Exhibit 4.3
================================================================================
GUARANTEE AGREEMENT
Between
FIRST EMPIRE STATE CORPORATION
(as Guarantor)
and
BANKERS TRUST COMPANY
(as Guarantee Trustee)
dated as of
June 6, 1997
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS
Section 1.1. Definitions................................ 2
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application........... 5
Section 2.2. List of Holders............................ 6
Section 2.3. Reports by the Guarantee Trustee........... 6
Section 2.4. Periodic Reports to the Guarantee Trustee.. 6
Section 2.5. Evidence of Compliance with Conditions
Precedent.................................. 6
Section 2.6. Events of Default; Waiver.................. 7
Section 2.7. Event of Default; Notice................... 7
Section 2.8. Conflicting Interests...................... 7
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE
TRUSTEE
Section 3.1. Powers and Duties of the Guarantee
Trustee.................................... 7
Section 3.2. Certain Rights of Guarantee Trustee........ 9
Section 3.3. Indemnity.................................. 11
Section 3.4. Expenses................................... 11
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility............. 11
Section 4.2. Appointment, Removal and Resignation
of the Guarantee Trustee................... 12
ARTICLE V. GUARANTEE
Section 5.1. Guarantee.................................. 13
Section 5.2. Waiver of Notice and Demand................ 13
Section 5.3. Obligations Not Affected................... 13
Section 5.4. Rights of Holders.......................... 14
Section 5.5. Guarantee of Payment....................... 15
Section 5.6. Subrogation................................ 15
Section 5.7. Independent Obligations.................... 15
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.............................. 16
Section 6.2. Pari Passu Guarantees...................... 16
ARTICLE VII. TERMINATION
Section 7.1. Termination................................ 16
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns..................... 16
Section 8.2. Amendments................................. 17
Section 8.3. Notices.................................... 17
Section 8.4. Benefit.................................... 18
Section 8.5. Interpretation............................. 18
Section 8.6. Governing Law.............................. 19
Section 8.7. Counterparts............................... 19
- ii -
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Guarantee Agreement
Act Section Section
--------------- -------------------
(ss.) 310(a)(1)................................. 4.1(a)
(a)(2).................................. 4.1(a)
(a)(3).................................. Not Applicable
(a)(4).................................. Not Applicable
(b)..................................... 2.8, 4.1(c)
(ss.) 311(a).................................... Not Applicable
(b)..................................... Not Applicable
(ss.) 312(a).................................... 2.2(a)
(b)..................................... 2.2(b)
(c)..................................... Not Applicable
(ss.) 313(a).................................... 2.3
(a)(4).................................. 2.3
(b)..................................... 2.3
(c)..................................... 2.3
(d)..................................... 2.3
(ss.) 314(a).................................... 2.4
(b)..................................... 2.4
(c)(1).................................. 2.5
(c)(2).................................. 2.5
(c)(3).................................. 2.5
(e)..................................... 1.1, 2.5, 3.2
(ss.) 315(a).................................... 3.1(d)
(b)..................................... 2.7
(c)..................................... 3.1(c)
(d)..................................... 3.1(d)
(e)..................................... Not Applicable
(ss.) 316(a).................................... 1.1,2.6, 5.4
(a)(1)(A)............................... 5.4
(a)(1)(B)............................... 5.4
(a)(2).................................. Not Applicable
(b)..................................... 5.3
(c)..................................... Not Applicable
(ss.) 317(a)(1)................................. Not Applicable
(a)(2).................................. Not Applicable
(b)..................................... Not Applicable
(ss.) 318(a).................................... 2.1
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Guarantee Agreement.
