Exhibit 4.20
GUARANTEE AGREEMENT
by and between
THE SOUTH FINANCIAL GROUP, INC.
as Guarantor
and
[ ]
as Guarantee Trustee
relating to
TSFG CAPITAL TRUST [ ]
Dated as of
--------------
THE SOUTH FINANCIAL GROUP, INC.
Reconciliation and tie between Trust Indenture Act of 1939
and Guarantee Agreement,
dated as of _______________, 2004
Trust Indenture arantee Section
Act Section
-------------------- ----------------
ss. 310(a) 4.1(a)
(b) 2.8, 4.1(c)
(c) Not applicable
ss. 311(a) 2.2(b)
(b) 2.2(b)
(c) Not applicable
ss. 312(a) 2.2(a)
(b) 2.2(b)
ss. 313 2.3
ss. 314(a) 2.4
(b) Not applicable
(c) 2.5
(d) Not applicable
(e) 1.1, 2.5, 3.2
(f) 2.1, 3.2
ss. 315(a) 3.1(d)(i)
(b) 2.7
(c) 3.1(c)
(d) 3.1(d)
(e) Not applicable
ss. 316(a) 1.1, 2.6, 5.4
(b) 5.4
(c) 5.4, 8.2
ss. 317(a) 3.1(b)
(b) Not applicable
ss. 318(a) 2.1
(b) 2.1
(c) 2.1
Note: This reconciliation and tie shall not, for any purpose be deemed to be
part of the Guarantee Agreement.
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Table of Contents
ARTICLE I DEFINITIONS 1
SECTION 1.1. Definitions 1
ARTICLE II TRUST INDENTURE ACT 4
SECTION 2.1. Trust Indenture Act; Application 4
SECTION 2.2. List of Holders 4
SECTION 2.3. Reports by the Guarantee Trustee 4
SECTION 2.4. Periodic Reports to the Guarantee Trustee 4
SECTION 2.5. Evidence of Compliance with Conditions Precedent 4
SECTION 2.6. Events of Default; Waiver 4
SECTION 2.7. Event of Default; Notice 5
SECTION 2.8. Conflicting Interests 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 5
SECTION 3.1. Powers and Duties of the Guarantee Trustee 5
SECTION 3.2. Certain Rights of Guarantee Trustee 6
SECTION 3.3. Compensation; Indemnity; Fees 7
ARTICLE IV GUARANTEE TRUSTEE 8
SECTION 4.1. Guarantee Trustee; Eligibility 8
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee 8
ARTICLE V GUARANTEE 9
SECTION 5.1. Guarantee 9
SECTION 5.2. Waiver of Notice and Demand 9
SECTION 5.3 Obligations Not Affected 9
SECTION 5.4. Rights of Holders 10
SECTION 5.5. Guarantee of Payment 10
SECTION 5.6. Subrogation 10
SECTION 5.7. Independent Obligations 10
ARTICLE VI COVENANTS AND SUBORDINATION 10
SECTION 6.1. Subordination 10
SECTION 6.2. Pari Passu Guarantees 10
ARTICLE VII TERMINATION
SECTION 7.1 Termination 11
ARTICLE VIII MISCELLANEOUS 11
SECTION 8.1. Successors and Assigns 11
SECTION 8.2. Amendments 11
SECTION 8.3. Notices 11
SECTION 8.4. Benefit 12
SECTION 8.5. Governing Law 12
SECTION 8.6. Counterparts 12
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GUARANTEE AGREEMENT, dated as of , between THE SOUTH FINANCIAL GROUP,
INC., a South Carolina corporation (the "Guarantor"), having its principal
office at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and , as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
TSFG CAPITAL TRUST [ ], a Delaware statutory trust (the "Issuer Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement, of even date
herewith (the "Trust Agreement"), among The South Financial Group, Inc., as
Sponsor, the Depositor, the Property Trustee, the Delaware Trustee, and the
Administrative Trustees (each as named therein) and the holders from time to
time of undivided beneficial interests in the assets of the Issuer Trust, the
Issuer Trust is issuing $ aggregate Liquidation Amount (as defined in the Trust
Agreement) of its [ ]% Preferred Securities (liquidation amount $[ ] per capital
security) (the "Preferred Securities"), representing preferred undivided
beneficial interests in the assets of the Issuer Trust and having the terms set
forth in the Trust Agreement; and
WHEREAS, the Preferred Securities will be issued by the Issuer Trust, and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Debentures (as defined herein), which Debentures will be deposited with , as
Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred 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 of Preferred Securities
by each Holder, which purchase the Guarantor hereby acknowledges shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
For all purposes of this Guarantee Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally
accepted accounting principles;
(e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Guarantee Agreement; and
(f) The words "hereby," "herein," "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
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direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authorized Officer" of any Person means any executive officer of such
Person or any person authorized by or pursuant to a resolution of the Board of
Directors (or equivalent body) of such Person.
