GUARANTEE AGREEMENT
UNION NATIONAL FINANCIAL CORPORATION
Dated as of October 14, 2004
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................... 1
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee....... 4
SECTION 2.2 Certain Rights of the Guarantee Trustee.......... 5
SECTION 2.3 Not Responsible for Recitals or Issuance
of Guarantee .................................... 7
SECTION 2.4 Events of Default; Waiver........................ 7
SECTION 2.5 Events of Default; Notice........................ 8
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1 The Guarantee Trustee; Eligibility............... 8
SECTION 3.2 Appointment, Removal and Resignation
of the Guarantee Trustee..... ................... 9
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee ....................................... 9
SECTION 4.2 Waiver of Notice and Demand..................... 10
SECTION 4.3 Obligations Not Affected....................... 10
SECTION 4.4 Rights of Holders.............................. 11
SECTION 4.5 Guarantee of Payment........................... 11
SECTION 4.6 Subrogation.................................... 11
SECTION 4.7 Independent Obligations........................ 12
SECTION 4.8 Enforcement.................................... 12
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions..................... 12
SECTION 5.2 Ranking........................................ 13
ARTICLE VI
TERMINATION
SECTION 6.1 Termination.................................... 13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation.................................... 13
SECTION 7.2 Indemnification................................ 14
SECTION 7.3 Compensation; Reimbursement of Expenses ....... 15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns......................... 15
SECTION 8.2 Amendments..................................... 16
SECTION 8.3 Notices........................................ 16
SECTION 8.4 Benefit........................................ 16
SECTION 8.5 Governing Law.................................. 16
SECTION 8.6 Counterparts................ .................. 17
GUARANTEE AGREEMENT
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This GUARANTEE AGREEMENT (the "Guarantee"), dated as of
October 14, 2004, is executed and delivered by Union National
Financial Corporation, a bank holding company incorporated in
Pennsylvania (the "Guarantor"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Capital Securities (as defined herein)
of Union National Capital Trust II, a Delaware statutory trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration
of Trust (the "Declaration"), dated as of October 14, 2004, among
the trustees named therein of the Issuer, Union National
Financial Corporation, as sponsor, and the Holders from time to
time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof securities,
having an aggregate liquidation amount of $3,000,000, designated
in the Declaration as MMCapS sm (the "Capital Securities"); and
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Guarantee, to pay to the
Holders of Capital Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes
and delivers this Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
_______________________________
In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee 'but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in thisGuarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee"
are to this Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Guarantee to Articles and
Sections are to Articles and Sections of this Guarantee, unless
otherwise specified;
(e) terms defined in the Declaration as of the date of
execution of this Guarantee have the same meanings when used in
this Guarantee, unless otherwise defined in this Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Beneficiaries" means any Person to whom the Issuer is or
hereafter becomes indebted or liable.
"Common Securities" has the meaning specified in the
Declaration.
"Corporate Trust Office" means the office of the
Guarantee Trustee at which at any particular time its corporate
trust business shall be principally administered, which at all
times shall be located within the United States and at the time
of the execution of this Guarantee shall be Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000.
"Covered Person" means any Holder of Capital Securities.
"Debenture Issuer" means Union National Financial
Corporation or any successor entity resulting from any
consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Debentures.
"Debentures" means the junior subordinated debentures of the
Debenture Issuer that are designated in the Indenture as the
"Fixed/Floating Rate Junior Subordinated Debt Securities due 2034" and
held by the Institutional Trustee (as defined in the Declaration) of
the Issuer.
