FORM OF
CAPITAL SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
QUAD CITY HOLDINGS, INC.
AND
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
DATED AS OF ______ __, 1999
TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . . . .
Section 1.1. Definitions and Interpretation. . . . . . . . . . . . . .
ARTICLE II
TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2.1. Trust Indenture Act; Application . . . . . . . . . . . . .
Section 2.2. Lists of Holders of Securities . . . . . . . . . . . . . .
Section 2.3. Reports by the Capital Guarantee Trustee . . . . . . . . .
Section 2.4. Periodic Reports to Capital Guarantee Trustee. . . . . . .
Section 2.5. Evidence of Compliance with Conditions Precedent . . . . .
Section 2.6. Events of Default; Waiver. . . . . . . . . . . . . . . . .
Section 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . .
Section 2.8. Conflicting Interests. . . . . . . . . . . . . . . . . . .
ARTICLE III
POWERS, DUTIES AND RIGHTS OF CAPITAL GUARANTEE TRUSTEE. . . . . . . . .
Section 3.1. Powers and Duties of the Capital Guarantee Trustee . . . .
Section 3.2. Certain Rights of Capital Guarantee Trustee. . . . . . . .
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee. . .
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . .
Section 4.1. Capital Guarantee Trustee; Eligibility . . . . . . . . . .
Section 4.2. Appointment, Removal and Resignation of Capital
Guarantee Trustees . . . . . . . . . . . . . . . . . . . .
ARTICLE V
GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . . . .
Section 5.3. Obligations not Affected . . . . . . . . . . . . . . . . .
Section 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . . . .
Section 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . .
Section 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . . . .
Section 5.7. Independent Obligations. . . . . . . . . . . . . . . . . .
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION . . . . . . . . . . . . . . .
Section 6.1. Limitation of Transactions. . . . . . . . . . . . . . . .
Section 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 8.1 Exculpation. . . . . . . . . . . . . . . . . . . . . . . .
Section 8.2 Indemnification. . . . . . . . . . . . . . . . . . . . . .
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . .
Section 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . .
Section 9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .
Section 9.4 Benefit. . . . . . . . . . . . . . . . . . . . . . . . . .
Section 9.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . .
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CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
------------------------------------------------------------------------------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1, 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1, 3.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1, 2.6, 5.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..1(a)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(b)
Note: This Cross-Reference Table does not constitute part of this Agreement
and shall not affect the interpretation of any of its terms or provisions.
iii
CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT (this "Capital Securities
Guarantee"), dated as of ________ __, 1999, is executed and delivered by QUAD
CITY HOLDINGS, INC, an Delaware corporation (the "Guarantor"), and FIRST UNION
TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Capital Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of Quad
City Holdings Capital Trust I, a Delaware statutory business trust (the
"Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of [ ], 1999, among the trustees of the Trust named
therein, the Guarantor, as depositor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
on the date hereof up to 1,200,000 Capital securities, having an aggregate
liquidation amount of $12,000,000, designated the [ ]% Cumulative Trust
Capital Securities (the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Capital Securities Guarantee, to pay to the Holders of the
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 Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Capital Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Capital Securities Guarantee, unless the context otherwise
requires:
1
(a) capitalized terms used in this Capital Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Trust Agreement as at the date of execution of
this Capital Securities Guarantee have the same meaning when used in this
Capital Securities Guarantee, unless otherwise defined in this Capital
Securities Guarantee;
(c) a term defined anywhere in this Capital Securities Guarantee has the
same meaning throughout;
(d) all references to "the Capital Securities Guarantee" or "this Capital
Securities Guarantee" are to this Capital Securities Guarantee as modified,
supplemented or amended from time to time;
(e) all references in this Capital Securities Guarantee to Articles and
Sections are to Articles and Sections of this Capital Securities Guarantee,
unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Capital Securities Guarantee, unless otherwise defined in this
Capital Securities Guarantee or unless the context otherwise requires; and
(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 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday, a day on which
federal or state banking institutions in New York, New York or Wilmington,
Delaware are authorized or required by law, executive order or regulation to
close or a day on which the Corporate Trust Office of the Capital Guarantee
Trustee is closed for business.
"Capital Guarantee Trustee" means First Union Trust Company, National
Association, until a Successor Capital Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Capital Securities
Guarantee and thereafter means each such Successor Capital Guarantee Trustee.
"Corporate Trust Office" means the office of the Capital Guarantee Trustee
at which the corporate trust business of the Capital Guarantee Trustee shall,
at any particular time, be principally administered, which office at the date
of execution of this Agreement is located at One Xxxxxx Square, 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debentures" means the ____% Subordinated Debentures due June 30, 2029, of
the Debenture Issuer held by the Property Trustee of the Trust.
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"Debenture Issuer" means Quad City Holdings, Inc., issuer of the
Debentures under the Indenture.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Capital Securities Guarantee.
"Guarantor" means Quad City Holdings, Inc., a Delaware corporation.