"Board of Directors" means the board of directors of the Guarantor or any
committee of the board of directors of the Guarantor, comprised of one or more
members of the board of directors of the Guarantor or officers of the Guarantor,
or both.
"Common Securities" shall have the meaning specified in the Trust
Agreement.
"Debentures" shall have the meaning specified in the Trust Agreement.
"Distributions" shall have the meaning specified in the Trust Agreement.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder and the continuation of such default
or breach for a period of 90 days after there has been given, by registered or
certified mail, to the Guarantor and the Guarantee Trustee by the Holders of at
least 25% in aggregate Liquidation Amount of the Outstanding Preferred
Securities a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder.
"Guarantee Agreement" means this Guarantee Agreement, as modified, amended
or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, to the extent the
Issuer Trust shall have funds on hand available therefor at such time; (ii) the
Redemption Price with respect to any Preferred Securities called for redemption
by the Issuer Trust, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; (iii) any amount due on or under any due xxxx
or other debt security issued by or on behalf of the Issuer Trust in respect of
any Preferred Security in accordance with the terms of such Preferred Security
and the Trust Agreement, to the extent the Issuer Trust shall have funds on hand
available therefore at such time; and (iv) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer Trust, other than in
connection with the distribution of Debentures to the Holders or the redemption
of the Preferred Securities, the lesser of (a) the Liquidation Distribution with
respect to the Preferred Securities, to the extent that the Issuer Trust shall
have funds on hand available therefor at such time, and (b) the amount of assets
of the Issuer Trust remaining available for distribution to Holders on
liquidation of the Issuer Trust.
"Guarantee Trustee" means , solely in its capacity as Guarantee Trustee
and not in its individual capacity, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement, and thereafter means each such Successor Guarantee Trustee.
"Guarantor" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any
Preferred Securities; 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,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.
"Indenture" shall have the meaning specified in the Trust Agreement.
"Issuer Trust" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"Junior Subordinated Indenture" means the Form of Junior Subordinated
Indenture set forth in Exhibit [4.16] to the Registration Statement on Form S-3
of The South Financial Group, Inc. filed with the U.S. Securities and Exchange
Commission and having the Reg. No. 333-[_________].
"Liquidation Distribution" shall have the meaning specified in the Trust
Agreement.
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"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, Preferred Securities representing more
than 50% of the aggregate Liquidation Amount (as defined in the Trust Agreement)
of all Preferred Securities then Outstanding (as defined in the Trust
Agreement).
"Officers' Certificate" means, with respect to any Person, a certificate
signed by any two Authorized Officers of such person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers'
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, statutory or business trust, unincorporated
association, or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
"Preferred Securities" has the meaning specified in the recitals to this
Guarantee Agreement.
"Redemption Price" shall have the meaning set forth in the Trust
Agreement.
"Responsible Officer" means, with respect to the Guarantee Trustee, the
President, any Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee and also means, with
respect to a particular matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Guarantee Agreement was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939, as so amended.