"Event of Default" has the meaning set forth in Section
2.4.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer: (i)
any accrued and unpaid Distributions (as defined in the
Declaration) which are required to be paid on such Capital
Securities to the extent the Issuer has funds available in the
Property Account (as defined in the Declaration) therefor at such
time, (ii) the price payable upon the redemption of any Capital
Securities to the extent the Issuer has funds available in the
Property Account therefor at such time, with respect to any
Capital Securities that are (1) called for redemption by the
Issuer or (2) mandatorily redeemed by the Issuer, in each case,
in accordance with the terms of such Capital Securities, and
(iii) upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount of the
Capital Securities and all accrued and unpaid Distributions on
the Capital Securities to the date of payment, to the extent the
Issuer has funds available in the Property Account therefor at
such time, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to
creditors of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until
a Successor Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any Person in whose name any Capital
Securities are registered on the books and records of the Issuer;
provided, however, that, in determining whether the
holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indemnified Person" means the Guarantee Trustee
(including in its individual capacity), any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture, dated as of October 14,
2004, between the Debenture Issuer and Wilmington Trust Company,
not in its individual capacity but solely as trustee, and any
indenture supplemental thereto pursuant to which the Debentures
are to be issued to the Institutional Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in
the definition of "Guarantee Payments" herein.
"Majority in liquidation amount of the Capital
Securities" means Holder(s) of outstanding Capital Securities,
voting together as a class, but separately from the holders of
Common Securities, of more than 50% of the aggregate liquidation
amount (including the amount that would be paid upon the
redemption, liquidation or otherwise on the date upon which
the voting percentages are determined, plus unpaid Distributions
accrued thereon to such date) of all Capital Securities then
outstanding.
"Obligations" means any costs, expenses or liabilities
(but not including liabilities related to taxes) of the Issuer,
other than obligations of the Issuer to pay to holders of any
Trust Securities the amounts due such holders pursuant to the
terms of the Trust Securities.
"Officer's Certificate" means, with respect to any
Person, a certificate signed by one Authorized Officer of such
Person. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Guarantee shall include:
(a) a statement that such officer signing the Officer's
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee with direct responsibility for the
o administration of any matters relating to this Guarantee,
including any vice president, any assistant vice president, any
secretary, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or other officer of the Corporate
Trust Office of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity
with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under Section 3.1.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee
Trustee for the benefit of the Holders of the Capital Securities,
and the Guarantee Trustee shall not transfer this Guarantee to
any Person except a Holder of Capital Securities exercising his
or her rights pursuant to Section 4.4 (b) or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have
been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is
continuing, the Guarantee Trustee shall enforce this
Guarantee for the benefit of the Holders of the Capital
Securities.
(c) The Guarantee Trustee, before the occurrence of any
Event of Default and alter the curing or waiving of all Events of
Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Guarantee, and
no implied covenants shall be read into this Guarantee against
the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.4(b))
and is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Guarantee, and use the same
degree of care and skilloin its
exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct or bad faith, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all Events of Default
that may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express
provisions of this Guarantee, and the Guarantee
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee, and no
implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of
any such certificates or opinions furnished to the
Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine
whether or not on their face they conform to the
requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be
proved that such Responsible Officer of the Guarantee
Trustee or the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
in good faith in accordance with the written direction of
the Holders of a Majority in liquidation amount of the
Capital Securities relating to the time, method and place
of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this
Guarantee; and
(iv) no provision of this Guarantee shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the
repayment of such funds is not reasonably assured to it
under the terms of this Guarantee, or security and
indemnity, reasonably satisfactory to the Guarantee
Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 2.2 Certain Rights of the Guarantee Trustee.
(a) Subject to the provisions of Section 2.1:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from
acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by
the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee shall be sufficiently
evidenced by an Officer's Certificate.
(iii) Whenever, in the administration of this
Guarantee, the Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officer's
Certificate of the Guarantor which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any
instrument or other writing (or any rerecording, refiling
or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such
counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The
Guarantee Trustee shall have the right at any time to
seek instructions concerning the administration of this
Guarantee from any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested
in it by this Guarantee at the request or direction of
any Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the
expenses of the Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it
in complying with such request or direction, including
such reasonable advances as may be requested by the
Guarantee Trustee; provided, however, that nothing
contained in this Section 2.2(a)(vi) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
nominees, custodians or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or
its agents hereunder shall bind the Holders of the
Capital Securities, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party
shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee, both
of which shall be conclusively evidenced by the Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee
the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
Trustee (A) may request instructions from the Holders of
a Majority in liquidation amount of the Capital
Securities, (B) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received and (C) shall be protected in conclusively
relying on or acting in accordance with such
instructions.
(xi) The Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights-or powers
conferred upon it by this Guarantee.