"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 Trust: (i) any accrued and unpaid Distributions (as
defined in the Trust Agreement) that are required to be paid on such Capital
Securities, to the extent the Trust shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), to the extent the Trust has
funds available therefor, with respect to any Capital Securities called for
redemption by the Trust, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange for Capital
Securities as provided in the Trust Agreement), 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 Trust
shall have funds available therefor (the "Liquidation Distribution"), and (b)
the amount of assets of the Trust remaining available for distribution to
Holders in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor, the Capital Guarantee Trustee or
any of their respective Affiliates.
"Indemnified Person" means the Capital Guarantee Trustee, any Affiliate
of the Capital Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of the Capital Guarantee Trustee.
"Indenture" means the Indenture dated as of [ ], 1999, among the
Debenture Issuer and First Union Trust Company, National Association, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Property Trustee of the Trust.
"Liquidation Amount" means the stated value of $10 per Capital Security.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"Majority in liquidation amount of the Capital Securities" means the
holders of more than 50% of the Liquidation Amount of all of the Capital
Securities.
3
"Officers' Certificate" means, with respect to any Person, a certificate
igned by two authorized officers of such Person, at least one of whom shall be
the principal executive officer, principal financial officer, principal
accounting officer, treasurer or any vice president of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
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.
"Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Capital Guarantee
Trustee, any officer within the Corporate Trust Office of the Capital
Guarantee Trustee with direct responsibility for the administration of this
Capital Securities Guarantee, including any vice-president, any assistant
vice-president, any assistant secretary or other officer or assistant officer
of the Capital Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Capital Guarantee Trustee" means a successor Capital
Guarantee Trustee possessing the qualifications to act as Capital Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
4
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Capital
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Capital Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) In the event the Capital Guarantee Trustee is not also acting in
the capacity of the Property Trustee under the Trust Agreement, the Guarantor
shall cause to be provided to the Capital Guarantee Trustee with a list, in
such form as the Capital Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Capital Securities ("List of
Holders") as of the date (i) within 5 Business Days after the last day of
March, June, September and December, 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 15 days before such List of Holders is given to the
Capital 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 caused to have been
given to the Capital Guarantee Trustee by the Guarantor. The Capital
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Capital Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE CAPITAL GUARANTEE TRUSTEE.
On or before July 15 of each year, the Capital Guarantee Trustee shall
provide to the Holders of the Capital Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Capital
Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO CAPITAL GUARANTEE TRUSTEE.
The Guarantor shall provide to the Capital Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by
5
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.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Capital Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Capital Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Capital Securities
may, by vote, on behalf of 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 any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Capital 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 Capital Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice; provided, that, except in the case of a default by Guarantor on any
of its payment obligations, the Capital Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Capital 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 Capital Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Capital Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Capital
Guarantee Trustee charged with the administration of the Trust Agreement
shall have obtained actual knowledge.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Capital Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF CAPITAL GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE CAPITAL GUARANTEE TRUSTEE.
(a) This Capital Securities Guarantee shall be held by the Capital
Guarantee Trustee for the benefit of the Holders of the Capital Securities,
and the Capital Guarantee Trustee shall not transfer this Capital Securities
Guarantee to any Person except a Holder of Capital Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Capital Guarantee
Trustee on acceptance by such Successor Capital Guarantee Trustee of its
appointment to act as Successor Capital Guarantee Trustee. The right, title
and interest of the Capital Guarantee Trustee shall automatically vest in any
Successor Capital 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 Capital Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Guarantee Trustee has occurred and is continuing, the Capital
Guarantee Trustee shall enforce this Capital Securities Guarantee for the
benefit of the Holders of the Capital Securities.
(c) The Capital Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Capital 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 of the Capital Guarantee Trustee, the Capital Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Capital
Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Capital Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(i) the duties and obligations of the Capital Guarantee Trustee
shall be determined solely by the express provisions of
this Capital Securities Guarantee, and the Capital
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Capital Securities
7
Guarantee, and no implied covenants or obligations shall
be read into this Capital Securities Guarantee against the
Capital Guarantee Trustee; and
(ii) in the absence of bad faith on the part of the Capital
Guarantee Trustee, the Capital Guarantee Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Guarantee
Trustee and conforming to the requirements of this Capital
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Capital
Guarantee Trustee, the Capital Guarantee Trustee shall be
under a duty to examine the same to determine whether or
not they conform to the requirements of this Capital
Securities Guarantee;
(b) the Capital Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Capital Guarantee Trustee, unless it shall be proved that the
Capital Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(c) the Capital Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Capital Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Capital Guarantee
Trustee, or exercising any trust or power conferred upon the
Capital Guarantee Trustee under this Capital Securities
Guarantee; and
(d) no provision of this Capital Securities Guarantee shall require
the Capital Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if the Capital Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under
the terms of this Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF CAPITAL GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Capital Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon,
any resolution,
8
certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Capital Securities Guarantee shall be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever, in the administration of this Capital Securities
Guarantee, the Capital Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Capital Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) the Capital Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof);
(v) the Capital Guarantee Trustee may consult with counsel, and
the written 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 Capital Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration
of this Capital Securities Guarantee from any court of
competent jurisdiction;
(vi) the Capital Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Capital Securities Guarantee at the request or direction of
any Holder, unless such Holder shall have provided to the
Capital Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Capital Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Capital Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Capital Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital
Guarantee Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in
it by this Capital Securities Guarantee;
9
(vii) the Capital Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Capital Guarantee Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Capital Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or
attorneys, and the Capital Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Capital Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Capital Guarantee Trustee
or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to
inquire as to the authority of the Capital Guarantee Trustee
to so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Guarantee
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Capital Securities
Guarantee the Capital Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Capital Guarantee Trustee (i) may request instructions from
the Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions.