- iii -
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of June 6, 1997 is
executed and delivered by FIRST EMPIRE STATE CORPORATION, a New York
corporation (the "Guarantor") having its principal office at One M&T
Plaza, Buffalo, New York 14240 and BANKERS TRUST COMPANY, a New York
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 First Empire Capital Trust
II, a Delaware statutory business trust (the "Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of June 6, 1997, among First Empire
State Corporation, as Depositor, Bankers Trust Company, as Property
Trustee (the "Property Trustee"), Bankers Trust (Delaware), as Delaware
Trustee (the "Delaware Trustee") (collectively, the "Issuer Trustees")
and the Holders from time to time of preferred undivided beneficial
ownership interests in the assets of the Issuer Trust, the Issuer Trust
is issuing $100,000,000 aggregate Liquidation Amount (as defined
herein) of its 8.277% Capital Securities, Liquidation Amount $1,000 per
capital security (the "Capital Securities"), representing preferred
undivided beneficial ownership interests in the assets of the Issuer
Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer
Trust and the proceeds thereof, together with the proceeds from the
issuance of the Issuer Trust's Common Securities (as defined herein),
will be used to purchase the Junior Subordinated Debentures due June 1,
2027 (as defined in the Trust Agreement) (the "Junior Subordinated
Debentures") of the Guarantor which will be deposited with Bankers
Trust Company, as Property Trustee under the Trust Agreement, as trust
assets; 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 herein, to pay to the Holders of the
Capital Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase of the
Capital Securities by each Holder, which purchase the Guarantor hereby
acknowledges shall benefit the Guarantor, and intending to be legally
bound hereby, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the
Capital Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth
below shall, unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
"Additional Amounts" has the meaning specified in the
Trust Agreement.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Capital Securities" shall have the meaning specified in the
first recital of this Guarantee Agreement.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Distributions" means preferential cumulative cash
distributions accumulating from June 6, 1997 and payable semi-annually
in arrears on June 1 and December 1 of each year, commencing December
1, 1997, at the annual rate of 8.277% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in
any of its payment obligations under this Guarantee Agreement, or (ii)
a default by the Guarantor in any other obligation hereunder that
remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by or on behalf of the
Issuer Trust: (i) any accrued and unpaid Distributions (as defined in
the Trust Agreement) required to be paid on the Capital
- 2 -
Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price, with
respect to the Capital Securities called for redemption by the Issuer
Trust to the extent that the Issuer Trust shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer Trust,
unless Junior Subordinated Debentures are distributed to the Holders,
the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment to the
extent the Issuer Trust shall have funds on hand available to make such
payment at such time and (b) the amount of assets of the Issuer Trust
remaining available for distribution to Holders in liquidation of the
Issuer Trust (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means Bankers Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Holder" means any holder, as registered on the books and
records of the Issuer Trust, of any Capital Securities; provided,
however, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of June 6, 1997, between First Empire State Corporation and Bankers
Trust Company, as trustee, as may be modified, amended or supplemented
from time to time.
"Issuer Trust" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Liquidation Amount" means the stated amount of $1,000
per Capital Security.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, Capital
Securities representing more than 50% of the aggregate Liquidation
Amount of all then outstanding Capital Securities issued by the Issuer
Trust.
"Like Amount" means (i) with respect to a redemption of
Trust Securities, Trust Securities having a Liquidation Amount
- 3 -
equal to that portion of the principal amount of Junior Subordinated
Debentures to be contemporaneously redeemed in accordance with the
Indenture, allocated to the Common Securities and to the Capital
Securities based upon the relative Liquidation Amounts of such classes
and (ii) with respect to a distribution of Junior Subordinated
Debentures to Holders of Trust Securities in connection with a
dissolution or liquidation of the Issuer Trust, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of
the Trust Securities of the Holder to whom such Junior Subordinated
Debentures are distributed.
"Officers' Certificate" means a certificate signed by the
Chief Executive Officer, President or a Senior Vice President or Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee
Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officers' Certificate;
(c) a statement that such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Redemption Date" means, with respect to any Capital Security
to be redeemed, the date fixed for such redemption by or pursuant to
the Trust Agreement; provided that each Junior Subordinated Debenture
Redemption Date and the stated maturity of the Junior Subordinated
Debentures shall be a Redemption Date for a Like Amount of Capital
Securities.
