, including any vice president, any assistant vice president,
any secretary, any assistant secretary, the treasurer, any assistant
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treasurer, any trust officer or other officer of the Corporate Trust Office
of the 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 Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
3.1.
"Trust Securities" means the Common Securities and the Capital
Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee.
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(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Capital Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder of Capital
Securities exercising his or her rights pursuant to Section 4.4 (b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered pursuant to the appointment of such Successor Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee for the benefit of the Holders of the
Capital Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.4(b)) and is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this 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 Guarantee 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:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all Events of Default that may have
occurred:
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(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee, 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, and no implied
covenants or obligations shall be read into this Guarantee
against the Guarantee Trustee; 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; but in the case of any such
certificates or opinions furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same
to determine whether or not on their face they conform to the
requirements of this Guarantee;
(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 such Responsible
Officer of the Guarantee Trustee or 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 written 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; and
(iv) no provision of this Guarantee 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 is not reasonably assured to it under the
terms of this Guarantee, or security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION 2.2 Certain Rights of the Guarantee Trustee.
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(a) Subject to the provisions of Section 2.1:
(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 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 shall be sufficiently evidenced by an Officer's
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting 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 Officer's Certificate of
the Guarantor which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument or other writing
(or any rerecording, refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
at the request or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the 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 Guarantee Trustee; provided, however, that nothing
contained in this Section 2.2(a)(vi) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee.
(vii) 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.
(viii) The 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
Guarantee Trustee shall not be
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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 Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the
signature of the 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 Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Guarantee 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 of a Majority in liquidation amount of the Capital
Securities, (B) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received and (C)
shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee 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.
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee.
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The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
SECTION 2.4 Events of Default; Waiver.
-------------------------
(a) An Event of Default under this Guarantee will occur upon the
failure of the Guarantor to perform any of its payment or other obligations
hereunder.
(b) The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders
of all of the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
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Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.5 Events 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 of the Capital Securities, notices of all Events of
Default actually known to a Responsible Officer of the Guarantee Trustee,
unless such defaults have been cured before the giving of such notice,
provided, however, that the Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Capital Securities.
(b) The Guarantee Trustee shall not be charged with knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice thereof from the Guarantor or a Holder of the Capital
Securities, or a Responsible Officer of the Guarantee Trustee charged with
the administration of this Guarantee shall have actual knowledge thereof.
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1 The Guarantee Trustee; Eligibility.
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(a) There shall at all times be a 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 Person authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 3.1(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 Guarantee Trustee shall cease to be eligible
to so act under Section 3.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set forth in Section 3.2(c).
(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 shall either eliminate such interest or resign to the
extent and in the manner provided by, and subject to, this Guarantee.
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SECTION 3.2 Appointment, Removal and Resignation of the Guarantee
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Trustee.
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(a) Subject to Section 3.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 3.2(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by an instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction
for appointment of a Successor Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay
to the Guarantee Trustee all amounts owing to the Guarantee Trustee under
Sections 7.2 and 7.3 accrued to the date of such termination, removal or
resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee.
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(a) The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense
(except as defense of payment by the Issuer), 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.
(b) The Guarantor hereby also agrees to assume any and all
Obligations of the Issuer and in the event any such Obligation is not so
assumed, subject to the terms and conditions
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hereof, the Guarantor hereby irrevocably and unconditionally guarantees to
each Beneficiary the full payment, when and as due, of any and all
Obligations to such Beneficiaries. This Guarantee is intended to be for the
Beneficiaries who have received notice hereof.
SECTION 4.2 Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this 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 4.3 Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this 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;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price, Special
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 (other than an extension
of time for the payment of the Distributions, Redemption Price,
Special Redemption Price, Liquidation Distribution or other sums
payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the 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) 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 4.3 that the
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obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 4.4 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 Guarantee Trustee
in respect of this Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under this Guarantee; provided,
however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall
have the right to decline to follow any such direction if the Guarantee
Trustee shall determine that the actions so directed would be unjustly
prejudicial to the Holders not taking part in such direction or if the
Guarantee Trustee being advised by counsel determines that the action or
proceeding so directed may not lawfully be taken or if the 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 proceeding so directed would
involve the Guarantee Trustee in personal liability.
