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EXHIBIT 4.7
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Sterling Bancshares, Inc.
Dated as of _______, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . 6
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . 6
SECTION 2.3 Reports by the Preferred Securities Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Periodic Reports to Preferred Securities
Guarantee Trustee . . . . . . . . . . . . . . . . 7
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . 7
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . 8
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities
Guarantee Trustee . . . . . . . . . . . . . . . . 8
SECTION 3.2 Certain Rights of Preferred Securities
Guarantee Trustee . . . . . . . . . . . . . . . . 10
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee . . . . . . . . . 13
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee;
Eligibility . . . . . . . . . . . . . . . . . . . 13
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Securities Guarantee Trustee . . . . . 14
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . 15
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . 15
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . 16
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . 17
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SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . 17
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . 17
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . 19
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . 20
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . 20
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . 20
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . 22
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of *, 1997, is executed and delivered by STERLING
BANCSHARES, INC., a Texas corporation (the "Guarantor"), and Bankers Trust
Company, a New York banking corporation, as trustee (the "Preferred Securities
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of STERLING
BANCSHARES CAPITAL TRUST I, a Delaware statutory business trust (the "Issuer").
RECITALS:
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of *, 1997, among the trustees of the
Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 1,000,000 Preferred Securities, having an aggregate
liquidation amount of $25,000,000 (assuming the Underwriters' over-allotment
option is not exercised), such preferred securities being designated the *%
Preferred Securities (the "Preferred Securities"); and
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders the Guarantee Payments (as defined below), and the Guarantor
agrees to make certain other payments on the terms and conditions set forth
herein; and
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Preferred Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set
forth in the Common Securities Guarantee, to the rights of holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee;
NOW, THEREFORE, in consideration of the purchase by each
Holder, which purchase the Guarantor hereby acknowledges shall benefit the
Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee have
the same meaning when used in this Preferred
Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee"
are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee, unless
otherwise specified;
(f) a term defined in the Trust Indenture Act (as defined
below) has the same meaning when used in this
Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Houston, Texas are authorized or required by law or executive order to close.
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"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Securities Guarantee Trustee at which the corporate trust business of the
Preferred Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the *% Junior Subordinated Deferrable Interest
Debentures due *, 2027 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer has funds on hand legally
available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the "Redemption
Price") to the extent the Issuer has funds on hand legally available therefor
at such time, with respect to any Preferred Securities called for redemption by
the Issuer, and (iii) upon a voluntary or involuntary termination and
liquidation of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accumulated and unpaid Distributions on the Preferred Securities to the
date of payment, to the extent the Issuer has funds on hand legally available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer. If an Event of Default
has occurred and is continuing, no Guarantee Payments under the Common
Securities Guarantee with respect to the Common Securities or any guarantee
payment under any Other Common Securities Guarantees shall be made until the
Holders shall be paid in full the Guarantee Payments to which they are entitled
under this Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities;
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provided, however, that, in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Person known
to a Responsible Officer of the Preferred Securities Guarantee Trustee to be an
Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Securities Guarantee
Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of *, 1997, among the
Guarantor (the "Debenture Issuer") and Bankers Trust Company, as trustee (the
"Indenture Trustee"), pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in
Section 5.01 of the Indenture.
"Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Declaration or by the Trust Indenture Act, a
vote by Holder(s) of more than 50% of the aggregate liquidation amount of all
Preferred Securities.
"Officers' Certificate" means, with respect to the Guarantor,
a certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Preferred Securities Guarantee (other than pursuant to Section 314(a)(4) of the
Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in the Officers' Certificate are based;
(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
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(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same
meaning as "Other Guarantees" as defined in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts to be established
by the Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the
Guarantor with respect to capital securities (if any) similar to the Preferred
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"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.
"Preferred Securities Guarantee Trustee" means Bankers Trust
Company, a New York banking corporation, until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Preferred Securities Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Preferred Securities Guarantee Trustee with direct responsibility for the
administration of this Preferred Securities Guarantee 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 Preferred Securities Guarantee Trustee" means a
successor Preferred Securities Guarantee Trustee possessing the qualifications
to act as Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means the Common Securities and the
Preferred Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.
(b) If and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such date, (i) within one
Business Day after January 15 and July 15 of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Preferred Securities Guarantee Trustee by the Guarantor. The Preferred
Securities Guarantee Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Preferred Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a).