(b) No provision of this Guarantee shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall
be illegal or in which the Guarantee Trustee shall be unqualified
or incompetent in accordance with applicable law to perform any
such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty.
SECTION 2.3 Not Responsible for Recitals or Issuance of
Guarantee.
The recitals contained in this Guarantee shall be taken
as the statements of the Guarantor, and the Guarantee Trustee
does not assume any responsibility for their correctness.
The Guarantee Trustee makes no representation as to the validity
or sufficiency of this Guarantee.
SECTION 2.4 Events of Default; Waiver.
(a) An "Event of Default" under this Guarantee will
occur upon the failure of the Guarantor to perform any of its
payment or other obligations hereunder.
(b) The Holders of a Majority in liquidation amount of
the Capital Securities may, voting or consenting as a class, on
behalf of the Holders of all of the Capital Securities,
waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and shall
be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent
thereon.
SECTION 2.5 Events of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Capital
Securities, notices of all Events of Default actually known to a
Responsible Officer of the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice,
provided, however, that the Guarantee Trustee shall be protected
in withholding such-notice ifand so long as a Responsible Officer
of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of
the Capital Securities.
(b) The Guarantee Trustee shall not be charged with
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice thereof from the Guarantor or
a Holder of the Capital Securities, or a Responsible Officer of
the Guarantee Trustee charged with the administration of this
Guarantee shall have actual knowledge thereof.
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1 The Guarantee Trustee; Eligibility.
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(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or national association
organized and doing business under the laws of the United
States of America or any state thereof or of the District
of Columbia, or Person authorized under such laws to
exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination
by federal, state or District of Columbia authority. If
such Corporation or national association publishes
reports of condition at least annually, pursuant to law
or to the requirements of the supervising or "examining
authority referred to above, then, for the purposes of
this Section 3.l(a)(ii), the combined capital and surplus
of such corporation or national association shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 3.1 (a), the Guarantee Trustee
shall immediately resign in the manner and with the
effect set forth in Section 3.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee shall
either eliminate such interest or resign to the extent and in the
manner provided by, and subject to, this Guarantee.
SECTION 3.2 Appointment. Removal and Resignation of
the Guarantee Trustee.
(a) Subject to Section 3.2(b), the Guarantee Trustee may
be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 32(a) until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
an instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
3.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section
3.2, the Guarantor shall pay to the Guarantee Trustee all amounts
owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued
to the date of such termination, removal or resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer),
as and when due, regardless of any defense (except defense of
payment by the Issuer), right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
(b) The Guarantor hereby also agrees to assume any and
all Obligations of the Issuer and in the event any such
Obligation is not so assumed, subject to the terms and conditions
hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due,
of any and all-Obligations to such Beneficiaries. This Guarantee
is intended to be for the Beneficiaries who have received notice
hereof.
SECTION 4.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 4.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of
the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by
the Issuer;
(b) the extension of time for the payment by the Issuer
of all or any portion of the Distributions, the price payable
upon the redemption of the Capital Securities, the Liquidation
Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection
with, the Capital Securities (other than an extension of time for
the payment of the Distributions, the price payable upon the
redemption of the Capital Securities, the Liquidation
Distribution or other sums payable that results from the
extension of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to
the terms of the Capital Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of. any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of
the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge Or defense of
a guarantor, it being the intent of this Section 4.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 4.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of
the Capital Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of this Guarantee or to
direct the exercise of any trust or power conferred upon the
Guarantee Trustee under this Guarantee; provided, however,
that (subject to Sections 2.1 and 2.2) the Guarantee Trustee
shall have the right to decline to follow any such direction if
the Guarantee Trustee shall determine that the actions so
directed would be unjustly prejudicial to the Holders not taking
part in such direction or if the Guarantee Trustee being advised
by legal counsel determines that the action or proceeding so
directed may not lawfully be taken or if the Guarantee Trustee in
good faith by its board of directors or trustees, executive
committee or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or
proceeding so directed would involve the Guarantee Trustee in
personal liability.
