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Exhibit 4.31
PREFERRED SECURITIES GUARANTEE AGREEMENT
BANK ONE CAPITAL II
Dated as of August 8, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation....................................... 2
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................... 5
SECTION 2.2 Lists of Holders of Securities....................................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee........................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee...................... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent..................... 6
SECTION 2.6 Events of Default; Waiver............................................ 6
SECTION 2.7 Event of Default; Notice............................................. 6
SECTION 2.8 Conflicting Interests................................................ 7
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee................. 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee........................ 9
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee....................................... 11
ARTICLE IV PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility............................. 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred 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.............................................. 16
ARTICLE VI LIMITATION OF TRANSACTIONS, SUBORDINATION
SECTION 6.1 Limitation of Transactions........................................... 16
SECTION 6.2 Subordination........................................................ 16
SECTION 6.3 Pari Passu Guarantees................................................ 16
ARTICLE VII TERMINATION
SECTION 7.1 Termination.......................................................... 17
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ARTICLE VIII INDEMNIFICATION
SECTION 8.1 Exculpation.......................................................... 17
SECTION 8.2 Indemnification...................................................... 18
SECTION 8.3 Compensation and Reimbursement....................................... 18
ARTICLE IX MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................... 19
SECTION 9.2 Amendments........................................................... 19
SECTION 9.3 Notices.............................................................. 19
SECTION 9.4 Benefit.............................................................. 20
SECTION 9.5 Governing Law........................................................ 20
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of August 8, 2000, is executed and delivered by BANK ONE
CORPORATION, a Delaware corporation (the "Guarantor"), and The Chase Manhattan
Bank, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of BANK ONE Capital II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of August 8, 2000, among the trustees of the
Issuer named therein, the Guarantor, 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 11,200,000 preferred securities, having an
aggregate liquidation amount of $280,000,000, designated the 8.500% Preferred
Securities (the "Preferred Securities") (including exercise of the underwriters'
over-allotment option);
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay to
the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein.
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Preferred Securities Guarantee for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Indenture), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(1) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1 or in the Declaration, as the
case may be;
(2) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(3) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from time to
time;
(4) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(5) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(6) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
---------
405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means a day other than (a) a Saturday or
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Sunday, (b) a day on which banking institutions in The City of New York or the
City of Chicago are authorized or required by law or executive order to remain
closed, or (c) a day on which the Institutional Trustee's Corporate Trust Office
or the Corporate Trust Office of the Debenture Trustee is closed for business.
"Common Securities" means the securities representing common
-----------------
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means (i) when used with respect to
----------------------
the Preferred Guarantee Trustee, the principal corporate office of the Preferred
Guarantee Trustee located in New York, New York which on the date of this
Trustee Agreement is 450 West 33rd Street, New York, New York 10001 - Attention:
Capital Markets Fiduciary Services, (ii) when used with
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respect to the Debenture Trustee, its Principal Corporate Trust Office as
defined in the Indenture, and (iii) when used with respect to the Institutional
Trustee, its Corporate Trust Office as defined in the Declaration.
"Covered Person" means any Holder or beneficial owner of
--------------
Preferred Securities.
"Debentures" means the series of junior subordinated debt
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securities of the Guarantor designated the Floating Rate Junior Subordinated
Deferrable Interest Debentures due August 15, 2030, held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
----------------
its payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
------------------
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution"). If an event of default under the
Indenture has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
------
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee,
------------------
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of January 1, 1997,
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among the Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Institutional Trustee of the Issuer.
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"Majority in liquidation amount of the Securities" means,
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except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee (other than pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall include:
(7) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition relating
thereto;
(8) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(9) 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
(10) 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.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank,
---------------------------
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, when used with respect to the
-------------------
Preferred Guarantee Trustee, any officer assigned to the Corporate Trust Office
of the Preferred Guarantee Trustee, including any managing director, vice
president, assistant vice president, senior trust officer, trust officer,
assistant treasurer, assistant secretary or any other officer of the Preferred
Guarantee Trustee, customarily performing functions similar to those performed
by any of the above designated officers, and also, with respect to a particular
corporate trust matter, any other officer, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
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"Successor Preferred Guarantee Trustee" means a successor
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Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
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as amended.