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15,
1997, the Preferred Securities Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Preferred Securities Guarantee Trustee shall also comply with the
other requirements of Section 313 of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act. Delivery of such reports, information
and documents to the Preferred Securities Guarantee Trustee is for
informational purposes only and the Preferred Securities Guarantee Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Guarantor's compliance with any of its covenants hereunder (as to which the
Preferred Securities Guarantee Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Preferred Securities Guarantee that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of all Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Preferred Securities
Guarantee, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to this Preferred
Securities Guarantee, mail by first class postage prepaid, to all Holders,
notices of all defaults actually known to a Responsible Officer, unless such
defaults have been cured before the giving of such notice, provided, that,
except in the case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or
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a Responsible Officer in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Preferred Securities Guarantee Trustee shall not
be deemed to have knowledge of any Event of Default unless the Preferred
Securities Guarantee Trustee shall have received written notice from the
Guarantor, or a Responsible Officer charged with the administration of this
Preferred Securities Guarantee shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by
the Preferred Securities Guarantee Trustee for the benefit of the Holders, and
the Capital Securities Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Securities Guarantee
Trustee on acceptance by such Successor Preferred Securities Guarantee Trustee
of its appointment to act as Successor Preferred Securities Guarantee Trustee.
The right, title and interest of the Preferred Securities Guarantee Trustee
shall automatically vest in any Successor Preferred Securities Guarantee
Trustee, and such vesting and succession of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Preferred Securities
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be
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read into this Preferred Securities Guarantee against the Preferred Securities
Guarantee Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) and is actually known to a Responsible
Officer, the Preferred Securities Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Securities Guarantee Trustee from
liability for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Preferred Securities Guarantee, and
the Preferred Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be
read into this Preferred Securities Guarantee against the Pre-
ferred Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Securities Guarantee Trustee, the Preferred
Securities Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Preferred Securities Guarantee Trustee and conforming
to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished
to the Preferred Securities Guarantee Trustee, the Preferred
Securities Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Securities Guarantee Trustee shall not
be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Preferred
Securities Guarantee Trustee was negligent in
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ascertaining the pertinent facts upon which such judgment was made;
(iii) the Preferred Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee, or exercising
any trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Securities Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee may be sufficiently evidenced by
an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Preferred
Securities Guarantee Trustee (unless other evidence is herein
specifically pre- scribed) may, in the absence of bad faith on its
part,
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request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Preferred Securities Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or
any of its Affiliates and may include any of its employees. The
Preferred Securities Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers vested in
it by this Preferred Securities Guarantee at the request or direction
of any Holder, unless such Holder shall have provided to the Preferred
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Preferred Securities Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Securities Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Preferred Securities Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Preferred
Securities Guarantee.
(vii) The Preferred Securities Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit.
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(viii) The Preferred Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Preferred Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Securities Guarantee
Trustee or its agents hereunder shall bind the Holders, and the
signature of the Preferred Securities Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Preferred Securities Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Securities Guarantee Trustee's or its agent's taking
such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Securities Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Preferred Securities Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Preferred Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred
Securities Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Preferred
Securities Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive
power or authority available to the Preferred Securities Guarantee
Trustee shall be construed to be a duty.
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SECTION 3.3. Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee
The recitals contained in this Preferred Securities Guarantee
shall be taken as the statements of the Guarantor, and the Preferred Securities
Guarantee Trustee does not assume any responsibility for their correctness.
The Preferred Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
Preferred SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 25 million U.S. dollars ($25,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Securities Guarantee
Trustee shall cease to be eligible to so act under Section 4.1(a), the
Preferred Securities Guarantee Trustee shall immediately resign in the manner
and with the effect set out in Section 4.2(c).
(c) If the Preferred Securities Guarantee Trustee has or
shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Preferred Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
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SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Preferred Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not
be removed in accordance with Section 4.2(a) until a Successor Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Preferred
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold
office until a Successor Preferred Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d) If no Successor Preferred Securities Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of removal or
resignation, the Preferred Securities Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of a
Successor Preferred Securities Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Preferred Securities Guarantee Trustee.
(e) No Preferred Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Preferred Securities
Guarantee Trustee.
