Exhibit 4.4
GUARANTEE AGREEMENT
National Penn Bancshares, Inc.
Dated as of April 7, 2004
TABLE OF CONTENTS
Page
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
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TABLE OF CONTENTS
(continued)
Page
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..........................................................................14
SECTION 7.2. Indemnification......................................................................14
SECTION 7.3. Compensation; Reimbursement of Expenses..............................................15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns...............................................................16
SECTION 8.2. Amendments...........................................................................16
SECTION 8.3. Notices..............................................................................16
SECTION 8.4. Benefit..............................................................................17
SECTION 8.5. Governing Law........................................................................17
SECTION 8.6. Counterparts.........................................................................17
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of April
7, 2004, is executed and delivered by National Penn Bancshares, Inc.,
incorporated in Pennsylvania (the "Guarantor"), and Wells Fargo Bank, National
Association, a national banking association with its principal place of business
in the State of Delaware, 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 NPB Capital Trust V, a Delaware statutory trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of April 7, 2004, among the trustees named
therein of the Issuer, National Penn Bancshares, Inc., as sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof securities, having an aggregate
liquidation amount of up to $20,000,000, designated the TP Securities (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 this Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to
this Guarantee as modified, supplemented or amended from time
to time;
(d) all references in this Guarantee to Articles and Sections are
to Articles and Sections of this Guarantee, unless otherwise
specified;
(e) terms defined in the Declaration as 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.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Guarantee is located at 919 Market Street, Suite 700,
Wilmington, DE 19801.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of
National Penn Bancshares, Inc., designated the Junior Subordinated Debt
Securities due 2034, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" has the meaning set forth in Section 2.4.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Capital Securities to the extent the Issuer has funds available in the
Property Account (as defined in the Declaration) therefor at such time, (ii) the
Redemption Price (as defined in the Indenture) to the extent the Issuer has
funds available in the Property Account therefor at such time, with respect to
any Capital Securities called for redemption by the Issuer, (iii) the Special
Redemption Price (as defined in the Indenture) to the extent the Issuer has
funds available in the Property Account therefor at such time, with respect to
Capital Securities called for redemption upon the occurrence of a Special Event
(as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer has funds available in the Property Account therefor at such time,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer after satisfaction of liabilities to
creditors of the Issuer as required by applicable law (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means Wells Fargo Bank, National
Association, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee (including
in its individual capacity), any Affiliate of the Guarantee Trustee, or any
officers, directors, shareholders,
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members, partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.
"Indenture" means the Indenture, dated as of April 7, 2004,
between the Guarantor and Wells Fargo Bank, National Association, not in its
individual capacity but solely as trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued to the Institutional
Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as a class,
but separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to,
but excluding, the date upon which the voting percentages are determined) of all
Capital Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Issuer, other than
obligations of the Issuer to pay to holders of any Trust Securities the amounts
due such holders pursuant to the terms of the Trust Securities.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officer's
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Officer's Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary
to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee
with direct responsibility for the administration of any matters relating to
this Guarantee, including any vice president,
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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.
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(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Capital Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any
Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 4.4(b) or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit
of the Holders of the Capital Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of
Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this
Guarantee against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived
pursuant to Section 2.4(b)) and is actually known to a
Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in
it by this Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his
or her own affairs.
(d) No provision of this Guarantee shall be construed to relieve
the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all Events of Default
that may have occurred:
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(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the
express provisions of this Guarantee, and
the Guarantee Trustee shall not be liable
except for the performance of such duties
and obligations as are specifically set
forth in this Guarantee, and no implied
covenants or obligations shall be read into
this Guarantee against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of
the statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the
case of any such certificates or opinions
furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to
examine the same to determine whether or not
on their face they conform to the
requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be
proved that such Responsible Officer of the Guarantee
Trustee or the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the written
direction of the Holders of not less than a Majority
in liquidation amount of the Capital Securities
relating to the time, method and place of conducting
any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this
Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably
assured to it under the terms of this Guarantee, or
security and indemnity, reasonably satisfactory to
the Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION 2.2. Certain Rights of the Guarantee Trustee.
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(a) Subject to the provisions of Section 2.1:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from
acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties.
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(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an
Officer's Certificate.
(iii) Whenever, in the administration of this Guarantee,
the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon
an Officer's Certificate of the Guarantor which, upon
receipt of such request, shall be promptly delivered
by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any
instrument or other writing (or any rerecording,
refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and
complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its
employees. The Guarantee Trustee shall have the right
at any time to seek instructions concerning the
administration of this Guarantee from any court of
competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee,
against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Guarantee
Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying
with such request or direction, including such
reasonable advances as may be requested by the
Guarantee Trustee; provided, however, that nothing
contained in this Section 2.2(a)(vi) shall be taken
to relieve the Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee
shall not be
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responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care
by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the
Capital Securities, and the signature of the
Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action.
No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions
of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or
its agent's taking such action.
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from
the Holders of a Majority in liquidation amount of
the Capital Securities, (B) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received and (C)
shall be protected in conclusively relying on or
acting in accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or
powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it
shall be illegal or in which the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law
to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a
duty.
SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee.
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The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
SECTION 2.4. Events of Default; Waiver.
(a) An Event of Default under this Guarantee will occur upon the
failure of the Guarantor to perform any of its payment or
other obligations hereunder.
(b) The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of
the Holders of all of the Capital Securities, waive any past
Event of Default and its consequences. Upon such waiver, any
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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 if and so long as a
Responsible Officer of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders of the Capital Securities.
(b) The Guarantee Trustee shall not be charged with knowledge of
any Event of Default unless the Guarantee Trustee shall have
received written notice thereof from the Guarantor or a Holder
of the Capital Securities, or a Responsible Officer of the
Guarantee Trustee charged with the administration of this
Guarantee shall have actual knowledge thereof.
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1. The Guarantee Trustee; Eligibility.
(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 or territory thereof
or of the District of Columbia, or Person authorized
under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state,
territorial or District of Columbia authority. If
such corporation 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 3.1(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).
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(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.
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(a) Subject to Section 3.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 3.2(a) until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed
or until its removal or resignation. The Guarantee Trustee may
resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment
by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 3.2
within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed
may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation
of the Guarantee Trustee pursuant to this Section 3.2, the
Guarantor shall pay to the Guarantee Trustee all amounts owing
to the Guarantee Trustee under Sections 7.2 and 7.3 accrued to
the date of such termination, removal or resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1. Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense (except as defense of
payment by the Issuer), right of set-off or counterclaim that
the Issuer may have or assert. The
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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, Redemption Price, Special
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Capital Securities or the
extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Capital
Securities (other than an extension of time for the payment of
the Distributions, Redemption Price, Special Redemption Price,
Liquidation Distribution or other sums payable that results
from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant
to the terms of the Capital Securities, or any action on the
part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets
of the Issuer;
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(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
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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, of Section 4.3 hereof.
SECTION 4.8. Enforcement.
A Beneficiary may enforce the Obligations of the Guarantor
contained in Section 4.1 (b) directly against the Guarantor, and the Guarantor
waives any right or remedy to require that any action be brought against the
Issuer or any other person or entity before proceeding against the Guarantor.
The Guarantor shall be subrogated to all rights (if any) of
any Beneficiary against the Issuer in respect of any amounts paid to the
Beneficiaries by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable provisions of
law) be entitled to enforce or exercise any rights that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, after giving effect to such
payment, any amounts are due and unpaid under this Guarantee.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1. Limitation of Transactions.