"Trust Securities" means the Common Securities and the
----------------
Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(1) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(2) if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(1) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders"), (i) within 14 days after each record date for payment of
Distributions (as defined in the Declaration) as of such record date, and
(ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee Trustee by the
Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(2) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
------------------------------------------
Within 60 days after November 15 of each year commencing in
2000, the Preferred Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313(a) of the Trust Indenture Act, if any, in the
form and in the manner provided by Section 313 of the Trust Indenture Act. The
Preferred Guarantee Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314(a)(4) of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314(a)(4) of
the Trust Indenture Act, provided that such compliance certificate shall be
delivered on or before 120 days after the end of each fiscal year of the
Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
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The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Preferred Securities Guarantee 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.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, 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
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(1) The Preferred 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 actually
known to a Responsible Officer of the Preferred Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided,
that, the Preferred Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Preferred Securities.
(2) The Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice thereof from the Guarantor or a
Holder, or a Responsible Officer of the Preferred Guarantee Trustee charged
with the administration of the Declaration shall have obtained actual
knowledge thereof.
<PAGE>
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described
in this Preferred Securities Guarantee 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
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(1) This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders, and the
Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(c) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment
to act as Successor Preferred Guarantee Trustee. The right, title and
interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred 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
Preferred Guarantee Trustee.
(2) If an Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders.
(3) The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties
as are specifically set forth in this Preferred Securities Guarantee, and
no implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Preferred Securities 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.
<PAGE>
(4) No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from
liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(1) 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:
(1) the duties and obligations of the
Preferred Guarantee Trustee shall be determined
solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations
shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee;
and
(2) in the absence of bad faith on the
part of the Preferred Guarantee Trustee, the
Preferred 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 Preferred Guarantee
Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they
conform to the requirements of this Preferred
Securities Guarantee;
(2) the Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a
Responsible Officer of the Preferred Guarantee Trustee,
unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(3) the Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction
of the Holders of not less than a Majority in liquidation
amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising
any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee; and
(4) no provision of this Preferred Securities
Guarantee shall require the Preferred 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
Preferred Guarantee Trustee shall
<PAGE>
have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms
of this Preferred Securities Guarantee or indemnity, reasonably
satisfactory to the Preferred Guarantee Trustee, against such risk
or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
---------------------------------------------
(1) Subject to the provisions of Section 3.1:
(1) The Preferred 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.
(2) Any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate.
(3) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred 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 Officers' Certificate which, upon receipt
of such request, shall be promptly delivered by the Guarantor.
(4) The Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration thereof).
(5) The Preferred 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 Preferred Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent
jurisdiction.
(6) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities
<PAGE>
Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Preferred
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 Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested
in it by this Preferred Securities Guarantee.
(7) The Preferred 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 Preferred Guarantee Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit.
(8) The Preferred 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 Preferred 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.
(9) Any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders, and the
signature of the Preferred 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
Preferred Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(10) Whenever in the administration of this
Preferred Securities Guarantee the Preferred Guarantee Trustee
shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder,
the Preferred Guarantee Trustee (i) may request instructions from
the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
<PAGE>
(11) The Preferred 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 Preferred Securities
Guarantee.
(2) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
----------------------------------------------------------------
Guarantee
---------
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
----------------------------------------
(1) There shall at all times be a Preferred Guarantee Trustee which
shall:
(1) not be an Affiliate of the Guarantor; and
(2) be a corporation 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 a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least fifty 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 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 4.1(a)(ii), 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.
<PAGE>
(2) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(3) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act, subject to the penultimate paragraph thereof. To the extent
permitted by the Trust Indenture Act, the Preferred Guarantee Trustee shall
not be deemed to have a conflicting interest with respect to the Preferred
Securities Guarantee by virtue of being trustee under the Indentures
originally dated as of November 15, 1996 and January 1, 1997, between the
Company and the Preferred Guarantee Trustee or by virtue of being (i) a
trustee on the Series A Declaration, the Series B Declaration, the 1997
Declaration or the 1999 Declaration (each as defined in the Declaration),
(ii) a trustee on the Series A Guarantee, the Series B Guarantee, the 1997
Guarantee or the 1999 Guarantee (each as defined in the Declaration), or
(iii) a trustee on the Declaration.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
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Trustee
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(1) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(2) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
(3) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(4) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the
Preferred Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Preferred
Guarantee Trustee.
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(5) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(6) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all amounts
due to the Preferred Guarantee Trustee accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
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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, right of set-
off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
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The Guarantor hereby waives notice of acceptance of this Preferred
Securities 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 5.3 Obligations Not Affected
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The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(1) 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 Preferred Securities
to be performed or observed by the Issuer;
(2) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities
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(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum 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);
(3) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(4) 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;
(5) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(6) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(7) 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 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 consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
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(1) The Issuer expressly acknowledges that (i) this Preferred
Securities Guarantee will be deposited with the Preferred Guarantee Trustee
to be held for the benefit of the Holders and (ii) the Preferred Guarantee
Trustee has the right to enforce this Preferred Securities Guarantee on
behalf of the Holders.