(b) Any Holder of Capital Securities may institute a
legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee, without first
instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person. The Guarantor waives any right or
remedy to require that any such action be brought first against
the Issuer, the Guarantee Trustee or any other Person before so
proceeding directly against the Guarantor.
SECTION 4.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of
collection.
SECTION 4.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights
of the Holders of Capital Securities against the Issuer in
respect of any amounts paid to such Holders by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by applicable provisions of
law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Guarantee, if, after giving effect to any such payment, any
amounts are due and unpaid under this Guarantee. If any amount
shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such
amount to the Holders.
SECTION 4.7 Independent Obligations.
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Capital Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding
the occurrence of any event referred to in subsections (a)
through (g), inclusive, Section 4.3 hereof.
SECTION 4.8 Enforcement.
A Beneficiary may enforce the Obligations of the
Guarantor contained in Section 4. l(b) directly against the
Guarantor, and the Guarantor waives any right or remedy to
require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor.
The Guarantor shall be subrogated to all rights (if any)
of any Beneficiary against the Issuer in respect of any amounts
paid to the Beneficiaries by the Guarantor under this Guarantee;
provided, however, that the Guarantor shall not (except to the
extent required by applicable provisions of law) be entitled to
enforce or exercise any rights that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Guarantee, if,
after giving effect to such payment, any amounts are due and
unpaid under this Guarantee. 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 Beneficiaries and
to pay over such amount to the Beneficiaries.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions.
So long as any Capital Securities remain outstanding, if
(a). there shall have occurred and be continuing an Event of
Default or (b) Debenture Issuer shall have selected an Extension
Period as provided in the Indenture and such period, or any
extension thereof, shall have commenced and be continuing, then
the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's
capital stock, (y) make any payment of principal of or interest
or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor that rank in all respects pari passu
with or junior in interest to the Debentures or (z) make any
payment under any guarantees of the Guarantor that rank in all
respects pari passu with or junior in interest to this Guarantee
(other than (i) repurchases, redemptions or other acquisitions of
shares of capital stock of the Guarantor (A) in connection with
any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees,
officers, directors, or consultants, (B) in connection with a
dividend reinvestment or stockholder stock purchase plan or (C)
in connection with the issuance of capital stock of the Guarantor
(or securities convertible into or exercisable for such capital
stock), as consideration in an acquisition transaction entered
into prior to the occurrence of the Event of Default or the
applicable Extension Period, (ii) as a result of any exchange or
conversion of any class or series of the Guarantor's capital
stock (or any capital stock of a subsidiary of the Guarantor) for
any class or series of the Guarantor's capital stock or of any
class or series of the Guarantor's indebtedness for any class or
series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchangedl (iv) any
declaration of a dividend in connection with any stockholder's
rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (v) any dividend in the
form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or
junior in interest to such stock).
SECTION 5.2 Ranking.
This Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of
payment to all present and future Senior Indebtedness (as
defined in the Indenture) of the Guarantor. By their acceptance
thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Guarantee and the other terms set
forth herein.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination.
This Guarantee shall terminate as to the Capital
Securities (i) upon full payment of the price payable upon
redemption of all Capital Securities then outstanding, (ii) upon
the distribution of all of the Debentures to the Holders of all
of the Capital Securities or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon
dissolution of the Issuer. This Guarantee will continue to be
effective or will be reinstated, as the case may be, if at
any time any Holder of Capital Securities must restore payment of
any sums paid under the Capital Securities or under this
Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission of such Indemnified Person in good faith
in accordance with this Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this
Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence,
willful misconduct or bad faith with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Issuer or the
Guarantor and upon such information, opinions, reports or
statements presented to the Issuer or the Guarantor by any Person
as to matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence and
who, if selected by such Indemnified Person, has been selected
with reasonable care by such Indemnified Person, including
information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which
Distributions to Holders of Capital Securities might properly be
paid.
SECTION 7.2 Indemnification-.
(a) The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence, willful misconduct or bad faith on the part
of the Indemnified Person, arising out of or in connection with
the acceptance or administration of the trust or trusts
hereunder, including but not limited to the costs and expenses
(including reasonable legal fees and expenses) of the Indemnified
Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any
of the Indemnified Person's powers or duties hereunder. The
obligation to indemnify as set forth in this Section 7.2 shall
survive the resignation or removal of the Guarantee Trustee and
the termination of this Guarantee.