So long as any Capital Securities remain outstanding, if (a)
there shall have occurred and be continuing an Event of Default or (b) the
Guarantor shall have selected an Extension Period as provided in the Declaration
and such period, or any extension thereof, shall have commenced and be
continuing, then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (y) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Guarantor that rank pari passu in all respects with
or junior in interest to the Debentures (other than (i) payments under this
Guarantee, (ii) repurchases, redemptions or other acquisitions of shares of
capital stock of the Guarantor (A) in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors, or consultants, (B) in connection with a
dividend reinvestment or stockholder stock purchase plan or (C) in connection
with the issuance of capital stock of the Guarantor (or securities convertible
into or exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to the occurrence of the Event of Default or the
applicable Extension Period, (iii) as a result of any exchange,
reclassification, combination or
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conversion of any class or series of the Guarantor's capital stock (or any
capital stock of a subsidiary of the Guarantor) for any class or series of the
Guarantor's capital stock or of any class or series of the Guarantor's
indebtedness for any class or series of the Guarantor's capital stock, (iv) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (v) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (vi) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock).
SECTION 5.2. Ranking.
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the foregoing provisions of this Guarantee and the other terms set forth
herein.
The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
or agreement that the Guarantor may enter into in the future or otherwise.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination.
This Guarantee shall terminate as to the Capital Securities
(i) upon full payment of the Redemption Price or the Special Redemption Price,
as the case may be, of all Capital Securities then outstanding, (ii) upon the
distribution of all of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.
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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 or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Issuer or the Guarantor and
upon such information, opinions, reports or statements
presented to the Issuer or the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who,
if selected by such Indemnified Person, has been selected with
reasonable care by such Indemnified Person, including
information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Capital Securities
might properly be paid.
SECTION 7.2. Indemnification.
(a) The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and
all loss, liability, damage, claim or expense incurred without
negligence or willful misconduct on the part of the
Indemnified Person, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including but not limited to the costs and expenses (including
reasonable legal fees and expenses) of the Indemnified Person
defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of
any of the Indemnified Person's powers or duties hereunder.
The obligation to indemnify as set forth in this Section 7.2
shall survive the resignation or removal of the Guarantee
Trustee and the termination of this Guarantee.
(b) Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such
Indemnified Person will, if a claim in respect thereof is to
be made against the Guarantor under this Section 7.2, notify
the Guarantor in writing of the commencement thereof; but the
failure so to notify the Guarantor (i) will not relieve the
Guarantor from liability under paragraph (a) above unless and
to the extent that the Guarantor did not otherwise learn of
such action and such failure results in the forfeiture by the
Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations
to any Indemnified Person other than the indemnification
obligation provided in paragraph (a) above. The Guarantor
shall be entitled to appoint counsel of the Guarantor's choice
at the Guarantor's
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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 (and local 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. Compensation; Reimbursement of Expenses.
---------------------------------------
Other than as set forth in the Fee Agreement of even date
herewith among Bear Stearns & Co., Inc. the Guarantor, the Guarantor Trustee and
the Delaware Trustee (as defined in the Declaration), the Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as the
parties shall agree to from time to time (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or willful
misconduct.
The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case to the extent
permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of not less than a Majority in liquidation amount of the Capital
Securities.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material respect
(in which case no consent of Holders will be required), this Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority
in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof shall apply equally with respect
to amendments of the Guarantee.
SECTION 8.3. Notices.
All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders of the
Capital Securities):
Wells Fargo Bank, National Association
919 Market Street
Suite 700
Wilmington, DE 19801
Attention: Corporate Trust Division
Telecopy: 302-575-2006
Telephone: 302-575-2005
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(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):
National Penn Bancshares, Inc.
Philadelphia and Reading Avenues
Boyertown, Pennsylvania 19512
Attention: Gary L. Rhoads
Telecopy: (610) 369-6341
Telephone: (610) 369-6341
(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 LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF.
SECTION 8.6. Counterparts.
This Guarantee may contain more than one counterpart of the
signature page and this Guarantee may be executed by the affixing of the
signature of the Guarantor and the Guarantee Trustee to any of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
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THIS GUARANTEE is executed as of the day and year first above
written.
National Penn Bancshares, Inc.,
as Guarantor
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Guarantee Trustee
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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