(b) No provision of this Capital Securities Guarantee shall be deemed to
impose any duty or obligation on the Capital Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it
shall be illegal, or in which the Capital Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power,
duty or obligation. No permissive power or authority available to
the Capital Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. 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 Capital Guarantee Trustee does not assume any
responsibility for their correctness. The Capital Guarantee Trustee makes no
representation as to the validity or sufficiency of this Capital Securities
Guarantee.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1. CAPITAL GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Capital 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 $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
4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Capital Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Capital Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital 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 CAPITAL GUARANTEE
TRUSTEES.
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Capital Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall hold
office until a Successor Capital Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Capital Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Capital
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital Guarantee Trustee.
(d) If no Successor Capital Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Capital Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Capital Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Capital Guarantee Trustee.
(e) No Capital Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Capital Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee or
removal or resignation of the Capital Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Capital Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have
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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 Trust to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Capital
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Capital Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, 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 payment of Distributions, Redemption Price, Liquidation
Distribution or other sum 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 Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) any failure or omission to receive any regulatory approval or
consent required in connection with the Capital Securities (or the common
equity securities issued by the Trust),
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including the failure to receive any approval of the Board of Governors of
the Federal Reserve System required for the redemption of the Capital
Securities;
(g) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; 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 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 5.4. RIGHTS OF HOLDERS.
(a) Subject to Section 5.4(b), the Holders of a Majority in liquidation
amount of the Capital Securities have the right to direct the time, method
and place of conducting of any proceeding for any remedy available to the
Capital Guarantee Trustee in respect of this Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Guarantee Trustee
under this Capital Securities Guarantee.
(b) Any Holder of Capital Securities may institute and prosecute a
legal proceeding directly against the Guarantor to enforce its rights under
this Capital Securities Guarantee without first instituting a legal
proceeding against the Trust, the Capital Guarantee Trustee or any other
Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Capital Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Trust in respect of any amounts paid to
such Holders by the Guarantor under this Capital Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Capital Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
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SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
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 Capital Securities remain outstanding, if there shall
have occurred an Event of Default under this Capital Securities Guarantee, an
event of default under the Trust Agreement or during an Extended Interest
Payment Period (as defined in the Indenture), then (a) the Guarantor shall
not declare or pay any dividend on, make any distributions with respect to,
or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than as a result of a reclassification of its
capital stock for another class of its capital stock) and (b) the Guarantor
shall not make any payment of interest or principal on or repay, repurchase
or redeem any debt securities issued by the Guarantor which rank pari passu
with or junior to the Debentures.
SECTION 6.2 RANKING.
This Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior
Obligations, as defined in the Indenture, of the Guarantor, to the extent and
in the manner set forth in the Indenture, and the applicable provisions of
the Indenture will apply, in all relevant respects, to the obligations of the
Guarantor hereunder.
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ARTICLE VII
TERMINATION
Section 7.1. TERMINATION.
This Capital Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Capital Securities, (ii) upon full payment of
the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust, or (iii) upon distribution of the Debentures to the Holders of
the Capital Securities. Notwithstanding the foregoing, this Capital
Securities Guarantee shall continue to be effective or shall 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
Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Capital Securities Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred
on such Indemnified Person by this Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence 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 of Capital
Securities might properly be paid.
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SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability 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 Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Capital Securities 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 Capital Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in Liquidation Amount of
the Capital Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of Holders of the Capital Securities apply to the
giving of such approval.
SECTION 9.3. NOTICES.
All notices provided for in this Capital Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
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(a) If given to the Capital Guarantee Trustee, at the Capital Guarantee
Trustee's mailing address set forth below (or such other address as the Capital
Guarantee Trustee may give notice of to the Holders of the Capital Securities):
First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(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):
Quad City Holdings, Inc.
0000 0xx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, President
(c) If given to any Holder of Capital Securities, at the address set
forth on the books and records of the Trust. 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 Capital Securities Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5. GOVERNING LAW.
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
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This Capital Securities Guarantee is executed as of the day and year first
above written.
QUAD CITY HOLDINGS, INC, as Guarantor
By:___________________________________
Its:__________________________________
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Capital Guarantee
Trustee
By:___________________________________
Its:__________________________________
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