(2) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee; provided, however, that,
subject to Section 3.1, the Preferred Guarantee Trustee shall have the
right to decline to follow any such direction if the Preferred Guarantee
Trustee shall determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction or if the
Preferred Guarantee Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if the
Preferred
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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 Preferred Guarantee Trustee in personal
liability.
(3) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder may institute a legal proceeding directly
against the Guarantor to enforce the Preferred Guarantee Trustee's rights
under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other person or entity. The Guarantor waives any right or remedy to
require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
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This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
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The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory 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 Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities 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 5.7 Independent Obligations
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The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS, SUBORDINATION
SECTION 6.1 Limitation of Transactions
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So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default, then the Guarantor shall not and it shall not
permit any subsidiary to, (a) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
shares of the Guarantor's capital stock, or (b) 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 or make any guarantee payments with respect to any
guarantee by the Guarantor of debt securities of any subsidiary of the Guarantor
if such guarantee ranks pari passu with or junior in interest to the Debentures
(other than (a) dividends or distributions in common stock of the Guarantor, (b)
any declaration of a dividend in connection with the implementation of a Rights
Plan (as defined in the Indenture), or the issuance of stock under any such
Rights Plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under this Preferred Securities Guarantee, (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Guarantor's benefit plans for its directors, officers or
employees and (e) obligations under any dividend reinvestment and stock purchase
plan).
SECTION 6.2 Subordination.
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The obligations of the Guarantor under this Preferred Securities
Guarantee will constitute unsecured obligations of the Guarantor and will rank
subordinate and junior in right of payments to the Senior Indebtedness and
General Obligations (each as defined in the Indenture) to the extent and in the
manner set forth in the Indenture. The obligations of the Guarantor under this
Preferred Securities Guarantee do not constitute Senior Indebtedness or General
Obligations.
SECTION 6.3 Pari Passu Guarantees
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The obligations of the Guarantor under this Preferred Securities
Guarantee shall rank pari passu with the obligations of the Guarantor under (i)
any similar Bank One Guarantee (as defined in the Indenture) issued by the
Guarantor on behalf of the holders of preferred or capital securities issued by
any Bank One Capital Trust (as defined in the Indenture) and (ii) the Series A
Guarantee, the Series B Guarantee, the 1997 Guarantee and the 1999 Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
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This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
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(1) 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 performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities 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 Preferred Securities 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.
(2) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence, 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 might properly be
paid.
SECTION 8.2 Indemnification
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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 bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee or the earlier resignation or removal of the
Preferred Guarantee Trustee.
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SECTION 8.3 Compensation and Reimbursement
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The Guarantor agrees:
(1) to pay to the Preferred Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder in such
amounts as the Guarantor and the Preferred Guarantee Trustee shall agree 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
(2) to reimburse the Preferred Guarantee Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Preferred Guarantee Trustee in accordance with any provision of this Preferred
Securities Guarantee (including the reasonable compensation and the expenses and
disbursements or its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith.
The obligations of the Guarantor under this Section 8.3 shall survive
the termination of this Preferred Securities Guarantee or the earlier
resignation or removal of the Preferred Guarantee Trustee.
To secure the Guarantor's payment obligations in this Section and in
Section 8.2, the Guarantor and the Holders agree that the Preferred Guarantee
Trustee shall have a lien prior to the Preferred Securities on all money or
property held or collection by the Guarantee Trustee. Such lien shall survive
the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
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All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
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Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of the
Declaration with respect to consents to amendments thereof (whether at a meeting
or otherwise) of Holders of the Securities shall apply to the giving of such
approval.
SECTION 9.3 Notices
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All notices provided for in this Preferred Securities 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:
(1) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address
as the Preferred Guarantee Trustee may give notice of to the Holders and
the Guarantor):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Capital Markets Fiduciary Services
Telecopy: (212) 946-8159/8160
(2) 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 and the Preferred Guarantee Trustee):
BANK ONE CORPORATION
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Treasurer
Telecopy: (312) 732-3366
(3) If given to any Holder, 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.
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SECTION 9.4 Benefit
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This Preferred Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5 Governing Law
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THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
BANK ONE CORPORATION,
as Guarantor
By:__________________________________
Name: Charles W. Scharf
Title: Executive Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK,
as Preferred Guarantee Trustee
By:__________________________________
Name:
Title:
