GUARANTEE
AGREEMENT
FIRST CHESTER
COUNTY CORPORATION
Dated as of
April 28, 2009
TABLE OF CONTENTS
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ARTICLE I -DEFINITIONS AND
INTERPRETATION
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1
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SECTION 1.1 Definitions and
Interpretation
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1
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ARTICLE II - POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
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4
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SECTION 2.1 Powers and Duties of the Guarantee
Trustee
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4
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SECTION 2.2 Certain Rights of the Guarantee
Trustee
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5
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SECTION 2.3. Not Responsible for Recitals or
Issuance of Guarantee
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7
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SECTION 2.4 Events of Default; Waiver
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7
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SECTION 2.5. Events of Default;
Notice
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8
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ARTICLE III-THE GUARANTEE TRUSTEE
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8
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SECTION 3.1. The Guarantee Trustee;
Eligibility
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8
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SECTION 3.2 Appointment, Removal and Resignation
of the Guarantee Trustee
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9
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SECTION 4.1. Guarantee
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10
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SECTION 4.2. Waiver of Notice and
Demand
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10
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SECTION 4.3. Obligations Not Affected
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10
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SECTION 4.4. Rights of Holders
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11
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SECTION 4.5. Guarantee of Payment
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12
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SECTION 4.6. Subrogation
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12
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SECTION 4.7. Independent Obligations
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12
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SECTION 4.8. Enforcement
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12
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ARTICLE V- LIMITATION OF TRANSACTIONS;
SUBORDINATION
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13
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SECTION 5.1. Limitation of
Transactions
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13
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ARTICLE VI- TERMINATION
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14
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SECTION 6.1. Termination
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14
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ARTICLE VII- INDEMNIFICATION
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14
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SECTION 7.1. Exculpation
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14
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SECTION 7.2. Indemnification.
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14
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SECTION 7.3. Compensation; Reimbursement of
Expenses
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15
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ARTICLE VIII- MISCELLANEOUS
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16
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SECTION 8.1. Successors and Assigns
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16
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SECTION 8.2. Amendments
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16
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SECTION 8.5. Governing Law
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17
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SECTION 8.6. Counterparts
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17
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the
“Guarantee”), dated as of April 28, 2009, is executed
and delivered by First Chester County Corporation, a Pennsylvania
corporation (the “Guarantor”), and Wilmington Trust
Company, 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 Chester County
Capital Trust IV, a Delaware statutory trust (the
“Issuer”).
WHEREAS, pursuant to an Amended and
Restated Trust Agreement (the “Agreement”), dated as of
April 28, 2009, among the trustees named therein of the Issuer, the
administrators of the Issuer named therein, First Chester County
Corporation, as sponsor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof securities, having an
aggregate liquidation amount of up to $5,175,000, designated the
Trust Preferred 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 Agreement 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
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(f)
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a reference to the singular includes the plural
and vice versa.
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“Authorized Officer”
means any officer of any Person or any person authorized by or
pursuant to a resolution of the Board of Directors (or equivalent
body) of such Person.
“Beneficiaries” means
any Person to whom the Issuer is or hereafter becomes indebted or
liable.
“Board Resolution” means
a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Guarantor to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification.
“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.
“Covered Person” means
any Holder of Capital Securities.
“Debentures” means the
junior subordinated debentures of First Chester County Corporation,
designated the Junior Subordinated Debt Securities due 2039, held
by the Property Trustee (as defined in the Agreement) 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 Agreement) 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 Agreement) 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 Event
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 Agreement), the
lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Capital Securities to the
date of payment, to the extent the Issuer has funds available in
the Property Account therefor at such time, and (b) the amount of
assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer as required by applicable
law (in either case, the “Liquidation
Distribution”).
“Guarantee Trustee”
means Wilmington Trust Company, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to
the terms of this Guarantee and thereafter means each such
Successor Guarantee Trustee.
“Holder” means any
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
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hereunder, “Holder”
shall not include the Guarantor or any Affiliate of the
Guarantor.
“Indemnified Person”
means the Guarantee Trustee (including in its individual capacity),
any Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
“Indenture” means the
Junior Subordinated Indenture, dated as of April 28, 2009, between
the Guarantor and Wilmington Trust Company, not in its individual
capacity but solely as trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued to the
Property 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 reasonably 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.
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“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, any assistant vice
president, any secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or other officer of the
Corporate Trust Office of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer’s knowledge of and
familiarity with the particular subject.
“Successor Guarantee
Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section
3.1.
“Trust Securities” means
the Common Securities and the Capital Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the
Guarantee Trustee.
(a) This Guarantee
shall be held by the Guarantee Trustee for the benefit of the
Holders of the Capital Securities, and the Guarantee Trustee shall
not transfer this Guarantee to any Person except a Holder of
Capital Securities exercising his or her rights pursuant to Section
4.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee
Trustee.
(b) If an Event of
Default actually known to a Responsible Officer of the Guarantee
Trustee has occurred and is continuing, the Guarantee Trustee shall
enforce this Guarantee for the benefit of the Holders of the
Capital Securities.
(c) The Guarantee
Trustee, before the occurrence of any Event of Default and 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 or bad faith, except
that:
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(i) prior to the occurrence of any
Event of Default and after the curing or waiving of all Events of
Default that may have occurred:
(A) the duties and obligations of
the Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee, and the Guarantee Trustee shall not
be liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee, and no implied
covenants or obligations shall be read into this Guarantee against
the Guarantee Trustee; and
(B) in the absence of bad faith on
the part of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee; but in the case
of any such certificates or opinions furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the
same to determine whether or not on their face they conform to the
requirements of this Guarantee;
(ii) the
Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved in a court of competent
jurisdiction 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.
(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
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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 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 reasonable
costs, expenses (including reasonable 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,
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nominees, custodians or attorneys,
and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action
taken by the Guarantee Trustee or its agents hereunder shall bind
the Holders of the Capital Securities, and the signature of the
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Guarantee Trustee to
so act or as to its compliance with any of the terms and provisions
of this Guarantee, both of which shall be conclusively evidenced by
the Guarantee Trustee’s or its agent’s taking such
action.
(x) Whenever
in the administration of this Guarantee the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders of
a Majority in liquidation amount of the Capital Securities, (B) may
refrain from enforcing such remedy or right or taking s