"Vice President," when used with respect to the Guarantor, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
Except as otherwise expressly provided herein, the Trust Indenture Act
shall apply as a matter of contract to this Guarantee Agreement for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Guarantee Agreement, the Guarantor and the Guarantee Trustee shall be
deemed for all purposes hereof to be subject to and governed by the Trust
Indenture Act to the same extent as would be the case if this Guarantee
Agreement were qualified under the Trust Indenture Act on the date hereof.
Except as otherwise expressly provided herein, if and to the extent that any
provision of this Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31
of each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders (a "List of Holders")
as of a date not more than 15 days prior to the delivery thereof, and (b)
at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a
List of Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is in the
possession or control of the Guarantor and has not otherwise been received
by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Guarantee Trustee shall comply with the requirements of
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Within 60 days after [May 15] each year, commencing [May 15], , the
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. If this Guarantee Agreement
shall have been qualified under the Trust Indenture Act, the Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act, provided that such documents, reports
and information shall be required to be provided to the Securities and Exchange
Commission only if this Guarantee Agreement shall have been qualified under the
Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor 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 at least a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
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any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 30 days after the occurrence
of an Event of Default known to the Guarantee Trustee, transmit by mail,
first class postage prepaid, to the Holders, notice of any such Event of
Default known to the Guarantee Trustee, unless such Event of Default has
been cured before the giving of such notice, provided that, except in the
case of a default in the payment of a Guarantee Payment, the Guarantee
Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests
of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the administration
of this Guarantee Agreement shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
In the case of a default by the Guarantor in any of its payment obligations or
any other obligor on such payment obligations under this Guaranty Agreement, the
Guarantee Trustee may recover judgment in its own name and as trustee of an
express trust against the Guarantor or such other obligor for the whole of any
amounts remaining unpaid. In case of any judicial proceeding relative to the
Guarantor or any other obligor upon the Guarantee Payments or the property of
the Guarantor or of such other obligor or their creditors, the Guarantee Trustee
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise to file and prove a claim and file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Guarantee Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Guaranty Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the Guarantee
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Guarantee Agreement (including pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement (but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture Act
are specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Guarantee Agreement);
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) subject to Section 3.1(b), no provision of this Guarantee
Agreement shall require the Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
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(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder unless such Holder shall have
provided to the Guarantee Trustee such adequate security and indemnity
satisfactory to it against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; provided that nothing contained in
this Section (a)(v) shall be taken to relieve the Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit at the expense of the Guarantor and shall
incur no liability of any kind by reason of such inquiry or investigation.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in
which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a
duty to act in accordance with such power and authority.
SECTION 3.3. Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
reasonable compensation for all services rendered by it hereunder as may
be agreed by the Guarantor and the Guarantee Trustee from time to time
(which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by the Guarantee Trustee in accordance with
any provision of this Guarantee Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as shall be
determined to have been caused by its own negligence or bad faith; and
(c) to indemnify the Guarantee Trustee, any Affiliate of the
Guarantee Trustee and any officer, director, shareholder, employee,
representative or agent of the Guarantee Trustee (each, an "Indemnified
Person") for, and to hold each Indemnified Person harmless against, any
loss, liability, claim, damage or expense incurred without negligence,
willful misconduct or bad faith on the part of the Indemnified Person,
arising out of or in connection with the acceptance or administration of
this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
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The provisions of this Section 3.3 shall survive the termination of this
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of its supervising or
examining authority, then, for the purposes of this Section 4.1 and
to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(c), the Guarantee Trustee may be
appointed or removed at any time by the action of the Holders of a
Majority in Liquidation Amount of the Preferred Securities delivered to
the Guarantee Trustee and the Guarantor (i) for cause or (ii) if a
Debenture Event of Default (as defined in the Trust Agreement) shall have
occurred and be continuing at any time.