(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce the Guarantee
Trustee's rights under this Guarantee, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
The Guarantor waives any right or remedy to require that any such action be
brought first against the Issuer, the Guarantee Trustee or any other Person
before so proceeding directly against the Guarantor.
SECTION 4.5 Guarantee of Payment.
--------------------
This Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6 Subrogation.
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The Guarantor shall be subrogated to all (if any) rights of the
Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
applicable 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
Guarantee, if, after giving effect to any such payment, any amounts are due
and unpaid under this 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 4.7 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
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liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section
4.3 hereof.
SECTION 4.8 Enforcement.
-----------
A Beneficiary may enforce the Obligations of the Guarantor contained
in Section 4.1(b) directly against the Guarantor, and the Guarantor waives
any right or remedy to require that any action be brought against the
Issuer or any other person or entity before proceeding against the
Guarantor.
The Guarantor shall be subrogated to all rights (if any) of any
Beneficiary against the Issuer in respect of any amounts paid to the
Beneficiaries by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by applicable
provisions of law) be entitled to enforce or exercise any rights 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 Guarantee, if,
after giving effect to such payment, any amounts are due and unpaid under
this Guarantee.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions.
--------------------------
So long as any Capital Securities remain outstanding, if (a) there
shall have occurred and be continuing an Event of Default or (b) the
Guarantor shall have selected an Extension Period as provided in the
Declaration and such period, or any extension thereof, shall have commenced
and be continuing, then the Guarantor may not (x) 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 (y) make any payment of principal of or interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Guarantor that
rank pari passu in all respects with or junior in interest to the
Debentures (other than (i) payments under this Guarantee, (ii) repurchases,
redemptions or other acquisitions of shares of capital stock of the
Guarantor (A) in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors, or consultants, (B) in connection with a dividend
reinvestment or stockholder stock purchase plan or (C) in connection with
the issuance of capital stock of the Guarantor (or securities convertible
into or exercisable for such capital stock), as consideration in an
acquisition transaction entered into prior to the occurrence of the Event
of Default or the applicable Extension Period, (iii) as a result of any
exchange or conversion of any class or series of the Guarantor's capital
stock (or any capital stock of a subsidiary of the Guarantor) for any class
or series of the Guarantor's capital stock or of any class or series of the
Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (iv) 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, (v) any
declaration of a dividend in connection with any stockholder's rights plan,
or the issuance of
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rights, stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (vi) any dividend
in the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid
or ranks pari passu with or junior to such stock).
SECTION 5.2 Ranking.
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This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities
agrees to the foregoing provisions of this Guarantee and the other terms
set forth herein.
The right of the Guarantor to participate in any distribution of
assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of
that subsidiary, except to the extent the Guarantor may itself be
recognized as a creditor of that subsidiary. Accordingly, the Guarantor's
obligations under this Guarantee will be effectively subordinated to all
existing and future liabilities of the Guarantor's subsidiaries, and
claimants should look only to the assets of the Guarantor for payments
thereunder. This Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Guarantor, including Senior
Indebtedness of the Guarantor, under any indenture or agreement that the
Guarantor may enter into in the future or otherwise.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination.
-----------
This Guarantee shall terminate as to the Capital Securities (i) upon
full payment of the Redemption Price or the Special Redemption Price, as
the case may be, of all Capital Securities then outstanding, (ii) upon the
distribution of all of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance
with the Declaration upon dissolution of the Issuer. This Guarantee will
continue to be effective or will be reinstated, as the case may be, if at
any time any Holder of Capital Securities must restore payment of any sums
paid under the Capital Securities or under this Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 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 of
such Indemnified Person in good faith in accordance with this Guarantee and
in a manner that such Indemnified Person reasonably believed to be
13
within the scope of the authority conferred on such Indemnified Person by
this 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 Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or the
Guarantor by any Person as to matters the Indemnified Person reasonably
believes are within such other Person's professional or expert competence
and who, if selected by such Indemnified Person, has been selected with
reasonable care by such Indemnified Person, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Capital
Securities might properly be paid.
SECTION 7.2 Indemnification.