- 4 -
"Redemption Price" shall have the meaning specified in
the Trust Agreement.
"Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer assigned to the Corporate Trust Office,
including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other
officer of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture,
and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Senior Indebtedness" shall have the meaning specified
in the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated June 6, 1997, executed by First Empire State
Corporation, as Depositor, Bankers Trust (Delaware), as Delaware
Trustee, and Bankers Trust Company, as Property Trustee.
"Trust Indenture Act" means the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to
be a part of and govern this Guarantee Agreement, the provision of the
Trust Indenture Act shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.
- 5 -
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to
the Guarantee Trustee a list of Holders at the following times:
(i) semi-annually, not more than 15 days after May 15
and November 15 in each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders as of such May 15 and November 15; and
(ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor
of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished.
(b) The Guarantee Trustee shall comply with the requirements
of Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January
31, 1998, the Guarantee Trustee shall provide to the Holders such
reports, if any, as are required by Section 313 of the Trust Indenture
Act in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, and the
Holders such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act and the compliance certificate
required by Section 314 of the Trust Indenture Act, in the form, in the
manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided
for in this Guarantee Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
- 6 -
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders, waive any
past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent
therefrom.
SECTION 2.7. Event 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, notices of all Events of Default known
to the Guarantee Trustee, unless such Events of Default have been cured
before the giving of such notice; provided that, except in the case of
a default in the payment of a Guarantee Payment, the Guarantee Trustee
shall be protected in withholding such notice if and so long as the
Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged
with the administration of this Guarantee Agreement shall have received
written notice of such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture
Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall
not transfer this Guarantee Agreement to any Person except a Holder
exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee
hereunder. The right, title
- 7 -
and interest of the Guarantee Trustee, as such, hereunder shall
automatically vest in any Successor Guarantee Trustee, upon acceptance
by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall be obligated to perform only such duties as are
specifically set forth in this Guarantee Agreement (including pursuant
to Section 2.1), and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. If an Event of
Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) Prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of this
Guarantee Agreement (including pursuant to Section 2.1), and the
Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Guarantee Agreement (including pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that by
any provision hereof or of the Trust Indenture Act are specifically
required to be furnished
- 8 -
to the Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) The Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the 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 Agreement;
and
(iv) No provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not assured to it under the
terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may 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 reasonably
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee
- 9 -
(unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel, and the advice or written opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor or
any of its Affiliates and may be one of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee.
(vi) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through its agents or attorneys, and the Guarantee
Trustee shall not be responsible for any negligence or wilful
misconduct on the part of any such agent or attorney appointed with due
care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain
- 10 -
from enforcing such remedy or right or taking such other action until
such instructions are received and (C) shall be fully protected in
acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act
or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Guarantee Trustee shall
be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense
incurred without negligence, wilful misconduct or bad faith on the part
of the Guarantee Trustee, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee
Trustee for its expenses and costs (including reasonable attorneys' or
agents' fees) incurred in connection with the performance of its duties
hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(c) of the Trust Indenture
- 11 -
Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority, then, for the purposes of this Section and to the
extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2.