(b) Subject to Section 4.2(c), the Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by giving written
notice thereof to the Holders and the Guarantor and by appointing a
successor Guarantee Trustee. The Guarantee Trustee shall appoint a
successor by requesting from at least three Persons meeting the
requirements of Section 4.1(a) their expenses and charges to serve as the
Guarantee Trustee, and selecting the Person who agrees to the lowest
expenses and charges.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed and shall
have accepted such appointment. No removal or resignation of a Guarantee
Trustee shall be effective until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed
by such Successor Guarantee Trustee and delivered to the Guarantor and, in
the case of any resignation, the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Holders and the Guarantor of a notice of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor,
any court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.
(e) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable
of acting as Guarantee Trustee and a replacement shall not be appointed
prior to such resignation or removal, or if a vacancy shall occur in the
office of Guarantee Trustee for any cause, the Holders of the Preferred
Securities, by the action of the Holders of record of not less than 25% in
aggregate Liquidation Amount (as defined in the Trust Agreement) of the
Preferred Securities then Outstanding (as defined in the Trust Agreement)
delivered to such Guarantee Trustee, may appoint a Successor Guarantee
Trustee or Trustees. If no successor Guarantee Trustee shall have been so
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appointed by the Holders of the Preferred Securities and accepted
appointment, any Holder, on behalf of such Holder and all others similarly
situated, or any other Guarantee Trustee, may petition any court of
competent jurisdiction for the appointment of a successor Guarantee
Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as provided in the Indenture), 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;
(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 on the part of the Issuer Trust granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Issuer Trust or any
of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other
than payment of the underlying obligation), it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
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SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person. Notwithstanding any other provision of this Guarantee
Agreement, the Right of any Holder to receive any Guarantee Payment on or after
its due date or to institute suit for the enforcement of any such payment on or
after the applicable due date, shall not be impaired or affected without the
consent of that Holder. The provisions of Article VI of the Trust Agreement
concerning acts, meetings and voting of Holders shall apply to any act, meeting
or voting of Holders required or permitted under this Guaranty Agreement.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer Trust with respect to the 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 Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Junior
Subordinated Indenture) of the Guarantor to the extent and in the manner set
forth in the Junior Subordinated Indenture with respect to the Debt Securities
(as defined therein), and the provisions of Article Eighteen of the Junior
Subordinated Indenture will apply, mutatis mutandis, to the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder do not
constitute Senior Debt (as defined in the Junior Subordinated Indenture) of the
Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall rank
pari passu with the obligations of the Guarantor under (i) any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred or
capital securities issued by any statutory trust, (ii) any guarantees issued by
the Guarantor under any indenture for debt securities of any limited liability
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company in the form filed as Exhibit [4.24] to the registration statement on
Form S-3 of The South Financial Group, Inc. (Reg. No. 333-[__________]), (iii)
the Junior Subordinated Indenture and the Debt Securities (as defined therein)
issued thereunder, (iv) any expense agreements entered into by the Guarantor in
connection with the offering of preferred or capital securities by any statutory
trust, and (v) any other security, guarantee or other agreement or obligation
that is expressly stated to rank pari passu with the obligations of the
Guarantor under this Guarantee Agreement or with any obligation that ranks pari
passu with the obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with Article IX of the Trust Agreement upon liquidation of the Issuer
Trust. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder is required to repay any sums paid with respect to Preferred Securities
or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number as the Guarantor may
give notice to the Guarantee Trustee and the Holders:
The South Financial Group, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
(b) if given to the Guarantee Trustee, to the address or telecopy
number set forth below or such other address or telecopy number as the
Guarantee Trustee may give notice to the Guarantor and Holders:
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with a copy to:
TSFG Capital Trust [ ]
c/o The South Financial Group, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
(c) if given to any Holder, at the address set forth on the books
and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.6. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.
THE SOUTH FINANCIAL GROUP, INC., as Guarantor
By:
---------------------------------------
Name:
Title:
,
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as Guarantee Trustee
By:
----------------------------------------
Name:
Title:
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