(f) Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Securities Guarantee
Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
Securities Guarantee Trustee all amounts due to the Preferred Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
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, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures 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 Preferred
Securities, or any action
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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
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Securities
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Securities Guarantee Trustee fails
to enforce such Preferred Securities Guarantee, any Holder may institute a
legal proceeding directly against the Guarantor to enforce the Preferred
Securities Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Preferred Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
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This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to such Holders
by the Guarantor under this Preferred Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory provi-
sions of law) be entitled to enforce or exercise any right that it may acquire
by way of subrogation or any indemnity, reimbursement or other agreement, in
all cases as a result of payment under this Preferred Securities Guarantee, if,
at the time of any such payment, any amounts are due and unpaid under this
Preferred Securities Guarantee. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor's capital stock (which includes common and preferred stock) or
(other than (a) dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of, common stock of the Guarantor,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) as a result of a reclassification of one class or series of the Guarantor's
capital stock solely into another class or series of the Guarantor's capital
stock, (d) the purchase of fractional interests in shares of the Guarantor's
capital stock resulting from such a classification pursuant to the conversion
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or exchange provisions of such capital stock or any security convertible into
or exchangeable for shares of the Guarantor's capital stock, and (e) purchases
of common stock related to the issuance of common stock or rights under any of
the Guarantor's benefit plans for its directors, officers or employees or any
of the Guarantor's dividend reinvestment plans), (ii) make any payment of
principal of, or premium, if any, or interest on, or repay, repurchase or
redeem any debt securities of the Guarantor (including any Other Debentures)
that rank pari passu with or junior in right of payment to the Debentures or
(iii) make any guarantee payments with respect to any guarantee (other than
payments under the Preferred Securities Guarantee or the Common Guarantee) by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in right of payment to the Debentures (, if at such time (i) there shall have
occurred any event of which the Guarantor has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would be an Indenture
Event of Default and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (ii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or (iii) the Guarantor
shall have given notice of its election of the exercise of its right to extend
the interest payment period pursuant to Section 16.01 of the Indenture and any
such extension shall be continuing.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior Indebtedness (as defined in the Indenture), to
the same extent and in the same manner that the Debentures are subordinated to
Senior Indebtedness pursuant to the Indenture, (ii) pari passu with the Deben-
tures, the Other Debentures, the Common Securities Guarantee, any Other Common
Securities Guarantee and any Other Guarantee, and (iii) senior to the
Guarantor's capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate (i) upon
full payment of the Redemption Price (as defined in the Declaration) of all
Preferred Securities or (ii) upon liquidation of the Issuer, the full payment
of the amounts payable in accordance with the Declaration or the distribution
of the Debentures to the Holders and the holders of the Common Securities.
Notwithstanding
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the foregoing, this Preferred Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid under the Preferred Securities or under
this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, expense, liability, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Series A
Preferred Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Preferred Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined). The provisions of
the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustee at the Issuer's mailing address set forth below (or such other address
as the Issuer may give notice of to the Holders and the Preferred Securities
Guarantee Trustee):
Sterling Bancshares Capital Trust I
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxx
Administrative Trustee
Telecopy: (000) 000-0000
(b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give
notice of to the Holders and the Issuer):
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Corporate Trustee
Administration Department
Telecopy: (000) 000-0000
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders and the Preferred Securities Guarantee Trustee):
Sterling Bancshares, Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxx
President and CEO
Telecopy: (000) 000-0000
(d) If given to any Holder, at the address set forth on
the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit
of the Holders and, subject to Section 3.1(a), is not separately transferable
from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. EACH OF THE
GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY: (A) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF
NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BY ANY HOLDER, OR
ITS SUCCESSORS RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED
HEREBY; (B) WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION; AND (C) AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. EACH OF THE GUARANTOR AND THE TRUSTEE
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT
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IN AN INCONVENIENT FORUM. THIS SECTION 9.5 SHALL NOT PRECLUDE ANY SUIT, ACTION
OR PROCEEDING BY THE GUARANTOR OR THE TRUSTEE AGAINST ANY HOLDER OR ITS
SUCCESSORS RELATED TO THIS AGREEMENT IN ANY OTHER COURT OF COMPETENT
JURISDICTION.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
STERLING BANCSHARES, INC., as Guarantor
By:
----------------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as
Preferred Securities Guarantee Trustee
By:
----------------------------------------------
Name:
Title:
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