---------------
(a) 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 willful
misconduct on the part of the Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including but not limited to the costs and expenses (including
reasonable legal fees and expenses) of the Indemnified Person defending
itself against, or investigating, any claim or liability in connection with
the exercise or performance of any of the Indemnified Person's powers or
duties hereunder. The obligation to indemnify as set forth in this Section
7.2 shall survive the resignation or removal of the Guarantee Trustee and
the termination of this Guarantee.
(b) Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such Indemnified
Person will, if a claim in respect thereof is to be made against the
Guarantor under this Section 7.2, notify the Guarantor in writing of the
commencement thereof; but the failure so to notify the Guarantor (i) will
not relieve the Guarantor from liability under paragraph (a) above unless
and to the extent that the Guarantor did not otherwise learn of such action
and such failure results in the forfeiture by the Guarantor of substantial
rights and defenses and (ii) will not, in any event, relieve the Guarantor
from any obligations to any Indemnified Person other than the
indemnification obligation provided in paragraph (a) above. The Guarantor
shall be entitled to appoint counsel of the Guarantor's choice at the
Guarantor's expense to represent the Indemnified Person in any action for
which indemnification is sought (in which case the Guarantor shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person or Persons except as set forth below);
provided, however, that such counsel shall be satisfactory to the
Indemnified Person. Notwithstanding the Guarantor's election to appoint
counsel to represent the Indemnified Person in any action, the Indemnified
Person shall have the right to employ separate counsel (including local
counsel), and the Guarantor shall bear the reasonable fees, costs and
expenses of such separate counsel, if (i) the use of counsel chosen by the
Guarantor to represent the Indemnified Person would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the
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Indemnified Person and the Guarantor and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it
and/or other Indemnified Persons which are different from or additional to
those available to the Guarantor, (iii) the Guarantor shall not have
employed counsel satisfactory to the Indemnified Person to represent the
Indemnified Person within a reasonable time after notice of the institution
of such action or (iv) the Guarantor shall authorize the Indemnified Person
to employ separate counsel at the expense of the Guarantor. The Guarantor
will not, without the prior written consent of the Indemnified Persons,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the Indemnified Persons are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Person from all liability arising
out of such claim, action, suit or proceeding.
SECTION 7.3 Compensation; Reimbursement of Expenses.
---------------------------------------
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as the parties
shall agree to from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust); and
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this 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 its negligence or willful misconduct.
The provisions of this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale,
transfer or lease of the Guarantor's assets to another entity, in each case
to the extent permitted under the Indenture, the Guarantor may not assign
its rights or delegate its obligations under this Guarantee without the
prior approval of the Holders of not less than a Majority in liquidation
amount of the Capital Securities.
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SECTION 8.2 Amendments.
----------
Except with respect to any changes that do not adversely affect the
rights of Holders of the Capital Securities in any material respect (in
which case no consent of Holders will be required), this Guarantee may be
amended only with the prior approval of the Holders of not less than a
Majority in liquidation amount of the Capital Securities. The provisions of
the Declaration with respect to amendments thereof shall apply equally with
respect to amendments of the Guarantee.
SECTION 8.3 Notices.
-------
All notices provided for in this 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 Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as
the Guarantee Trustee may give notice of to the Holders of the
Capital Securities):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Telephone: 000-000-0000
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Capital Securities and to the
Guarantee Trustee):
Mystic Financial, Inc.
00 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
(c) If given to any Holder of the Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused
delivery or cannot be 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.
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SECTION 8.4 Benefit.
-------
This Guarantee is solely for the benefit of the Holders of the
Capital Securities and, subject to Section 2.1(a), is not separately
transferable from the Capital Securities.
SECTION 8.5 Governing Law.
-------------
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
SECTION 8.6 Counterparts.
------------
This Guarantee may contain more than one counterpart of the signature
page and this Guarantee may be executed by the affixing of the signature of
the Guarantor and the Guarantee Trustee to any of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of
the signers had signed a single signature page.
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THIS GUARANTEE is executed as of the day and year first above
written.
MYSTIC FINANCIAL, INC.,
as Guarantor
By: _____________________________________
Xxxxx X. Xxxxxx
President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By: _____________________________________
Name:
Title:
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