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the
Successor Guarantee Trustee by written instrument executed by the
Successor Guarantee Trustee and delivered to the Holders and the
Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a
Guarantee Trustee may resign at any time by giving written notice
thereof to the Holders. The Guarantee Trustee shall appoint a successor
by requesting from at least three Persons meeting the eligibility
requirements such Person's expenses and charges to serve as the
Guarantee Trustee, and selecting the Person who agrees to the lowest
expenses and charges. If the instrument of acceptance by the Successor
Guarantee Trustee shall not have been delivered to the Guarantee
Trustee within 60 days after the giving of such notice of resignation,
the Guarantee Trustee may petition, at the expense of the Guarantor,
any court of competent jurisdiction for the appointment of a Successor
Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any
time by Act (within the meaning of Section 6.8 of the Trust Agreement)
of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, delivered to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or
- 12 -
become incapable of acting as Guarantee Trustee, or if any vacancy
shall occur in the office of any Guarantee Trustee for any cause, the
Holders of the Capital Securities, by Act of the Holders of record of
not less than 25% in aggregate Liquidation Amount of the Capital
Securities then outstanding delivered to such Guarantee Trustee, shall
promptly appoint a successor Guarantee Trustee. If no Successor
Guarantee Trustee shall have been so appointed by the Holders of the
Capital Securities and such appointment accepted by the Successor
Guarantee Trustee, any Holder, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction
for the appointment of a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay
in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer Trust), as and
when due, regardless of any defense, right of set-off or counterclaim
which the Issuer Trust may have or assert, except the defense of
payment. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Issuer Trust to pay such amounts to the
Holders. The Guarantor shall give prompt written notice to the
Guarantee Trustee in the event it makes any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
Guarantee Agreement and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, the Issuer Trust or any
other Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or
implied agreement, covenant, term or condition
- 13 -
relating to the Capital Securities to be performed or observed by
the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Junior Subordinated Debentures as so
provided in the Indenture), 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;
(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 Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer Trust or any of the assets of the Issuer Trust;
(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
(other than payment of the underlying obligation), it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice
to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for
the benefit of the Holders; (ii) the Guarantee Trustee has the right to
enforce this Guarantee Agreement on
- 14 -
behalf of the Holders; (iii) 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 Agreement or
exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (iv) any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights
under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer Trust or any other
Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged
except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer Trust) or upon
the distribution of Junior Subordinated Debentures to Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any
rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment
under this Guarantee Agreement, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the
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 Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section
5.3 hereof.
- 15 -
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Indebtedness of the Guarantor to the
extent and in the manner set forth in the Indenture with respect to the
Junior Subordinated Debentures, and the provisions of Article XIII of
the Indenture will apply, mutatis mutandis, to the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder do not
constitute Senior Indebtedness of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with any similar guarantee agreements
issued by the Guarantor on behalf of the holders of preferred or
capital securities issued by the Issuer Trust and with any other
security, guarantee or other obligation that is expressly stated to
rank pari passu with the obligations of the Guarantor under this
Guarantee Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all
Capital Securities, (ii) the distribution of Junior Subordinated
Debentures to the Holders in exchange for all of the Capital Securities
or (iii) full payment of the amounts payable in accordance with Article
IX of the Trust Agreement upon liquidation of the Issuer Trust.
Notwithstanding the foregoing, this Guarantee Agreement will continue
to be effective or will be reinstated, as the case may be, if at any
time any Holder is required to repay any sums paid with respect to
Capital Securities or this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Capital Securities then
- 16 -
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not
assign its obligations hereunder, and any purported assignment that is
not in accordance with these provisions shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of the Holders (in which case no consent of
the Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities. The
provisions of Article VI of the Trust Agreement concerning meetings of
the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the
party giving such notice, and delivered, telecopied (confirmed by
delivery of the original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number or to
the attention of such other Person as the Guarantor may give notice to
the Holders:
First Empire State Corporation
One M&T Plaza
Buffalo, New York 14246
Facsimile No.: (716) 842-5376
Attention: Office of the Secretary
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address
set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantee Trustee on behalf of
the Issuer Trust may give notice to the Holders:
c/o Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
- 17 -
Attention: Corporate Trust and Agency Group;
Corporate Market Services
with a copy to:
First Empire State Corporation
One M&T Plaza
Buffalo, New York 14246
Facsimile No.: (716) 842-5376
Attention: Office of the Secretary
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group
Corporate Market Services
(d) if given to any Holder, at the address set forth on
the books and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid, except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but
not defined in the preamble hereto have the respective meanings
assigned to them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement
has the same meaning throughout;
- 18 -
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and
vice versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one
and the same instrument.
- 19 -
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
FIRST EMPIRE STATE CORPORATION,
as Guarantor
By:
----------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee, and not
in its individual capacity
By:
----------------------------------
Name:
Title:
- 20 -