(b) Promptly after receipt by an Indemnified Person
under this Section 7.2 of notice of the commencement of any
action, such Indemnified Person will, if a claim in respect
thereof is to be made against the Guarantor under this Section
7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not
relieve the Guarantor from liability under paragraph (a) above
unless and to the extent that the Guarantor did not otherwise
learn of such action and such failure results in the forfeiture
by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to
any Indemnified Person other than the indemnification obligation
provided in paragraph (a) above. The Guarantor shall be entitled
to appoint counsel of the Guarantor's choice at the Guarantor's
expense to represent the Indemnified Person in any action for
which indemnification is sought (in which case the Guarantor
shall not thereafter be
responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person or Persons except as set forth
below); provided, however, that such counsel shall be
satisfactory to the Indemnified Person. Notwithstanding the
Guarantor's election to appoint counsel to represent the
Indemnified Person in any action, the Indemnified Person shall
have the right to employ separate counsel (including local
counsel), and the Guarantor shall bear the reasonable
fees, costs and expenses of such separate counsel, if (i) the use
of counsel chosen by the Guarantor to represent the Indemnified
Person would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets
of, any such action include both the Indemnified Person and the
Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or
other Indemnified Persons
which are different from or additional to those available to the
Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the
Indemnified Person within a reasonable time after notice of the
institution of such action or (iv) the Guarantor shall authorize
the Indemnified Person to employ separate counsel at the expense
of the Guarantor. The Guarantor will not, without the prior
written consent of the Indemnified Persons, settle or compromise
or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Persons are actual or
potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each Indemnified Person from all liability arising out
of such claim, action, suit or proceeding.
SECTION 7.3 Compensatiom Reimbursement of Expenses.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time
such compensation for all services rendered by it hereunder as
the parties shall agree to from time to time (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to the negligence, willful
misconduct or bad faith of the Guarantee Trustee.
The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the
termination of this Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns.
All guarantees and agreements contained in this
Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of the Guarantor's assets to another
entity, in each case to the extent permitted under the Indenture,
the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of
the Holders of a Majority in liquidation amount of the Capital
Securities.
SECTION 8.2 Amendments.
Except with respect to any changes that do not
adversely affect the powers, preferences, rights or interests of
Holders of the Capital Securities in any material respect (in
which case no approval of Holders will be required), this
Guarantee may be amended only with the prior approval of the
Holders of a Majority in liquidation amount of the Capital
Securities. The provisions of the Declaration with respect to
amendments thereof shall apply equally with respect to amendments
of the Guarantee.
SECTION 8.3 Notices.
All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by first class mail, as
follows:
(a) if given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the
Holders of the Capital Securities): Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate Capital Markets,
Telecopy: 000-000-0000, Telephone: 000-000-0000;
(b) if given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the Capital
Securities and to the Guarantee Trustee): Union National
Financial Corporation, X.X. Xxx 000, Xxxxx Xxx, XX 00000,
Attention: Xxxxxxx X. Xxxxxx, Telecopy: 000-000-0000, Telephone:
000-000-0000; or
(c) if given to any Holder of the Capital Securities,
at the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or
other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 8.4 Benefit.
This Guarantee is solely for the benefit of the Holders
of the Capital Securities and, subject to Section 2.1 (a), is not
separately transferable from the Capital Securities.
SECTION 8.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES OF SAID STATE OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 8.6 Counterparts.
This Guarantee may contain more than one counterpart of
the signature page and this Guarantee may be executed by the
affixing of the signature of the Guarantor and the Guarantee
Trustee to any of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of
the signers had signed a single signature page.
THIS GUARANTEE is executed as of the day and year first
above written.
UNION NATIONAL FINANCIAL
CORPORATION,
as Guarantor
By:/s/ Xxxx X. Xxxxxx
_______________________
Name: Xxxx X. Xxxxxx
Title: President/CEO
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:/s/ Xxxxxx X. Xxxxx
_______________________
Name: Xxxxxx X. Xxxxx
Title: Vice President
